Cogent Communications Holdings Inc (CCOI) 2023 Q1 法說會逐字稿

Good morning, and welcome to the Cogent Communications Holdings First Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded, and it will be available for replay at www.cogentco.com. A transcript of this conference call will be posted at Cogent's website when it becomes available. Cogent's summary of financial and operational results attached to its press release can be downloaded from the Cogent website.

早上好，歡迎來到 Cogent Communications Holdings 2023 年第一季度收益電話會議。 （操作員說明）提醒一下，此電話會議正在錄製中，可在 www.cogentco.com 上重播。此電話會議的文字記錄將在可用時發佈在 Cogent 的網站上。可從 Cogent 網站下載其新聞稿所附的 Cogent 財務和運營結果摘要。

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

我現在想把電話轉給 Cogent Communications Holdings 董事長兼首席執行官 Dave Schaeffer 先生。

Hey, good morning, and thank you, and welcome to all on our first quarter 2023 earnings conference call. I'm Dave Schaeffer, Cogent's CEO. With me on this morning's call is Thad 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 quarterly metrics that we present on a consistent basis each quarter.

嘿，早上好，謝謝大家，歡迎大家參加我們 2023 年第一季度的收益電話會議。我是 Cogent 的首席執行官 Dave Schaeffer。和我一起參加今天上午電話會議的是我們的首席財務官 Thad Weed。希望您有機會閱讀我們的收益新聞稿。我們的新聞稿包括許多歷史季度指標，我們每個季度都會在一致的基礎上提供這些指標。

Now for an overview of our results. Our revenue for the quarter increased sequentially by 1.1% to $153.6 million and increased 3% year-over-year. On a constant currency basis, our revenue for the quarter year-over-year grew by 4%. Our corporate business continues to be influenced by real estate activity in the central business districts of major cities. 2 key statistics, including the level of security badge entries into a building and leasing activities indicate that year-to-date, the real estate market and leasing activity in these central business districts has continued to see improvement, but has not yet returned to pre-pandemic levels.

現在概述一下我們的結果。我們本季度的收入環比增長 1.1% 至 1.536 億美元，同比增長 3%。按固定匯率計算，我們本季度的收入同比增長 4%。我們的公司業務繼續受到主要城市中央商務區房地產活動的影響。 2 關鍵統計數據，包括安全徽章進入建築物的水平和租賃活動表明，今年迄今為止，這些中央商務區的房地產市場和租賃活動持續改善，但尚未恢復到之前的水平-大流行水平。

We continue to remain cautious in our outlook for our corporate revenues given the uncertain economic environment and other challenges that are a result of the after effects of the pandemic. Our NetCentric business continues to benefit from continued growth in video, traffic and streaming. For the quarter, our traffic was up sequentially 3% quarter-over-quarter and increased 20% on a year-over-year basis. On a U.S. GAAP basis, our NetCentric revenues grew sequentially by 2.7% and grew by 7.8% year-over-year. However, adjusting for currency fluctuations, on a constant currency basis, our NetCentric revenues increased by 10.2% from the first quarter of 2022.

鑑於不確定的經濟環境和大流行的後遺症帶來的其他挑戰，我們對公司收入的前景繼續保持謹慎。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，我們的流量環比增長 3%，同比增長 20%。根據美國公認會計原則，我們的 NetCentric 收入環比增長 2.7%，同比增長 7.8%。然而，根據匯率波動進行調整後，在固定匯率的基礎上，我們的 NetCentric 收入比 2022 年第一季度增長了 10.2%。

Our sales force productivity increased from 3.8 orders installed per month per full-time equivalent last quarter to 4 units per month per full-time equivalent sales person. We also increased the number of sales reps in this quarter by 14 or a 2.6% sequential increase. We ended the quarter with 562 sales reps and 539 full-time equivalent sales reps. This represents a sequential increase of 7.2% of full-time equivalent sales reps from the fourth quarter of 2022 to the first quarter of 2023.

我們的銷售人員生產率從上個季度每個全職等效銷售人員每月安裝 3.8 個訂單增加到每個全職等效銷售人員每月 4 個訂單。我們還在本季度增加了 14 名銷售代表，環比增加了 2.6%。本季度結束時，我們擁有 562 名銷售代表和 539 名同等全職銷售代表。這意味著從 2022 年第四季度到 2023 年第一季度，全職等效銷售代表連續增加了 7.2%。

Now for some overviews on our recently announced closure of the acquisition of the Sprint Global Markets Group business or T-Mobile's Wireline business. We closed that transaction on May 1st, ahead of our initially planned closing. We incurred approximately $400,000 in professional fees in the first quarter and have spent a cumulative expense of about $2.6 million in professional fees associated with the closing of this transaction.

現在來了解一下我們最近宣布結束對 Sprint Global Markets Group 業務或 T-Mobile 的 Wireline 業務的收購。我們於 5 月 1 日完成了該交易，早於我們最初計劃的關閉。我們在第一季度產生了大約 400,000 美元的專業費用，並且與完成本次交易相關的專業費用累計支出約為 260 萬美元。

The Sprint Wireline revenues were approximately $570 million annually for the fiscal year 2022. The Sprint Wireline revenue run rate at closing is approximately $490 million. We expect this number to decline and exit the year at year end with a run rate of the acquired customer base of $440 million, which we then expect to remain stable. The primary reason for this reduction in revenue is the continued elimination of non-core products. We expect that number of products will be reduced from approximately 30 products that were offered when our agreement was signed down to 4 core products at year end.

Sprint Wireline 在 2022 財年的年收入約為 5.7 億美元。Sprint Wireline 收盤時的收入運行率約為 4.9 億美元。我們預計這一數字將下降並在年底退出，所收購客戶群的運行率為 4.4 億美元，然後我們預計該數字將保持穩定。收入減少的主要原因是非核心產品的持續淘汰。我們預計產品數量將從我們簽署協議時提供的大約 30 種產品減少到年底的 4 種核心產品。

Over the next 3 years, we expect to achieve significant annual savings due to the synergies of the combination of these businesses. We expect that $180 million will be saved on the North American network of Sprint, primarily through the use of our on-net footprint and the elimination of off-net services. Internationally, we will be shutting down the existing Sprint network and migrating all of that traffic on to the owned Cogent network as opposed to the leased Sprint network, resulting in about $25 million in annualized savings.

在接下來的 3 年裡，由於這些業務的合併所產生的協同效應，我們預計每年將實現可觀的節省。我們預計 Sprint 的北美網絡將節省 1.8 億美元，這主要是通過使用我們的在線足跡和消除離線服務。在國際上，我們將關閉現有的 Sprint 網絡，並將所有流量遷移到自有的 Cogent 網絡，而不是租用的 Sprint 網絡，從而每年節省約 2500 萬美元。

And then finally, we will be able to exit a significant IRU in North America that will save Cogent approximately $15 million annually in operation and maintenance expense for that network when our next anniversary that allows us to exit occurs within the next couple of years. We anticipate achieving additional synergies through SG&A savings and other cost reductions as well as positive revenue synergies.

最後，我們將能夠退出北美的一個重要 IRU，這將使 Cogent 每年為該網絡節省大約 1500 萬美元的運營和維護費用，屆時我們的下一個週年紀念日將允許我們在未來幾年內退出。我們預計通過 SG&A 節省和其他成本降低以及積極的收入協同效應實現額外的協同效應。

On the closing date, we paid $1 to the seller and we funded $61.1 million in cash for working capital as set forth in the purchase agreement. This working capital payment was primarily related to the injection of approximately $43.4 million in approximately 30 international subsidiaries to have sufficient liquidity in these facilities to continue operations as we migrate those customers, those vendors and those employees on to the Cogent international entities. Additionally, the working capital adjustment includes an estimated payment of approximately $31 million that we will receive from T-Mobile for acquired lease obligations. These will be paid in 4 equal 25% installments in months 55 through 58 post-closing.

在交割日，我們向賣方支付了 1 美元，並按照購買協議的規定提供了 6110 萬美元的現金作為營運資金。這筆營運資金支付主要與向大約 30 家國際子公司注資約 4340 萬美元有關，以便在我們將這些客戶、供應商和員工遷移到 Cogent 國際實體時，這些設施具有足夠的流動性以繼續運營。此外，營運資金調整包括我們將從 T-Mobile 收到的約 3100 萬美元的估計付款，用於收購租賃義務。這些將在交易結束後的第 55 個月至第 58 個月內分 4 次等額支付 25%。

Now for a little overview of our product expansion. In connection with the acquisition of the wireline business, we are beginning to sell optical wavelength and optical transport services. We intend to sell these services to existing customers, acquired customers from Sprint Communications and to new customers. These customers require dedicated optical connectivity without spending capital and the associated ongoing operational expense of owning and operating their own network infrastructure.

現在簡要介紹一下我們的產品擴展。在收購有線業務方面，我們開始銷售光波長和光傳輸服務。我們打算將這些服務出售給現有客戶、從 Sprint Communications 獲得的客戶以及新客戶。這些客戶需要專用的光連接，而無需花費資本和擁有和運營自己的網絡基礎設施的相關持續運營費用。

As part of our transaction with T-Mobile, we entered into a IP Transit Services Agreement on May 1, 2023. T-Mobile will be purchasing an aggregate of $700 million of transit services over the next 54 months from Cogent. This consists of equal payments over the next 12 months totaling $350 million or approximately $29 million a month. We will then receive for the subsequent 42 months an additional $350 million equally spread out monthly or approximately $9 million a month. We will recognize the associated $700 million of transit revenue services from T-Mobile on a straight line basis over 54 months or approximately $13 million a month.

作為我們與 T-Mobile 交易的一部分，我們於 2023 年 5 月 1 日簽訂了 IP 轉接服務協議。T-Mobile 將在未來 54 個月內從 Cogent 購買總計 7 億美元的轉接服務。這包括在接下來的 12 個月內等額付款，總額為 3.5 億美元或每月約 2900 萬美元。然後，我們將在隨後的 42 個月內每月平均收到額外的 3.5 億美元，即每月約 900 萬美元。我們將在 54 個月內以直線法確認來自 T-Mobile 的相關 7 億美元的運輸收入服務，或每月約 1300 萬美元。

To remind investors, this is a product that carries a 100% EBITDA margin contribution as it is completely on-net and the available capacity to deliver these services already exists in Cogent's infrastructure. In addition, we signed a series of transition-related agreements. On closing, we entered into a transition services agreement in order to receive specific services in order to maintain an orderly transition of the business. These transition services are primarily related to information technology, back office and finance support facilities and real estate vendor and supply chain management and human resources support from T-Mobile. These services will be provided under a transition services agreement.

提醒投資者，這是一款 EBITDA 利潤率為 100% 的產品，因為它完全在線，並且提供這些服務的可用能力已經存在於 Cogent 的基礎設施中。此外，我們還簽署了一系列與過渡相關的協議。交易結束時，我們簽訂了一份過渡服務協議，以獲得特定服務，以維持業務的有序過渡。這些過渡服務主要與信息技術、後台和財務支持設施以及房地產供應商和供應鏈管理以及來自 T-Mobile 的人力資源支持有關。這些服務將根據過渡服務協議提供。

In addition, we entered into a reverse transition services agreement where we will be providing necessary technology, network support, finance and back office support to support the remaining wireless components that are located in facilities that we acquired. Our initial transition services expense monthly is anticipated to be approximately $1.7 million to be paid to T-Mobile. And the costs under the reverse transition services agreement, paid for by T-Mobile to Cogent will approximately be $100,000 per month. These initial transition costs may fluctuate and are expected to diminish over time as each party migrates into its own systems, the services that were previously rendered under the transition services agreement.

此外，我們還簽訂了反向過渡服務協議，我們將提供必要的技術、網絡支持、財務和後台支持，以支持位於我們收購的設施中的其餘無線組件。我們每月向 T-Mobile 支付的初始過渡服務費用預計約為 170 萬美元。根據反向過渡服務協議，T-Mobile 向 Cogent 支付的費用約為每月 100,000 美元。這些初始過渡成本可能會波動，並且隨著每一方遷移到自己的系統（之前根據過渡服務協議提供的服務），預計會隨著時間的推移而減少。

The transition services agreement calls for these services being able to be provided for a 2-year period with the ability of either side to request a 1-year extension. Third-party costs incurred in providing these services will be passed on at cost with no additional margin. Either party can transition off of these services with 30 days with notice. In addition to the transition services, we will be selling commercial services to T-Mobile outside of the transit agreement.

過渡服務協議要求這些服務能夠提供 2 年，並且任何一方都可以請求 1 年的延期。提供這些服務所產生的第三方成本將按成本轉嫁，不收取額外利潤。任何一方都可以提前 30 天通知終止這些服務。除了過渡服務外，我們還將在過渡協議之外向 T-Mobile 出售商業服務。

Our commercial relationship with T-Mobile includes the services of colocation, space and power, connectivity at either Layer 1 or Layer 2. This commercial services agreement will result in T-Mobile paying Cogent approximately $2.7 million a month in cash for these initial services and this may also fluctuate and diminish over time. This is in addition to the $700 million IP transit services that we'll be providing to T-Mobile over the next 54 months. T-Mobile has indicated that on day 1, they will initially use a portion of these services.

我們與 T-Mobile 的商業關係包括主機託管、空間和電力、第 1 層或第 2 層的連接服務。該商業服務協議將使 T-Mobile 每月向 Cogent 支付約 270 萬美元的現金用於這些初始服務和這也可能隨著時間的推移而波動和減少。這是對我們將在未來 54 個月內向 T-Mobile 提供的價值 7 億美元的 IP 傳輸服務的補充。 T-Mobile 表示，在第一天，他們將首先使用這些服務的一部分。

In addition, we had the opportunity at Cogent to materially expand our network reach and footprint. We are adding 45 Sprint data centers to the 55 Cogent data centers that we operate. All of these facilities that we're acquiring from Sprint are fee simple owned. So the 100 Cogent data centers are in addition to the 1,490 carrier-neutral data centers that the combined company connects to. We are adding 18,905 route miles of owned in our city fiber. We are also adding 12,000 -- 1,257 route miles of owned metropolitan fiber. And finally, in conjunction with this acquisition, we are adding approximately 11,400 miles of intercity IRU fiber acquired from Sprint and 5,560 route miles of metropolitan IRU fiber also acquired from Sprint.

此外，我們在 Cogent 有機會大幅擴展我們的網絡範圍和足跡。我們正在將 45 個 Sprint 數據中心添加到我們運營的 55 個 Cogent 數據中心。我們從 Sprint 獲得的所有這些設施都是費用簡單的。因此，除了合併後的公司連接的 1,490 個運營商中立數據中心之外，還有 100 個 Cogent 數據中心。我們在我們的城市光纖中增加了 18,905 英里的路線。我們還增加了 12,000 - 1,257 英里的自有城市光纖。最後，結合此次收購，我們增加了從 Sprint 獲得的大約 11,400 英里的城際 IRU 光纖和同樣從 Sprint 獲得的 5,560 英里的城市 IRU 光纖。

Now for a comment on our dividends. During the quarter, we returned $45.3 million to our shareholders in form of regular quarterly dividend. Our Board of Directors reflected on the strong cash flow generating capacity of our business, the investment opportunities, inclusive of the Sprint acquisition and all of its requisite cash flow streams and decided to increase our quarterly dividend sequentially by $0.01, raising our sequential quarterly dividend to $0.935 from $0.925. This represents our 43rd consecutive sequential month of growing our regular dividend. Our dividend growth rate now stands annualized at 6.3%.

現在就我們的股息發表評論。本季度，我們以定期季度股息的形式向股東返還了 4530 萬美元。我們的董事會反映了我們業務強大的現金流產生能力、投資機會，包括 Sprint 收購及其所有必要的現金流，並決定將我們的季度股息連續增加 0.01 美元，將我們的連續季度股息提高到0.925 美元起為 0.935 美元。這是我們連續第 43 個月增加定期股息。我們的股息增長率現在年化為 6.3%。

Now in terms of guidance, the company does not give specific quarterly guidance. However, with the combination of the Sprint Wireline business and the Cogent business, we anticipate a long-term growth rate of approximately between 5% and 7% annually. EBITDA margins for the combined business should expand at an annualized rate of about 100 basis points a year once we have been able to achieve these initial synergies. This does not include the expectation of the $700 million in IP transit revenue from T-Mobile. Our growth is exclusive of that acquired revenue stream. Our revenue and EBITDA guidance are meant to be multi-year goals and are not intended to be specific quarterly or annual goals.

現在在指引方面，公司沒有給出具體的季度指引。然而，通過 Sprint Wireline 業務和 Cogent 業務的結合，我們預計每年的長期增長率約為 5% 至 7%。一旦我們能夠實現這些初步的協同效應，合併後業務的 EBITDA 利潤率應該會以每年約 100 個基點的年率增長。這不包括來自 T-Mobile 的 7 億美元 IP 傳輸收入的預期。我們的增長不包括獲得的收入流。我們的收入和 EBITDA 指導旨在成為多年目標，而不是特定的季度或年度目標。

Now I'd like ask Thad to read our safe harbor language, provide some further details on our operating performance for the quarter. And then following that, I'll conclude with a few statements and then we'll open the floor for questions.

現在我想請 Thad 閱讀我們的安全港語言，提供有關我們本季度運營績效的更多詳細信息。然後，我將以幾句話結束，然後我們將開始提問。

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。本次收益電話會議包括前瞻性陳述。這些前瞻性陳述基於我們目前的意圖、信念和期望。這些前瞻性陳述和本次電話會議中可能做出的所有其他非歷史事實的陳述都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，請參閱我們向美國證券交易委員會提交的文件。

Cogent undertakes no obligation to update or revise our forward-looking statements. And 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. Like many companies, we continue to be impacted by the COVID-19 pandemic. Our risks related to COVID-19 and other risks are described in more detail in our annual report on our 2022 Form 10-K and in our quarterly reports on Form 10-Q.

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 上的收益發布中相應的 GAAP 指標相一致。與許多公司一樣，我們繼續受到 COVID-19 大流行的影響。我們在 2022 年 10-K 表格年度報告和 10-Q 表格季度報告中更詳細地描述了我們與 COVID-19 相關的風險和其他風險。

Some comments on revenue. We analyze our revenues based upon network connection type, which is on-net, off-net and non-core. And we also analyze our revenue based upon customer type. We currently classify our customers into 2 types, NetCenteric customers and corporate customers. And with the Sprint acquisition, we will be adding enterprise customers to our mix.

關於收入的一些評論。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。我們目前將客戶分為兩類，NetCenteric 客戶和企業客戶。通過收購 Sprint，我們將把企業客戶加入到我們的組合中。

Our corporate customers buy bandwidth from us in large multi-tenant office buildings or in carrier-neutral data centers. These customers are typically professional services firms, financial services firms and educational institutions located in multi-tenant office buildings or connecting to our network through our carrier-neutral data center footprint. Our on-net -- NetCentric customers buy a significant amount of bandwidth from us in carrier -neutral data centers that includes streaming companies and content distribution service providers as well as access networks who serve consumer and business customers.

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。這些客戶通常是專業服務公司、金融服務公司和教育機構，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的網絡。我們的在線 -- NetCentric 客戶在運營商中立的數據中心從我們這裡購買了大量帶寬，這些數據中心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。

Our corporate customer business represented 55.8% of our revenues for the quarter. Our quarterly corporate revenue declined year-over-year slightly by 0.6% to $85.6 million from the first quarter of last year and decreased sequentially, but by only 0.2%. We had 44,570 corporate customer connections on our network at quarter end, which was a sequential decrease of 0.6% and a year-over-year decline of 1.8%. For the quarter, the sequential impact of USF on our revenues was not significant. And year-over-year, the impact was positive at about $0.5 million from the first quarter of last year.

我們的企業客戶業務佔本季度收入的 55.8%。與去年第一季度相比，我們的季度企業收入同比小幅下降 0.6% 至 8560 萬美元，環比下降，但僅下降 0.2%。截至季度末，我們的網絡上有 44,570 個企業客戶連接，環比下降 0.6%，同比下降 1.8%。對於本季度，USF 對我們收入的連續影響並不顯著。與去年同期相比，影響是積極的，從去年第一季度開始約為 50 萬美元。

Our NetCentric business, which represented 44.2% of our revenues for the quarter had another solid quarter and grew sequentially by 2.7% to $68 million and grew by 7.8% on a year-over-year basis. Volatility in foreign exchange rates primarily impacts our NetCentric revenue. And on a constant currency basis, our quarterly NetCentric revenue increased year-over-year by 10.2%. We had 52,857 NetCentric customer connections on our network at quarter end. That was a sequential increase of 2.3% and a year-over-year increase of 6.8%. Beginning with our next quarterly report, we will begin to report enterprise customer revenue as a new customer type, as I mentioned.

我們的 NetCentric 業務佔本季度收入的 44.2%，該季度又表現強勁，環比增長 2.7% 至 6800 萬美元，同比增長 7.8%。外匯匯率的波動主要影響我們的 NetCentric 收入。在固定匯率的基礎上，我們的季度 NetCentric 收入同比增長 10.2%。季度末，我們的網絡上有 52,857 個 NetCentric 客戶連接。環比增長 2.3%，同比增長 6.8%。從我們的下一個季度報告開始，正如我提到的，我們將開始將企業客戶收入報告為一種新的客戶類型。

Our on-net revenue was $116.1 million for the quarter. That was a sequential increase of 1.1% and year-over-year 3.1%. Our on-net customer connections were 83,268 at quarter end. And we serve our on-net customers in 3,190 total on-net multi-tenant office and carrier-neutral data center buildings. We continue to succeed in selling larger 100 gigabit connections and 400 gigabit connections in selected locations, and this has the impact of increasing our on-net ARPU, which again happened this quarter.

我們本季度的淨收入為 1.161 億美元。環比增長 1.1%，同比增長 3.1%。季度末，我們的在線客戶連接數為 83,268。我們在 3,190 個在線多租戶辦公室和運營商中立的數據中心大樓中為我們的在線客戶提供服務。我們繼續成功地在選定地點銷售更大的 100 Gb 連接和 400 Gb 連接，這對增加我們的在線 ARPU 產生了影響，這在本季度再次發生。

Our off-net revenue was $37.3 million for the quarter. That was a sequential increase of 1% and a year-over-year increase of 2.5%. Our off-net revenues are impacted by incorporated the cost savings we obtained from lower loop -- local loop prices into our pricing, and that is the impact of decreasing our off-net ARPU, which again happened this quarter. Our off-net customer connections were 13,785 at quarter end and we serve these off-net customers in about 8,400 off-net buildings. These off-net buildings are primarily located in North America.

本季度我們的網外收入為 3730 萬美元。環比增長 1%，同比增長 2.5%。我們的網外收入受到我們從較低環路獲得的成本節省的影響——本地環路價格納入我們的定價，這就是減少我們的網外 ARPU 的影響，這在本季度再次發生。我們的網外客戶連接在季度末為 13,785，我們在大約 8,400 座網外建築物中為這些網外客戶提供服務。這些網外建築主要位於北美。

Comments on pricing. The average price per megabit for our installed base declined sequentially by 6.7% to $0.25 and year-over-year by 20.4% consistent with long-term averages. The average price per megabit of our new customer contracts for the quarter was $0.10. That was a sequential decline of 20.9% and year-over-year 41.6%, and this was impacted by entering into some larger customer contracts during the quarter. Selling larger connections and larger contracts results in a change to our connection mix and has the effect of lowering our average price per megabit at a greater rate change than changes in our ARPU.

對定價的評論。我們安裝基礎的每兆位平均價格連續下降 6.7% 至 0.25 美元，同比下降 20.4%，與長期平均水平一致。我們本季度新客戶合同的每兆平均價格為 0.10 美元。這是連續下降 20.9%，同比下降 41.6%，這是受到本季度簽訂的一些較大客戶合同的影響。出售更大的連接和更大的合同會導致我們的連接組合發生變化，並且會以比我們的 ARPU 變化更大的速率降低我們的每兆比特平均價格。

Related to ARPU. Our on-net ARPU for the quarter increased and our off-net ARPU continued to decline, but at a modest rate. This is from lower pricing, again, we're obtaining for off-net circuit vendors and we pass that savings on to our off-net customers. Our on-net ARPU, which includes both corporate and NetCentric customers, increased sequentially by 0.6% to $467 from $464. Our off-net ARPU, which is predominantly comprised of corporate customers, declined sequentially by 0.5% from $914 to $910 per connection. Churn is very stable. Our sequential quarterly churn rates for both on-net and off-net was around 1% and that's what they were for the quarter. Both on-net and off-net were 1% for this quarter and that was the same as last quarter.

與ARPU相關。我們本季度的在線 ARPU 有所增加，而我們的離線 ARPU 繼續下降，但下降幅度不大。這是來自較低的價格，再次，我們正在為離線電路供應商獲得，我們將節省的費用轉嫁給我們的離線客戶。我們的在線 ARPU（包括企業和 NetCentric 客戶）從 464 美元連續增長 0.6% 至 467 美元。我們的網外 ARPU（主要由企業客戶組成）連續下降 0.5%，從每個連接 914 美元降至 910 美元。流失非常穩定。我們在網上和網上的連續季度流失率約為 1%，這就是本季度的情況。本季度網內和網外均為 1%，與上一季度持平。

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 services with us (technical difficulty) 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 contracts with us. During the quarter, certain customers took advantage of our volume of contract term discounts and entered into long-term contracts with us for over 2,380 customer connections. That increased their revenue commitment to Cogent by over $21.9 million.

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，致力於留住那些表示他們正在考慮終止與我們的服務（技術困難）的客戶，我們可能會向這些客戶提供價格折扣，以誘使他們改變主意他們終止向我們購買額外服務和/或延長與我們的合同期限的決定。在本季度，某些客戶利用我們的合同期限折扣數量，與我們就 2,380 多個客戶聯繫簽訂了長期合同。這使他們對 Cogent 的收入承諾增加了超過 2190 萬美元。

On EBITDA and EBITDA margin, we reconcile our EBITDA to our cash flow from operations in each of our quarterly earnings press releases. Seasonal factors that typically impact our EBITDA and our SG&A expenses 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, year end bonuses paid to our employees and the timing and level of audit and tax services and recently Sprint acquisition costs and also annual benefit plan cost increases.

在 EBITDA 和 EBITDA 利潤率方面，我們在每個季度收益新聞稿中將 EBITDA 與運營現金流量進行核對。通常影響我們的 EBITDA 和 SG&A 費用的季節性因素包括每年年初美國工資稅的重置、年度生活成本或 CPI 增長、季節性假期、支付給我們員工的年終獎金以及時間安排和審計和稅務服務水平以及最近的 Sprint 收購成本和年度福利計劃成本增加。

During the quarter, we incurred $400,000 of Sprint acquisition costs. And our EBITDA for the quarter including these costs decreased sequentially by $1.1 million and by $1.1 million year-over-year. Our EBITDA results were impacted by our materially increased sales rep headcount, annual CPI compensation increases and circuit and power costs related to our international expansion. Our quarterly EBITDA margin including the $400,000 of Sprint acquisition costs decreased sequentially by 110 basis points to 36.5% and year-over-year by 180 basis points.

本季度，我們產生了 400,000 美元的 Sprint 收購成本。包括這些成本在內的本季度 EBITDA 環比下降 110 萬美元，同比下降 110 萬美元。我們的 EBITDA 結果受到我們大幅增加的銷售代表人數、年度 CPI 補償增加以及與我們的國際擴張相關的電路和電力成本的影響。我們的季度 EBITDA 利潤率包括 400,000 美元的 Sprint 收購成本，環比下降 110 個基點至 36.5%，同比下降 180 個基點。

Our revenue earned outside of the United States is reported in U.S. dollars and was approximately 26% of our total quarterly revenues this quarter. About 17% of our revenues this quarter were based in Europe and 9% of our revenues were related to the Rest of World operations, which is Canadian, Mexican, Oceanic, South American and African operations. The average euro to USD rate so far this quarter is $1.10 and the average Canadian dollar exchange rate is $0.74. If these averages remain at the current level for the remainder of this quarter, we estimate that the FX conversion impact on sequential revenues will be positive at about $0.6 million and year-over-year would also be positive at about $0.4 million.

我們在美國境外賺取的收入以美元報告，約佔本季度季度總收入的 26%。本季度我們約 17% 的收入來自歐洲，9% 的收入與世界其他地區的業務相關，即加拿大、墨西哥、大洋洲、南美和非洲的業務。本季度到目前為止，歐元對美元的平均匯率為 1.10 美元，加元的平均匯率為 0.74 美元。如果這些平均值在本季度剩餘時間內保持在當前水平，我們估計外匯轉換對連續收入的影響將是正的，約為 60 萬美元，同比也將是正的，約為 40 萬美元。

Customer concentration, our revenue and customer base is not highly concentrated and our top 25 customers for the quarter were only about 6% of our revenues. Our quarterly CapEx for the quarter was $23.2 million. Supply chain uncertainty in purchases in anticipation of the closing of our Sprint acquisition caused us to shift our typical purchasing schedule for network equipment. These anticipatory investments were designed to ensure that we have satisfactory inventory levels of network equipment to accommodate our growth plans, including new wavelength product offerings as a result of our Sprint Wireline acquisition and the interconnection of our 2 networks together in multiple locations and to meet our customer needs.

客戶集中度、我們的收入和客戶群並不高度集中，本季度前 25 名客戶僅占我們收入的 6% 左右。我們本季度的季度資本支出為 2320 萬美元。由於預期我們將完成對 Sprint 的收購，採購中的供應鏈不確定性導致我們改變了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，包括由於收購 Sprint Wireline 以及將我們的 2 個網絡在多個地點互連而提供的新波長產品，並滿足我們的需求客戶的需求。

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 $320.4 million at quarter end. We have a very diverse set of IRU suppliers and we have IRU contracts with a total of 319 different dark fiber suppliers. Our quarter end cash and cash equivalents and restricted cash was $234.4 million. The $50.3 million of restricted cash is tied to the estimated fair value of our interest rate swap agreement.

我們的融資租賃 IRU 義務適用於長期暗光纖租賃，初始期限通常為 15 至 20 年或更長時間，並且通常包括初始期限後的多次續約選擇。截至季度末，我們的 IRU 融資租賃義務為 3.204 億美元。我們有一組非常多樣化的 IRU 供應商，我們與總共 319 家不同的暗光纖供應商簽訂了 IRU 合同。我們的季度末現金和現金等價物以及受限制的現金為 2.344 億美元。 5030 萬美元的受限現金與我們的利率掉期協議的估計公允價值掛鉤。

Our total gross debt at par, including finance lease obligations, was $1.3 billion at quarter end and net debt was $1 billion. Our total gross debt to trailing last 12 months EBITDA as adjusted for Sprint acquisition costs. That ratio was 5.47x at quarter end and our net debt ratio was 4.46x. Our consolidated leverage ratio, as calculated under our note indentures, was 5.42%, and our secured leverage ratio was 3.50%. Our fixed coverage ratio as calculated under our note indentures was 3.24%.

截至季度末，我們的總債務總額（包括融資租賃義務）為 13 億美元，淨債務為 10 億美元。根據 Sprint 收購成本調整後，我們過去 12 個月的總債務為 EBITDA。季度末該比率為 5.47 倍，我們的淨債務比率為 4.46 倍。根據我們的票據契約計算，我們的綜合槓桿率為 5.42%，我們的擔保槓桿率為 3.50%。根據我們的票據契約計算的我們的固定覆蓋率為 3.24%。

We are party to an interest rate swap agreement that modifies our fixed interest rate obligation with our $500 million of 2026 notes to a variable interest rate obligation based on the secured overnight financing rate or SOFR for the remaining term of these notes. We recorded the estimated fair value of the swap agreement in each reporting period. And we incur corresponding non-cash gains or losses due to the changes in the value of the swap from changes in market interest rates. At quarter end, the fair value of the swap agreement decreased by $1.8 million from last quarter to a liability of $50.3 million. We are required to maintain a restricted cash balance with the counterparty equal to the estimated liability.

我們簽署了一項利率互換協議，該協議將我們 5 億美元的 2026 年票據的固定利率義務修改為基於這些票據剩餘期限的擔保隔夜融資利率或 SOFR 的可變利率義務。我們在每個報告期間記錄掉期協議的估計公允價值。並且由於市場利率變化引起的掉期價值變化，我們產生了相應的非現金收益或損失。季度末，掉期協議的公允價值比上一季度減少 180 萬美元，為 5030 萬美元的負債。我們需要與交易對手方保持與估計負債相等的受限現金餘額。

Finally, some comments on bad debt and days sales outstanding. Our bad debt expense was 0.8% of our revenues for the quarter. Our days sales outstanding was 22 days, which was the same at year end and is an excellent metric. These metrics may be impacted by our Sprint acquisition going forward. And with every quarter, I want to personally thank and recognize our worldwide billing and collections team members for continuing to do a fantastic amazing job in serving our customers and collecting from them.

最後，關於壞賬和未償銷售天數的一些評論。我們的壞賬費用佔本季度收入的 0.8%。我們的銷售周轉天數為 22 天，與年底相同，這是一個很好的指標。這些指標可能會受到我們未來收購 Sprint 的影響。在每個季度，我都想親自感謝並表彰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向他們收款。

I will turn the call back over to Dave for some final remarks.

我會把電話轉回給戴夫，讓他做最後的評論。

Thanks, Thad. I'd like to now highlight some of the strengths of our network, our customer base and our sales force. First, we'll start with NetCentric. We've achieved excellent revenue growth in our NetCentric business. We continue to benefit from the increased transition of video to over-the-top and streaming, particularly in international markets. At quarter's end, we were on-net in 1,490 third-party carrier-neutral data centers and 55 Cogent-owned data centers for a grand total of 1,545 data centers, more than any other carrier is measured by third-party research.

謝謝，泰德。現在我想強調一下我們網絡、客戶群和銷售團隊的一些優勢。首先，我們將從 NetCentric 開始。我們的 NetCentric 業務實現了出色的收入增長。我們繼續受益於視頻向 Over-the-top 和流媒體的更多過渡，尤其是在國際市場。在本季度末，我們在 1,490 個第三方運營商中立數據中心和 55 個 Cogent 擁有的數據中心上線，總計 1,545 個數據中心，比第三方研究衡量的任何其他運營商都多。

The breadth of our coverage enables us to serve our NetCentric customers and allow them to optimize their networks and reduce latency. We expect we'll continue to widen our lead in this market as we project adding an additional 100 carrier-neutrals per year to our network over the next several years. In addition, we are adding 45 acquired Sprint data centers to the Cogent-owned footprint. We significantly expanded our network footprint with both acquired IRUs and owned fiber route miles.

我們覆蓋範圍的廣度使我們能夠為我們的 NetCentric 客戶提供服務，並允許他們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 100 個運營商中立的網絡。此外，我們正在將 45 個收購的 Sprint 數據中心添加到 Cogent 擁有的足跡中。我們通過收購的 IRU 和擁有的光纖路線里程顯著擴大了我們的網絡足跡。

At quarter's end, we directly connected to 7,864 networks. Again, this is more than any other carrier in the world. This represents a constellation of ISPs, telephone companies, cable companies, mobile operators and other carriers that allow Cogent direct connectivity to the vast majority of the world's broadband and mobile phone subscribers. At quarter's end, we had a sales force of 222 professionals focused solely on the NetCentric market. This is most likely the largest group of sales professionals focused exclusively on this segment in the industry. This sales force will be predominantly responsible for the sale of our wavelength products that we'll begin offering with the closing of the Sprint transaction.

在本季度末，我們直接連接到 7,864 個網絡。同樣，這比世界上任何其他航空公司都多。這代表了 ISP、電話公司、有線電視公司、移動運營商和其他運營商的星座，它們允許 Cogent 直接連接到世界上絕大多數的寬帶和移動電話用戶。在本季度末，我們擁有一支由 222 名專業人員組成的銷售隊伍，他們專注於 NetCentric 市場。這很可能是業內最大的專注於該細分市場的專業銷售人員。該銷售團隊將主要負責我們將在 Sprint 交易結束後開始提供的波長產品的銷售。

Now for a couple of comments on (inaudible). We are seeing some positive trends in our corporate business as work from home environment has become established as part of people's work week. We believe corporate customers are increasingly willing to upgrade their Internet infrastructure to support larger connectivity and facilitate remote work. Our corporate customers are aggressively integrating new applications that become part of the work world such as video conferencing. Users will require high capacity connections both inside and outside of their premises.

現在就（聽不清）發表一些評論。我們在公司業務中看到了一些積極的趨勢，因為在家工作已經成為人們每週工作的一部分。我們相信，企業客戶越來越願意升級他們的互聯網基礎設施，以支持更大的連接並促進遠程工作。我們的企業客戶正在積極集成成為工作世界一部分的新應用程序，例如視頻會議。用戶將需要其場所內外的高容量連接。

Our aggressive push to lower the cost of bandwidth and provide greater coverage has continued to increase corporate demand for our robust bidirectional symmetric 1-gig and 10-gig port offerings. Corporate customers are typically buying additional connections and carrier-neutral data centers to provide redundancy for their ad hoc virtual private networks to facilitate work from home. The continued improvement in the corporate segment, as we highlighted last quarter, will be both on even and long-term, but the underlying trends are favorable for our ability to return to long-term sustainable sequential growth in that business.

我們積極推動降低帶寬成本和提供更大的覆蓋範圍，這繼續增加了企業對我們強大的雙向對稱 1-gig 和 10-gig 端口產品的需求。企業客戶通常會購買額外的連接和運營商中立的數據中心，為他們的臨時虛擬專用網絡提供冗餘，以促進在家工作。正如我們上個季度強調的那樣，企業業務的持續改善將是長期的，但潛在趨勢有利於我們恢復該業務長期可持續連續增長的能力。

Now for some highlights on our sales force. We remain focused on the number of sales people and the productivity of those individuals. We continue to expand and improve our training programs, but we're also aggressive in managing out underperforming sales reps. On a sequential basis, our total sales headcount increased by 14 reps or 2.6%, 17.3% year-over-year to 562 reps. The number of full-time equivalent reps increased sequentially by 7.2% to 539 from 503, representing a 19.1% year-over-year increase in full-time equivalent sales reps.

現在介紹一下我們銷售團隊的一些亮點。我們仍然關註銷售人員的數量和這些人的生產力。我們繼續擴大和改進我們的培訓計劃，但我們也在積極管理表現不佳的銷售代表。按順序計算，我們的銷售總人數增加了 14 名代表或 2.6%，同比增長 17.3% 至 562 名代表。全職等效銷售代表的數量從 503 名依次增加 7.2% 至 539 名，相當於全職等效銷售代表同比增長 19.1%。

Our sales force turnover remained stable at 4.7% per month in the quarter. That is significantly below the peak of 8.7% per month during the pandemic and is better than our long-term historical average of sales force turnover of 5.7% per month. We remain optimistic about our unique position to be able to serve small and medium-sized businesses in the central business districts of major cities in the 1,841 on-net multi-tenant office buildings connected to our network with over 1 billion square feet of net rentable space.

本季度我們的銷售人員流動率穩定在每月 4.7%。這大大低於大流行期間每月 8.7% 的峰值，也好於我們銷售人員每月流動率 5.7% 的長期歷史平均水平。我們對我們的獨特地位保持樂觀，能夠在連接到我們網絡的 1,841 座在線多租戶辦公樓中為主要城市中央商務區的中小型企業提供服務，淨可出租面積超過 10 億平方英尺空間。

We're also very excited about adding a large enterprise customer base to our customer mix, and we will be reporting those enterprise customers as a separate customer type. We're also adding wavelengths or optical transport networking services to our product portfolio. We intend to report both the number of wavelengths sold and also report the total revenue of those wavelength services.

我們也很高興在我們的客戶組合中增加一個大型企業客戶群，我們將把這些企業客戶作為一個單獨的客戶類型來報告。我們還在我們的產品組合中添加波長或光傳輸網絡服務。我們打算報告銷售的波長數量以及這些波長服務的總收入。

Currently, key indicators of office activity and workplace re-entry and leasing activities are improving, but still remain below pre-pandemic levels. We are encouraged that many tenants are moving forward, making network decisions and beginning to stabilize their network architectures for the new work environment. Certain corporations have downsized offices. And their requirements may actually increase the number of potential customers we have in a building as those buildings continue to see improvement in leasing activities.

目前，辦公室活動和工作場所重新進入和租賃活動的關鍵指標正在改善，但仍低於大流行前的水平。我們感到鼓舞的是，許多租戶正在向前邁進，做出網絡決策並開始為新的工作環境穩定他們的網絡架構。某些公司縮小了辦公室規模。他們的要求實際上可能會增加我們在建築物中擁有的潛在客戶數量，因為這些建築物的租賃活動繼續有所改善。

Under our indentures, including the $250 million general basket, we have cumulative amounts available for dividends and buybacks that actually exceed the amount of cash we have on hand. We are diligently working to integrate the Sprint Wireline acquisition. We remain excited and optimistic about the accelerating cash flow generating capabilities of these assets. Over the next 3 years, we continue to expect to achieve annualized savings in the order of approximately $220 million, as I indicated earlier. We also have additional SG&A savings and enhanced revenue synergies by cross-selling our wavelength services. This will allow Cogent to both grow scale and free cash flow.

根據我們的契約，包括 2.5 億美元的一般籃子，我們可用於分紅和回購的累計金額實際上超過了我們手頭的現金數量。我們正在努力整合對 Sprint Wireline 的收購。我們仍然對這些資產加速產生現金流的能力感到興奮和樂觀。正如我之前指出的那樣，在接下來的 3 年裡，我們繼續期望實現大約 2.2 億美元的年化節省。通過交叉銷售我們的波長服務，我們還節省了額外的 SG&A，並增強了收入協同效應。這將使 Cogent 能夠擴大規模和自由現金流。

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

有了這個，我現在想開始提問。

(Operator Instructions) Our first question comes from the line of David Barden from Bank of America.

（操作員說明）我們的第一個問題來自美國銀行的 David Barden。

Congrats on closing the deal on Monday, Dave. I guess if I could ask 3 questions on the Sprint transaction. First, Dave, thanks for that color around the reporting. I guess just to be more clear, that you're going to be adding a revenue line to the reporting structure and then adding these 2 incremental customer count numbers. Any other disclosures that you plan on sharing on a go-forward basis would be helpful on that basis.

恭喜你周一完成交易，戴夫。我想我是否可以就 Sprint 交易提出 3 個問題。首先，戴夫，感謝圍繞報告的色彩。我想更清楚的是，您將向報告結構添加一條收入線，然後添加這 2 個增量客戶計數。您計劃在此基礎上共享的任何其他披露將在此基礎上有所幫助。

The second would be, should we be expecting any kind of CapEx requirements to either integrate or perfect the Sprint asset to accomplish some of what you hope to achieve on both the revenue and the savings targets? And then the last one, if I could, is you have a spectrum of pricing strategies that you've come to market with that have been successful over the years, super aggressive in data centers, moderately aggressive in bandwidth connectivity for buildings. How do you think about approaching these new opportunities in dark fiber wavelengths and lit services from a pricing and profitability strategy standpoint?

第二個是，我們是否應該期望任何類型的資本支出要求來整合或完善 Sprint 資產，以實現您希望在收入和節省目標上實現的一些目標？然後最後一個，如果可以的話，你有一系列的定價策略，這些策略多年來一直很成功，在數據中心超級激進，在建築物的帶寬連接方面適度激進。從定價和盈利策略的角度來看，您如何看待暗光纖波長和光服務中的這些新機遇？

Thanks for the 3 questions, Dave, and I'll try to take these in order. Our goal is to continue to be very transparent and consistent in the way we report revenues. We will have a third class of customers. We historically have sold to SMBs, which we classify as corporate and to service providers, whether they be content or -- content or access, which have been classified as NetCentric. With the acquisition of the Sprint GMG business, we are picking up a significant number of large enterprise customers. I think it will be very helpful for investors to see that customer type called out separately, both by unit number of connections and revenue.

感謝 Dave 提出的 3 個問題，我會盡量按順序回答這些問題。我們的目標是繼續以非常透明和一致的方式報告收入。我們將有第三類客戶。我們歷來向 SMB 銷售，我們將其歸類為公司和服務提供商，無論是內容還是 - 內容或訪問，都被歸類為 NetCentric。通過收購 Sprint GMG 業務，我們獲得了大量的大型企業客戶。我認為這對投資者來說是非常有幫助的，因為他們可以根據連接的單位數量和收入來單獨調用客戶類型。

We also will be reporting on products as we do today. We report our Internet access revenues, which are about 81% of Cogent's revenues, our VPN services, which are primarily VPLS with a small amount of SD-WAN at about 16% of revenues. And then our colocation revenues as space and power and about 3% of revenues. To those 3 products, we will be adding a fourth product that will be the optical transport networking or wave line services. We intend to report the number of wavelengths in service each quarter, and we intend to report the dollar revenue associated with those wavelengths. I think this will allow investors to track accurately our progress in achieving our revenue objectives.

我們也將像今天一樣報告產品。我們報告我們的互聯網接入收入約佔 Cogent 收入的 81%，我們的 VPN 服務主要是 VPLS 和少量 SD-WAN，約佔收入的 16%。然後我們的託管收入為空間和電力，約佔收入的 3%。對於這 3 種產品，我們將添加第四種產品，即光傳輸網絡或波線服務。我們打算每個季度報告服務中的波長數量，我們打算報告與這些波長相關的美元收入。我認為這將使投資者能夠準確地跟踪我們在實現收入目標方面的進展。

We also anticipate an increase in our noncore reporting line due to the fact that while we are actively trying to end of life, many of these noncore gross margin negative products, the transaction did close sooner than anticipated. We do have more of that revenue than we expected, and we are burning it off. And as we said, we anticipate the revenues to go from a run rate of about [$490 million at closing to a run rate of $440 million] and then be stable. There will be some small stub of noncore products, and we will again report that as a separate line item that is both nongrowing and nonstrategic.

我們還預計我們的非核心報告線會增加，因為雖然我們正在積極嘗試結束生命，但許多這些非核心毛利率為負的產品，交易確實比預期更早完成。我們的收入確實比我們預期的要多，我們正在把它燒掉。正如我們所說，我們預計收入將從大約[收盤時的 4.9 億美元的運行率增加到 4.4 億美元的運行率]，然後保持穩定。將有一些非核心產品的小存根，我們將再次將其報告為既非增長又非戰略性的單獨項目。

Now I'm going to pivot to your CapEx question. And I'm going to answer it in 2 windows. One, we have said and expect this to continue that we are spending about $50 million in CapEx to integrate the 2 networks. We have already spent the majority of that CapEx, but there is still some that is being spent. What is that money for? It's to connect the Sprint network in 100 U.S. markets to the Cogent network. And that usually requires physical fiber. We're both buying IRU fiber where available and physically trenching and building fiber where necessary. We are more than 50% of the way through that process, but those are onetime expenses. We do not anticipate any other onetime expenses.

現在我要轉向你的資本支出問題。我將在 2 個窗口中回答。第一，我們已經說過並希望這種情況繼續下去，我們將花費大約 5000 萬美元的資本支出來整合這兩個網絡。我們已經花費了大部分資本支出，但仍有一些正在花費。那錢是乾什麼用的？它將 100 個美國市場的 Sprint 網絡連接到 Cogent 網絡。而這通常需要物理光纖。我們既在可用的地方購買 IRU 光纖，也在必要的地方物理挖溝和建造光纖。我們已經完成了該過程的 50% 以上，但這些都是一次性費用。我們預計不會有任何其他一次性費用。

Now to kind of understand the ongoing CapEx of the combined business. There are really 3 components: roughly $35 million annually in maintenance CapEx, which includes capacity augmentation, but not footprint expansion in the Cogent network, about $30 million annually for CapEx to support the acquired Sprint network or therefore, about $65 million in maintenance. In addition to that, we expect to continue to spend approximately $30 million a year in footprint expansion, adding either new international markets or new data centers and a few new multi-tenant buildings in markets that we are already in. And we anticipate that being kind of our steady state number going forward.

現在來了解合併後業務的持續資本支出。實際上有 3 個組成部分：每年大約 3500 萬美元的維護資本支出，其中包括容量增加，但不包括 Cogent 網絡的足跡擴展，每年約 3000 萬美元的資本支出用於支持收購的 Sprint 網絡，因此，約 6500 萬美元的維護。除此之外，我們預計每年將繼續花費大約 3000 萬美元用於擴大足跡，增加新的國際市場或新的數據中心，以及我們已經進入的市場中的一些新的多租戶建築。我們預計一種我們未來的穩態數字。

Now to your go-to-market strategy question. It is true that in the customer base that we'll be selling wavelengths to Cogent has reputation of being exceedingly aggressive on pricing. We will be aggressive, but we do not believe that we have the same need to be as aggressive as we were in gaining market share in transit. Cogent entered a crowded market 20 years ago. We've become the #2 provider in the world, probably exit this year as the #1 provider with about 25% market share in transit due to our aggressive pricing. In the wavelength market, we are, today, less than 1/2 of 1% of that market based on the test bed that T-Mobile had funded for Sprint.

現在回答您的上市策略問題。的確，在我們將向 Cogent 銷售波長的客戶群中，我們享有定價極其激進的聲譽。我們將積極進取，但我們不認為我們需要像以前那樣積極進取以贏得運輸市場份額。 20 年前，Cogent 進入了一個擁擠的市場。我們已經成為世界上排名第二的供應商，由於我們積極的定價，今年可能會以大約 25% 的運輸市場份額退出排名第一的供應商。在波長市場，根據 T-Mobile 為 Sprint 資助的測試台，我們今天不到該市場 1% 的 1/2。

However, going forward, we will have some significant market advantages. 1) we will have unique routes and over 90% of the instances; 2) we will have more endpoints available to buy wave line services than any other carrier; 3) because of the homogeneous nature of our network, we can provide accurate routing maps within 1 meter of accuracy for diversity planning purposes that has great value to customers; 4) and maybe most importantly of all, Cogent today provisions on net services at an average of 9 days, we guarantee to do that in 17 days. The market for wavelengths expects provisioning to be somewhere between 90 and 200 days. We will go to market initially with a 90-day service level agreement for installs, but we expect over a 2-year period as we fully interconnect the networks to be able to get down to a level of approximately 9 days with a 17-day guarantee. And then finally, because we have a negative basis in the network, we will be aggressive, but we'll use pricing only as needed. Hopefully, that was helpful in answering your question.

然而，展望未來，我們將擁有一些重要的市場優勢。 1) 我們將擁有獨特的路線和超過 90% 的實例； 2) 與任何其他運營商相比，我們將有更多的端點可用於購買 wave line 服務； 3）由於我們網絡的同質性，我們可以提供精度在1米以內的精確路由圖，用於多樣性規劃目的，這對客戶具有很大的價值； 4) 也許最重要的是，今天 Cogent 平均需要 9 天提供網絡服務，我們保證在 17 天內完成。波長市場預計供應時間在 90 到 200 天之間。我們最初將以 90 天的安裝服務水平協議進入市場，但我們預計在 2 年的時間裡，隨著我們完全互連網絡，能夠將 17 天的服務水平降至大約 9 天的水平保證。最後，因為我們在網絡中有負面基礎，所以我們會積極進取，但我們只會在需要時使用定價。希望這有助於回答您的問題。

Let me go back just to the revenue classification. So when we look at what the face of the income statement is going to look like in the 10-Q for the second quarter, we'll continue to have on-net, off-net and noncore, and that will include the Cogent, I'll call it Cogent Classic operation, and the Sprint acquired business will be included into those categories, along with some existing wave business, which will have a separate line that was acquired from Sprint and then new wave sales. So we'll have on-net, off-net, noncore wave revenue will also because of its materiality, need to separately one line the revenue from the IP transit agreement, the $700 million recognized straight line over the term as a one line. And we'll also disclose the revenue from the commercial arrangement with Sprint that starts at the initial rate that we mentioned in the script. So that's what the face of the income statement will look like. Underneath that, in the metrics, we will disclose the customer categories, which will include enterprise customers, the new classification for this quarter. I hope that helps.

讓我回到收入分類。因此，當我們查看第二季度 10-Q 損益表的面貌時，我們將繼續擁有在線、離線和非核心，其中將包括 Cogent，我將其稱為 Cogent Classic 運營，Sprint 收購的業務將與一些現有的 Wave 業務一起包含在這些類別中，這些業務將有一條從 Sprint 收購的單獨生產線，然後是新的 Wave 銷售。因此，我們將擁有在線、離線、非核心波收入，因為其重要性，需要將來自 IP 傳輸協議的收入單獨列為一條線，將 7 億美元的確認直線作為一條線。我們還將披露與 Sprint 的商業安排的收入，該收入以我們在腳本中提到的初始費率開始。這就是損益表的外觀。在此之下，在指標中，我們將披露客戶類別，其中包括企業客戶，這是本季度的新分類。我希望這有幫助。

Our next question comes from the line of Walter Piecyk from LightShed Walter.

我們的下一個問題來自 LightShed Walter 的 Walter Piecyk。

I'm trying to -- so when you -- on the KPI type stuff, you have like sales force and then full-time equivalent reps. I'm not sure which one is more correlated corporate, but they both seem to be up like 15% over the past 3 quarters. I'm just curious if that should be indicative of maybe returning to growth in corporate in the upcoming quarters? I mean, do you see -- I understand that the productivity initially is low, but as these new people ramp up and your churn is lower, I guess, on employees. Is that going to lead to some growth in corporate in the next couple of quarters? And then I think kind of tied to that because I know that you'd like to give very full answers.

我正在嘗試 - 所以當你 - 在 KPI 類型的東西上，你有像銷售人員和全職等效代表。我不確定哪一個是更相關的公司，但它們在過去 3 個季度中似乎都上漲了 15%。我只是好奇這是否應該表明企業在接下來的幾個季度可能會恢復增長？我的意思是，你看到了嗎——我知道最初的生產力很低，但隨著這些新人的增加，你的流失率會降低，我想，對員工來說。這會導致未來幾個季度的企業增長嗎？然後我覺得有點與此相關，因為我知道你想給出非常完整的答案。

In your prepared remarks, you were referencing corporate in terms of like customers adding more capacity for employees outside of the office totally get that. But what about the kind of narrative that you were giving, I don't know, about a year ago of this concept of like if the law firm goes from 3 floors to 1 floor, they can lease out 2 more floors and now we're seeing that corporate vacancies are not, in fact, recovering and no one is taking those 2 additional floors. So in terms of growth driven by actually signing up new corporate customers? Or are we all just leaning heavily on hoping that everyone is getting fatter and fatter pipes?

在您準備好的發言中，您指的是公司，就像客戶為辦公室外的員工增加更多容量完全明白這一點。但是你給出的那種敘述呢，我不知道，大約一年前這個概念就像如果律師事務所從 3 層樓增加到 1 層樓，他們可以再出租 2 層樓，現在我們'我發現公司職位空缺實際上並沒有恢復，而且沒有人佔用這 2 個額外的樓層。那麼，就實際簽約新企業客戶所推動的增長而言？或者我們都只是嚴重依賴於希望每個人都變得越來越胖？

Yes. So let's start with some clarifications and definitions on the sales force. We disclosed the total number of salespeople. We also disclosed a full-time equivalent, which is someone who's undergone 3 months of training. For those first 3 months, they don't have a quota responsibilities. Therefore, they're not (technical difficulty) a full-time equivalent, meaning they're carrying a quota. We've also disclosed that average rep productivity typically linearly improves from the end of that FT transition from trainee to full time equivalent to about month 30 where they mature.

是的。因此，讓我們從對銷售人員的一些澄清和定義開始。我們披露了銷售人員的總數。我們還披露了一個全職等效人員，即接受過 3 個月培訓的人員。對於前 3 個月，他們沒有配額責任。因此，他們不是（技術難度）全職等價物，這意味著他們有配額。我們還透露，平均代表生產力通常會從 FT 從實習生到全職的過渡結束時線性提高，相當於他們成熟的大約 30 個月。

We also are growing the total sales force, but are still below our pre-pandemic sales headcount numbers. We peaked at slightly over 600. We're at about 560 today. Now we troughed during the pandemic at about 470. The primary reason for that trough was the elevated level of turnover due to the lack of performance. Now we attribute that both to market conditions but also the inability to train reps as effectively and manage them most effectively remotely. So Cogent return to the office and remains a 5-day in the office company.

我們也在擴大總銷售隊伍，但仍低於大流行前的銷售人數。我們的峰值略高於 600。今天大約是 560。現在，我們在大流行期間的谷底約為 470。該谷底的主要原因是由於缺乏表現而導致的營業額水平升高。現在我們將這歸因於市場條件，以及無法有效地培訓銷售代表和最有效地遠程管理他們。因此 Cogent 返回辦公室並在辦公室公司待了 5 天。

In terms of the split, we actually disclosed the number of reps that focus on NetCentric, the number of reps that focus on corporate. We will also begin to disclose the number of reps that focus exclusively on large enterprise. So we'll have 3 categories, and you could track their growth or decline in each category, each quarter. The productivity metric is one that is spread across all groups. So it's a little, I think, too much data and not really additive to break down productivity by rep type, they're relatively equivalent. And the goal here is to give useful KPIs and not KPIs that obfuscate key trends.

在拆分方面，我們實際上披露了專注於 NetCentric 的代表數量，專注於企業的代表數量。我們還將開始披露專門針對大型企業的代表數量。所以我們將有 3 個類別，您可以跟踪每個季度每個類別的增長或下降。生產力指標是一種分佈在所有組中的指標。因此，我認為這有點太多數據，並沒有真正添加到按代表類型分解生產力，它們是相對等效的。這裡的目標是提供有用的 KPI，而不是混淆關鍵趨勢的 KPI。

Now to your underlying question about corporate growth rates. We did have a couple of quarters of positive growth sequentially. This quarter dipped to negative [0.2%]. We've been very clear that a year or 18 months ago, we expected a more rapid return office and recovery in corporate. And a couple of quarters ago on the earnings call, I was very specific in saying that this is taking longer, it's going to be less even and slower than we anticipated. We are seeing improvements. We are seeing corporate ARPUs go up. We are seeing revenues effectively flat now as opposed to declining, not the 11% year-over-year growth we were accustomed to, but I do believe we'll get back to it.

現在回答有關公司增長率的基本問題。我們確實連續幾個季度實現了正增長。本季度跌至負 [0.2%]。我們已經非常清楚，一年或 18 個月前，我們預計會有更快的回報辦公室和企業復甦。幾個季度前，在財報電話會議上，我非常具體地說，這需要更長的時間，它會比我們預期的更慢、更慢。我們正在看到改進。我們看到企業 ARPU 上升。我們現在看到收入實際上持平而不是下降，而不是我們習慣的 11% 的同比增長，但我相信我們會回到它。

Now I'm going to go back to your leasing comment. While it is true that the average lease size is declining, vacancy rates in all major U.S. markets have peaked and are declining. But again, the rate of decline is very modest. If you looked across the actual buildings that Cogent is in pre-pandemic, they had about 6% vacancy. That peaked at about 18% vacancy. It's down to about 17.2% today. So it's not materially better, but it is better and it's not getting worse. So we are seeing some improvement in occupancy, which then increases tenant count. We've also seen this migration of customers taking additional ports in data centers for backup and a larger port size. All of these have probably buffered some of the decline in pure units.

現在我要回到你的租賃評論。雖然平均租賃規模確實在下降，但美國所有主要市場的空置率都已見頂並正在下降。但同樣，下降速度非常適中。如果你查看 Cogent 在大流行前的實際建築物，它們的空置率約為 6%。這在大約 18% 的空缺率時達到頂峰。今天下降到大約 17.2%。所以它並沒有在物質上更好，但它更好而且沒有變得更糟。因此，我們看到入住率有所改善，從而增加了租戶數量。我們還看到這種客戶遷移在數據中心中使用額外的端口進行備份和更大的端口大小。所有這些都可能在一定程度上緩衝了純單位的下降。

So if you look at the revenue decline from pre-pandemic corporate to now, it's much more modest than the decline in units, which is about 10%. It is getting better. But again, I want to be as transparent as I can. We don't have perfect visibility, but it does appear that the corporate business is improving, but at a slow and uneven pace.

因此，如果你看一下從大流行前到現在的企業收入下降，它比單位的下降要溫和得多，後者約為 10%。它越來越好。但同樣，我想盡可能透明。我們沒有完美的可見性，但公司業務似乎確實在改善，但速度緩慢且不均衡。

Doesn't it concern you that a lot of these economists are talking about how recession will specifically hit that market, so that if it went from [6 to 18, maybe down to 17, maybe down to 16], but by the end of the year, it's going to get worse rather than better.

很多經濟學家都在談論經濟衰退將如何具體打擊那個市場，所以如果它從 [6 到 18，可能下降到 17，可能下降到 16]，但到年底今年，它會變得更糟而不是更好。

So again, we have been in operation through at least 4 other recessions, including the Great Recession, which was probably a more profound shock to the system. And our tenant base tends to be more recession-proof because they tend to preselect the most desirable buildings with the highest credit screenings and are generally not the businesses that go out of business in a recession. I do believe that the underlying owners of these real estate assets are in significant trouble. I as a real estate owner, myself, can tell you the pressures are material.

因此，我們再次經歷了至少 4 次其他衰退，包括大衰退，這可能對系統造成了更深遠的衝擊。而且我們的租戶群體往往更能抵禦經濟衰退，因為他們傾向於預先選擇信用審查最高的最理想的建築物，而且通常不是在經濟衰退中倒閉的企業。我確實相信這些房地產資產的潛在所有者遇到了很大的麻煩。作為一名房地產所有者，我本人可以告訴你壓力是巨大的。

Most of the lending, the office market comes from regional banks who are under tremendous pressure. And while rent rolls are down, the banks need liquidity and are basically not willing to refinance assets as they mature. That's what's putting more pressure on the real estate market than necessarily the increase of vacancy rates. And while I do think monetary policy is going to continue to slow the economy and most likely cause a recession. I don't think that's going to materially impact the tenants that we sell to.

寫字樓市場的大部分貸款來自承受巨大壓力的區域性銀行。雖然租金下降，但銀行需要流動性，並且基本上不願意在資產到期時再融資。這就是給房地產市場帶來比空置率上升更大壓力的原因。雖然我確實認為貨幣政策將繼續減緩經濟增長並很可能導致經濟衰退。我認為這不會對我們出售給的租戶產生重大影響。

Okay. And just -- that's a good segue to my final question, which is, can you just remind us on the capital leases, what you're paying, what rate you're paying there? And is there anything in terms of maxing that out? Because obviously, when you're -- if your dividend is consuming more than the free cash flow it's the gross debt increase is showing up in capital leases. Is there a max on that? And is it -- what's the rate you're paying? I mean we had to call with SBA earlier. They had a loan that they're obviously paying down rather than buying stock back. Is that part of the consideration for that part of your debt instrument.

好的。只是 - 這是我最後一個問題的一個很好的轉折點，那就是，你能不能提醒我們關於資本租賃，你支付的是什麼，你在那裡支付的利率是多少？有什麼可以最大化的嗎？因為很明顯，當你 - 如果你的股息消耗超過自由現金流量，那麼資本租賃中就會出現總債務增加。有上限嗎？它是——你支付的利率是多少？我的意思是我們不得不早些時候打電話給 SBA。他們有一筆貸款，他們顯然是在償還而不是回購股票。那是你債務工具的那部分對價的一部分。

Yes. So first of all, in both of our indentures, we have no limitation on our ability to enter into capital leases. In many cases, these leases are prepaid, meaning we pay an upfront fee and don't pay anything else other than a maintenance fee over time. The underlying interest rate that's imputed depends on the rates when the lease was signed. I'll let Tad touch on that.

是的。因此，首先，在我們的兩個契約中，我們對簽訂資本租賃的能力沒有限制。在許多情況下，這些租約是預付的，這意味著我們支付預付費用並且隨著時間的推移除了維護費之外不支付任何其他費用。估算的基礎利率取決於簽訂租約時的利率。我會讓 Tad 談一談。

Yes. The average which we disclosed in the 10-Q for all the leases is about 8%. And as Dave...

是的。我們在 10-Q 中披露的所有租賃的平均值約為 8%。而作為戴夫...

Right. But Tad -- right, which is not low. And then if you -- if that rises, your capital lease balance rises, like, let's say, went up to $15 million, $20 million. What's the new $15 million coming on at?

正確的。但是泰德——是的，這並不低。然後如果你 - 如果它增加，你的資本租賃餘額就會增加，比如說，增加到 1500 萬美元，2000 萬美元。新的 1500 萬美元是多少？

No. The lease is recorded when the route is accepted at the rate at that time, and it's not changed. So the rate used for the next month is the new range. And if the rate goes up, the value of the leases will actually come down on new leases.

不會。租約是在以當時的費率接受路線時記錄的，並且不會更改。因此，下個月使用的匯率是新範圍。如果利率上升，新租約的租約價值實際上會下降。

Understood.

明白了。

But the existing leases are not floating into...

但是現有的租約並沒有浮動到...

Yes, but they don't change.

是的，但它們不會改變。

Our next question comes from the line of Nick Del Deo of MoffettNathanson.

我們的下一個問題來自 MoffettNathanson 的 Nick Del Deo。

Dave, first, I wanted to ask kind of the same question I've asked since you announced the Sprint deal, which is basically, can you update us regarding customer interest and any commercial traction you've had in waves and dark fiber. It seems like it's been pretty positive to date, and it'd be interesting how it's evolved now that the sales team had a few months under their belt to sell waves and whether you've closed any dark fiber deals that you may have been negotiating pre-deal?

戴夫，首先，我想問自從你宣布與 Sprint 交易以來我就問過的相同問題，基本上，你能否向我們介紹一下客戶興趣以及你在波浪和暗光纖方面的任何商業吸引力。到目前為止，這似乎是非常積極的，而且很有趣的是，現在銷售團隊有幾個月的時間來銷售波浪，以及您是否已經完成了您可能一直在談判的任何暗光纖交易交易前？

So, 2 different answers to 2 different questions. On waves, which is a product that we've standardized and began selling on a resale agreement with Sprint. We've sold several dozen waves pre-closing and have a backlog of several hundred in the Q that we can now process since they are truly on-net. We no longer have a 2-step process to get those waves approved. We also looked at albeit a test bed, the Sprint Wave product and are simplifying that product to make selling even easier. We have integrated the ability to sell waves into our CRM system, which allows for instantaneous quoting as opposed to a multi-day process previously at Sprint. And I would say the demand for waves has actually been more robust than we anticipated.

因此，2 個不同的問題有 2 個不同的答案。 On waves，這是我們已經標準化並開始根據與 Sprint 的轉售協議銷售的產品。我們已經在關閉前售出了幾十波，並且在 Q 中有數百個積壓，我們現在可以處理它們，因為它們是真正的在線。我們不再採用兩步流程來批准這些波次。我們還研究了 Sprint Wave 產品（儘管是一個試驗台），並正在簡化該產品，使銷售更加容易。我們已經將銷售波浪的能力集成到我們的 CRM 系統中，它允許即時報價，而不是以前在 Sprint 的多天流程。我想說的是，對波浪的需求實際上比我們預期的要強勁。

Secondly, we've been surprised at the ability to cross-sell, meaning existing customers taking waves, but also we've had customers that were in our prospect funnel NetCentric customers that we haven't sold to that now are interested in buying from us because we can sell them both waves and transit. So we have laid out a target to grow the wavelength business from a run rate and acquisition of about $8 million, and that was purely a test product for T-Mobile to within 7 years, a $500 million revenue run rate for Cogent. We feel quite confident based on the backlog, we're probably going to beat our internal estimates of how quickly we will get there. So we remain really positive on the wavelengths.

其次，我們對交叉銷售的能力感到驚訝，這意味著現有客戶正在掀起波瀾，但我們也有一些客戶在我們的潛在漏斗中 NetCentric 客戶，我們現在還沒有賣給他們，現在有興趣從我們，因為我們可以同時出售波浪和中轉。因此，我們制定了一個目標，即在 7 年內將波長業務的運行率和收購額從大約 800 萬美元（這純粹是 T-Mobile 的測試產品）增長到 Cogent 的 5 億美元收入運行率。根據積壓情況，我們感到非常有信心，我們可能會超過我們內部對到達那裡的速度的估計。所以我們對波長保持非常積極的態度。

Dark Fiber is different. It's very route-specific. Some routes are in more demand than others. We quite honestly have a lot of experience as a buyer, not a lot of experience as a seller. And because these are long-term agreements, we're going to enter into them cautiously. We have actually only executed 1 dark fiber agreement that actually we couldn't consummate until the deal closed. So it was a conditional agreement. But we are going to be selective. We have not factored dark fiber into our revenue projections. We view that as additive. And I think we'll be prepared maybe in a few quarters to have enough experience on market demand to really lay out a realistic set of expectations for investors. But today, it's not in our guidance, it's not in kind of our forecast and it will be viewed as an opportunistic sale.

暗纖維是不同的。這是非常特定於路線的。有些路線比其他路線的需求量更大。老實說，作為買家，我們有很多經驗，但作為賣家的經驗卻不多。因為這些是長期協議，我們將謹慎地簽訂它們。我們實際上只執行了一項暗纖維協議，實際上我們在交易完成之前無法完成。所以這是一個有條件的協議。但我們會有所選擇。我們沒有將暗光纖計入我們的收入預測。我們認為這是附加的。而且我認為我們可能會在幾個季度內做好準備，以獲得足夠的市場需求經驗，真正為投資者制定一套切合實際的期望。但今天，它不在我們的指導中，不在我們的預測範圍內，它將被視為機會主義銷售。

Okay. That's all very encouraging, especially in waves. Should we think that ARPU for wave is being a few thousand bucks a month per unit, something in that range?

好的。這一切都非常令人鼓舞，尤其是在波浪中。我們是否應該認為 wave 的 ARPU 是每個單位每月幾千美元，在這個範圍內？

Yes, I think it will actually be a little bit higher than that, Nick. So today, the market is dominated by 100-gig waves, but there are still some 10-gig waves. The Sprint product divided the country into 3 zones, and it was sold on kind of a zone basis. Are you in Zone 1? Do you go between Zone 1 and 2 or Zone 1, 2 and 3, much like the London subway system. We're actually going to collapse that down to 2. We also don't have the same constraints in metro that they had where they typically had to go out and buy a metro link to then complete the wave sale. So I think we'll do -- we'll dippy down to 2. I think for 100-gig waves, probably the $2,500 range is the way to think about it. For 10-gig waves, probably $800, $900 is a reasonable price in the market. Again, a little bit of variance, whether it's 1 or 2 zones.

是的，我認為它實際上會比這高一點，尼克。所以今天，市場以 100 吉波為主，但仍有一些 10 吉波。 Sprint 產品將國家分為 3 個區域，並按區域銷售。你在1區嗎？您是在 1 區和 2 區之間還是在 1、2 和 3 區之間穿行，就像倫敦地鐵系統一樣。我們實際上要將其降低到 2。我們在地鐵方面也沒有與他們通常必須出去購買地鐵線路才能完成波浪銷售的相同限制。所以我認為我們會做——我們會下降到 2。我認為對於 100 兆波，可能 2,500 美元的範圍是考慮它的方式。對於 10 兆波，大概 800 美元，900 美元是市場上的合理價格。同樣，有一點差異，無論是 1 個還是 2 個區域。

And then there is a nascent but developing 400-gig wave market that we'll participate in. I think that will become realistic in '24. And I would suspect the percentages of 10-gig waves to continue to decline and eventually the 400s will replace some of the 100s and become its own category. While we have not established pricing for that, and there's not really much of an existing market today, the pattern has been that if you 4x the capacity, you roughly double the price, so call it a $5,000 product. I think it's probably a reasonable way to think of a 400-gig wave, but that's something we won't be selling until sometime in '24.

然後是我們將參與的新生但正在發展的 400 兆波市場。我認為這將在 24 世紀成為現實。而且我懷疑 10-gig 波的百分比會繼續下降，最終 400s 將取代部分 100s 並成為自己的類別。雖然我們還沒有為它確定定價，而且今天的現有市場並不多，但如果你的容量增加 4 倍，你的價格就會大約翻一番，所以稱它為 5,000 美元的產品。我認為這可能是考慮 400 兆波的合理方式，但我們要到 24 年的某個時候才會出售這種產品。

Okay. Okay. That's super helpful. And maybe Dave, can we just touch on kind of traffic growth and NetCentric growth? I think you said traffic growth was 3% sequentially kind of soft for what's seasonally usually a strong quarter for you. NetCentric growth decelerated quite noticeably Q-over-Q. Anything we should be aware of or concerned about when viewing those trends? And what should we expect out of that business from here kind of near term and long term?

好的。好的。這非常有幫助。也許戴夫，我們可以談談流量增長和 NetCentric 增長嗎？我想你說流量增長是 3%，對於你來說通常是季節性強勁的季度來說有點疲軟。 NetCentric 增長明顯 Q-over-Q 減速。查看這些趨勢時，我們應該注意或關注什麼？從短期和長期來看，我們應該對這項業務有什麼期望？

Yes. So we grew 3% sequentially, 20% quarter over -- year-over-year. There was some deceleration. It tends to be lumpy around customers just as price per megabit of new sales. Now over the long run tends to kind of even out in the quarter, more of our sales were to very large customers, that kind of reversed the trend of the past year, where it was more smaller customers. The trend is still international growing faster than domestic, and it also is a trend of us gaining market share. I would suspect the NetCentric business that on a revenue basis, constant currency was a 10.2% grower. It's still above long-term trend line. It is slower than the peak of the pandemic, but it does appear the funnel looks pretty good, and we will probably continue to grow above trend line for the next year. That's probably the visibility we have.

是的。因此，我們連續增長 3%，同比增長 20%。有一些減速。就像每兆新銷售的價格一樣，它在客戶周圍往往是起伏不定的。現在從長遠來看，本季度趨於平衡，我們更多的銷售是針對非常大的客戶，這扭轉了過去一年的趨勢，即更多的小客戶。趨勢仍然是國際增長快於國內，這也是我們獲得市場份額的趨勢。我懷疑 NetCentric 業務在收入基礎上，固定貨幣增長了 10.2%。它仍然高於長期趨勢線。它比大流行的高峰期要慢，但漏斗看起來確實不錯，明年我們可能會繼續增長到趨勢線以上。這可能就是我們的知名度。

Our next question comes from the line of [Michael Collins] from Citi.

我們的下一個問題來自花旗的 [Michael Collins]。

Curious if we could go back to the corporate segment. And just curious if you can unpack a little bit more about the types of demand you're seeing in terms of the connections per customer in the corporate building and then the demand around VPN and off-net. And for the other services beyond the core connection that you offer, do you see that as a tailwind for corporate revenue growth in the future or a possible headwind in some way?

很好奇我們是否可以回到企業部門。只是好奇您是否可以根據公司大樓中每個客戶的連接以及圍繞 VPN 和離線的需求來進一步了解您所看到的需求類型。對於您提供的核心連接之外的其他服務，您認為這是未來企業收入增長的順風還是某種程度上可能的逆風？

Yes. So I think 3 different questions there and one. So the vacancy rate in the building is materially up. So there are less businesses. Even though the new leases are smaller in response to Walt's question, they're not a material part of the base yet. So the TAM is today smaller than it was pre-pandemic, but it is growing. Second, the average connection size is getting bigger, which is pulling up ARPU. Third, more and more customers, not yet quite a majority but a significant minority are also taking ports in data centers. That's a kind of post-pandemic trend and the realization that they need redundancy for their ad hoc VPN concentration.

是的。所以我認為那裡有 3 個不同的問題和一個。因此，建築物的空置率大幅上升。所以生意比較少。儘管根據 Walt 的問題，新租約的規模較小，但它們還不是基地的重要組成部分。因此，今天的 TAM 比大流行前要小，但它正在增長。其次，平均連接數越來越大，拉高了ARPU。第三，越來越多的客戶，雖然不是大多數，但也佔了很大一部分，他們也在使用數據中心的端口。這是一種大流行後趨勢，並意識到他們需要冗餘來集中臨時 VPN。

The fourth point is dedicated VPNs, whether they be VPLS or SD-WAN are less important than they were pre-pandemic. More customers are willing to just use the Internet, but VPN still remain approximately 16% of our total revenues and about 16% of new sales. So we have not seen a significant shift away from encrypted or encapsulated services over the Internet, where the shift is away from VPNs that don't ride the Internet. And while we saw a slowdown in the rate of MPLS conversion during the pandemic, we're starting to see a reacceleration of the transition to either DIA or VPLS or SD-WAN. So I don't think that is a material headwind.

第四點是專用 VPN，無論是 VPLS 還是 SD-WAN，都沒有大流行前那麼重要。更多的客戶願意只使用互聯網，但 VPN 仍然占我們總收入的大約 16% 和新銷售額的大約 16%。因此，我們沒有看到從互聯網上的加密或封裝服務發生重大轉變，而這種轉變是遠離不依賴互聯網的 VPN。雖然我們看到 MPLS 轉換率在大流行期間有所放緩，但我們開始看到向 DIA 或 VPLS 或 SD-WAN 的過渡重新加速。所以我不認為這是一個重大的逆風。

The final part of your question results in branch offices. There is a continued grooming of companies removing branch offices, shutting them down, that is a headwind. But that has been actually more than offset by the availability of fiber to more endpoint locations. All of the regional fiber overbuilds, which are predominantly focused right now on residential customers also expand the commercial footprint. And we are now able to buy off-net fiber-based services in over 5 million commercial buildings. That's a 25% increase over the past 18 months. I mean that's a pretty rapid increase and where we can sell off-net. And as a result of that, we can actually now see off-net revenues continuing to grow, even though ARPUs are declining because of competitive pressures between the various off-net providers. And if you look at our numbers, that's really been the case for the past couple of years, and that trend is going to continue. So when we kind of net out both the headwinds and tailwinds, I think that they're kind of neutral. And we're really dependent on corporate customers just making a decision and not procrastinating than necessarily going out of business. It was really the premise of one of the earlier questions.

您問題的最後一部分導致分支機構。不斷有公司撤出、關閉分支機構，這是不利因素。但這實際上已經被更多端點位置的光纖可用性所抵消。目前主要集中在住宅客戶的所有區域光纖過度建設也擴大了商業足跡。我們現在能夠在超過 500 萬座商業建築中購買基於光纖的網外服務。這比過去 18 個月增加了 25%。我的意思是這是一個相當快速的增長，我們可以在其中進行離線銷售。因此，我們現在實際上可以看到網外收入繼續增長，儘管 ARPU 由於各種網外提供商之間的競爭壓力而下降。如果你看看我們的數字，過去幾年確實如此，而且這種趨勢將繼續下去。因此，當我們排除逆風和順風時，我認為它們是中性的。而且我們真的依賴於企業客戶做出決定而不是拖延，而不是一定要倒閉。這確實是先前問題之一的前提。

Do you go back to some of those free promotions you used to get in and show how you work and how the service performs and then get the attacks when they're ready to renew with whatever cycle that they're on? Is that the -- was that a good approach last time that you used it?

您是否會回到以前參加的一些免費促銷活動並展示您的工作方式和服務的執行方式，然後在他們準備好以任何週期更新時進行攻擊？這是您上次使用它時的好方法嗎？

It was an excellent approach. We are not doing that at this point in time. But promotions are meant to be temporary. And our expectation is we will have some try and buy promotions later this year.

這是一個很好的方法。我們目前沒有這樣做。但促銷活動是暫時的。我們的期望是今年晚些時候我們將有一些先試后買的促銷活動。

Our next question comes from the line of Frank Louthan from Raymond James.

我們的下一個問題來自 Raymond James 的 Frank Louthan 的台詞。

Can you give us an idea of some of the main areas where the Sprint unit is seeing the EBITDA pressure? And what are some of the things you can do to get those costs out. I think you said it would take maybe 2 years to get to breakeven, how quickly can you do that? And then lastly, when can you begin to take down some circuits and move some of that traffic over to GMG to get some better savings?

您能否介紹一下 Sprint 部門看到 EBITDA 壓力的一些主要領域？您可以採取哪些措施來降低這些成本。我想你說過可能需要 2 年才能達到收支平衡，你能多快做到這一點？最後，您什麼時候可以開始拆除一些電路並將部分流量轉移到 GMG 以獲得更好的節省？

So we actually started the process of moving circuits pre-closing through a series of agreements with T-Mobile. Our primary area of focus was initially international. And the reason for that is 100% of Sprint's network outside of the U.S. was on leased facilities. Almost all of Cogent's network outside of the U.S. is on IRU fiber. We are continuing that process and anticipate being able to bring all of the international savings out probably in the first year. Domestically, it's more difficult for a couple of reasons. One is a lot more customers. Cogent is approximately 75% on-net. Sprint is approximately 7% on-net. So we are migrating several thousand customers from being off-net to on-net. That process has begun, but just because of the customer count and customers' contractual terms, it's going to take more than a year to complete that exercise.

因此，我們實際上通過與 T-Mobile 達成的一系列協議開始了移動電路的過程。我們的主要關注領域最初是國際化的。原因是 Sprint 在美國以外的網絡 100% 都在租賃設施上。 Cogent 在美國以外的幾乎所有網絡都使用 IRU 光纖。我們正在繼續這個過程，並預計能夠在第一年內將所有國際儲蓄都拿出來。在國內，由於幾個原因，這更加困難。一個是更多的客戶。 Cogent 在網上大約佔 75%。 Sprint 的淨利潤率約為 7%。因此，我們正在將數千名客戶從網外遷移到網上。這個過程已經開始，但僅僅因為客戶數量和客戶的合同條款，完成這項工作將需要一年多的時間。

We also will be taking out lease circuits that Sprint had domestically. We will be eliminating some of that Sprint IRU fiber because it's duplicative with what we have. We also will be densifying our off-net footprint and consolidating our contracts. Now because there are existing Sprint take-or-pay contracts that still have term, we -- no matter how fast we move, we can't take all of those costs out in year 1. And that's why we've laid out this waterfall of cost savings. The work has already begun. We got the burn rate at signing down from negative $300 million of EBITDA to negative $190 million or $180 million between USD180 million and USD190 million at closing, and we'll get that down to negative $80 million within a year after closing and get it down to 0, 2 years post closing, which when you layer on the additional transit revenue that we'll be receiving from T-Mobile means that we're cash flow accretive from day 1. We're pretty confident that we're moving as quickly as possible and investors will see the savings.

我們還將租用 Sprint 在國內擁有的電路。我們將淘汰一些 Sprint IRU 光纖，因為它與我們現有的光纖重複。我們還將加強我們的網外足跡並鞏固我們的合同。現在因為現有的 Sprint 照付不議合同仍然有期限，我們 - 無論我們移動多快，我們都不能在第一年就把所有這些成本都拿出來。這就是我們制定這個的原因成本節約的瀑布。這項工作已經開始。我們在簽約時的燒錢率從負 3 億美元的 EBITDA 下降到負 1.9 億美元或 1.8 億美元，在收盤時介於 1.8 億美元和 1.9 億美元之間，我們將在收盤後一年內將其降至負 8000 萬美元，並將其降下來到 0，關閉後 2 年，當你加上我們將從 T-Mobile 收到的額外運輸收入時，這意味著我們從第一天起就在增加現金流。我們非常有信心我們正在移動盡快，投資者將看到儲蓄。

Our next question comes from the line of Brandon Nispel from KeyBanc Capital Markets.

我們的下一個問題來自 KeyBanc Capital Markets 的 Brandon Nispel。

It's Evan Young on for Brandon. I was just looking to see if you could provide any more color on your OpEx throughout the rest of the year. And if you think that Q1 would be the high watermark for the year?

埃文·揚替補布蘭登。我只是想看看您是否可以在今年餘下的時間里為您的 OpEx 提供更多顏色。如果您認為 Q1 將是今年的高水位線？

Yes. So Q1 tends to be our highest quarter in terms of extraordinary expenses or audit expenses. We did have some bonuses last quarter in Q4 that were extraordinary to offset CPI increases, so instead of CPI, we granted onetime bonuses. But I think we should continue to see some improvement in SG&A. Part of that, though, will be offset by our anticipated growth in sales force. We also will have a number of onetime expenses on the OpEx side related to perhaps further severance and employees. Many of those costs under our purchase agreement with Sprint or reimbursed by Sprint.

是的。因此，就非常費用或審計費用而言，第一季度往往是我們最高的季度。我們在第 4 季度的上個季度確實獲得了一些非常好的獎金來抵消 CPI 的增長，因此我們授予了一次性獎金而不是 CPI。但我認為我們應該繼續看到 SG&A 方面的一些改進。不過，其中一部分將被我們預期的銷售人員增長所抵消。我們還將在 OpEx 方面有一些一次性費用，這些費用可能與進一步的遣散費和員工有關。根據我們與 Sprint 的採購協議或由 Sprint 報銷的許多費用。

I'll let Tad maybe give you any other detail.

我會讓 Tad 給你任何其他細節。

Yes. The first quarter, Dave mentioned and I think in the prepared remarks, we mentioned, obviously, we have the resetting of payroll taxes and there's also a lot of vacations taken in the fourth quarter, and you're rebuilding the vacation reserves in the first quarter. So those cumulative amounts are a couple of million dollars in the first quarter, plus-plus compared to the fourth quarter. We're also -- we are going to have in the second quarter, we had our annual sales meeting. So that's going to be about $1.5 million in a nonrecurring expense. We had that in April. So net-net, we should see a decline in SG&A from Q1 to Q2, depending upon how many sales reps we've managed to hire by the end of the quarter.

是的。第一季度，戴夫提到，我想在準備好的發言中，我們提到，很明顯，我們有工資稅的重置，第四季度也有很多假期，你在第一季度重建假期儲備四分之一。因此，第一季度的累計金額為幾百萬美元，與第四季度相比有所增加。我們也——我們將在第二季度召開年度銷售會議。因此，這將是大約 150 萬美元的非經常性費用。我們在四月份就有了。因此，我們應該看到 SG&A 從第一季度到第二季度有所下降，這取決於我們在本季度末成功聘用了多少銷售代表。

There are no further questions at this time. I turn the call back over to our speakers.

目前沒有其他問題。我將電話轉回給我們的發言人。

All right. Well, I'd like to thank investors for their time today. I appreciate the interest in Cogent. Hopefully, we've given you some additional granularity and color on our future reporting. We also want to provide this information in a consistent way that will help you model Cogent, hold us accountable for the commitments that we're making and give you the clarity around the key trends in our business. So again, I want to thank everyone for their time. We look forward to seeing you soon at conferences and are most excited about the opportunity to take the Sprint asset, which has been underappreciated and under use and generate meaningful free cash flow quickly. Thank you all very much. Take care. Bye-bye.

好的。好吧，我要感謝投資者今天的時間。我感謝對 Cogent 的興趣。希望我們在未來的報告中為您提供了一些額外的粒度和顏色。我們還希望以一致的方式提供此信息，以幫助您塑造 Cogent，讓我們對我們所做的承諾負責，並讓您清楚地了解我們業務的主要趨勢。所以，我要再次感謝大家的時間。我們期待很快在會議上見到您，並且很高興有機會利用 Sprint 資產，該資產一直被低估和使用，並迅速產生有意義的自由現金流。非常感謝大家。小心。再見。