Cogent Communications Holdings Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Sorry, Dave, if I cut you off. Can you describe that type of transport again? Sorry.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : What was -- how much data center did you get again?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : If you don't mind me asking, I mean, won't that cost like $1 billion to upgrade? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 09, 2023 / 6:05PM, CCOI.OQ - Cogent Communications Holdings Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Are these colos -- would you think of them as the carrier neutral or we allow other carriers into there?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Sorry, what's the average power for each facility?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And so if that was fully release, what's the -- how much revenue we can get per year for 100 watts call it?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Got it. I mean, it seems like it could be higher than that. I mean, they invested like $2 billion in this data center infrastructure.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Got it. Well, yeah. And it seems like it's a perfect location to do inferencing at.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : What is the margin out right now, roughly the EBITDA margin, negative 20%? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 09, 2023 / 6:05PM, CCOI.OQ - Cogent Communications Holdings Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Okay. And that's a big switch.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Absolutely. Just incredible. So I mean, what network are they on now, these products?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Okay. So you're going to migrate it over to your network.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : That makes all the sense in the world. So but why -- where's the cash going out the door? At this point, like why are they losing so much money of the 70%? If they have the network up and running, yeah, where's the cash go?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Got it.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : So maybe going down the first two. Do you have a sense of how many employees you'll end up with, and how long will that take to end the timing of that? And also, how long will it take to migrate the traffic onto your own? And can you migrate almost all this onto your own network, and how long would that take?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Okay. And you don't think there's -- anyway, to really accelerate that, it just takes process. It takes time. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 09, 2023 / 6:05PM, CCOI.OQ - Cogent Communications Holdings Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Wow. You didn't really mention -- so these enterprise customers -- I mean, enough of enough, but you can double, triple, quadruple price for some of these services. And they can -- it's their choice at the end of the day, right? I mean, you didn't really talk about pricing at all.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And Dave, are you going to put that legacy Sprint enterprise customer base into your existing corporate segment in terms of I guess structure salespeople? All the operating systems that you have, billing systems, everything else, will that convert it in? So you'll end up at the day where really three different units? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 09, 2023 / 6:05PM, CCOI.OQ - Cogent Communications Holdings Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Okay. So enterprise will be in a new --

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : A new line. And then -- but you don't report by product.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Great. I mean, why not --

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : I mean, personally, Dave, we love more of the detail in the press release. Just makes our life a lot easier at some point. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 09, 2023 / 6:05PM, CCOI.OQ - Cogent Communications Holdings Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Well, I'm also afraid, you give a lot of detail on the earnings call. That's not in the press release. I should kind of clarify a little bit more. We do get a lot a lot of detail in different locations. It's just nice to have it all in one location.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : I can't believe you're able to put that all together for this earnings call. You, guys, must be working every day, every week, and every night. Congratulations.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : So obviously, when you acquire asset, you said there was a few surprises. And I'm sure there were some positive and some negative surprises just like when you get married. Any -- on the balance, are things coming out more positive or more negative or can you say it?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Well, I mean, that might help out on the free cash flow a little bit next year, I would think, but not to put words in your mouth (inaudible). And is T-Mobile going to be -- are they going to be using you, if you think?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : I apologize. That's very helpful. I have a very important questions and we have 1 minute. Have you changed the timing of the breakeven on the EBITDA for the acquired business? I think you just said 36 months, if I heard correctly. Is it always been 36 months?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : I thought that -- I absolutely thought that was the case. Someone thought that it was two years. Well, Dave, we're going to talk tomorrow morning in your earnings, and I'll talk to you afterwards. So you'll be seconding by the end of the week. But I really -- once again, it's just fascinating. You have huge amount of information up. I encourage you maybe to do an Analyst Day or something to go through this because it's unbelievably complicated. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 09, 2023 / 6:05PM, CCOI.OQ - Cogent Communications Holdings Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Dave, just my last comment, I mean, you bought those Internet networks 20 years ago -- 21, 22 years ago right before the Internet really took off. You're essentially buying all this AI infrastructure right before AI is really about to take off. So that's a lot. I know it's a huge risk and a lot, a lot of work, but very, very smart.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Take care and bye, everybody.