COGENT COMMUNICATIONS HOLDINGS, INC. (CCOI) Business

ITEM 1. BUSINESS

Description of business

We are a facilities-based provider of low-cost, high-speed Internet access, private network services, optical wavelength and optical transport services and data center colocation space and power. Our network is specifically designed and optimized to transmit packet-routed data. We deliver our services to a diverse global base of businesses, communications service providers and other bandwidth-intensive organizations in 57 countries across North America, Europe, South America, Asia, Oceania and Africa. We are a Delaware corporation headquartered in Washington, DC.

We provide our on-net Internet access and private network services to corporate, net-centric and enterprise customers. Our corporate customers are typically located in multi-tenant office buildings and consist of law firms, financial services firms, advertising and marketing firms, health care providers, educational institutions and other professional services businesses. Our net-centric customers include access networks comprised of other internet service providers (“ISPs”), telephone companies, mobile operators and cable television companies as well as bandwidth-intensive users that leverage our network to deliver content to end users. Content delivery customers include over the top media service providers, content delivery networks, web hosting companies, and commercial content and application software providers. These net-centric customers generally receive our services in carrier neutral colocation facilities or in our own data centers. We operate data centers throughout North America and Europe that allow our customers to collocate their equipment and access our network. Additionally, as part of our acquisition of the Cogent Fiber Business (as defined below) we acquired a number of “Enterprise” customers that are larger than our historical customer base. We have continued to serve these acquired Enterprise customers and have expanded our target market to include these larger Enterprise customers.

In addition to on-net services delivered via our own facilities, we provide Internet access and private network services to customers not located in buildings directly connected to our network. We provide these “off-net” services primarily to corporate customers using third-party carriers’ circuits to provide the “last mile” portion of the link from the customers’ premises to our network. We also provide certain non-core services that resulted from acquisitions, including the acquisition of Cogent Fiber Business, although we do not actively sell these non-core services.

In connection with our acquisition of Cogent Fiber Business, we introduced optical wavelength and optical transport services over a network that is generally independent of our legacy IP network. We offer these wavelength and optical transport services to customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating their own network infrastructure.

Acquisition of the Cogent Fiber Business

On May 1, 2023 (the “Closing Date”), Cogent Infrastructure, Inc., (now Cogent Infrastructure, LLC), a Delaware corporation and our direct wholly owned subsidiary (the “Buyer” or “Cogent Infrastructure”), closed on its acquisition of the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications and its Subsidiaries (the “Cogent Fiber Business”) in accordance with the terms and conditions of the Membership Interest Purchase Agreement (the “Purchase Agreement”), dated September 6, 2022, by and among us, Sprint Communications LLC, a Kansas limited liability company (“Sprint Communications”) and an indirect wholly owned subsidiary of T-Mobile US, Inc., a Delaware corporation (“T-Mobile”), and Sprint LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of T-Mobile (the “Seller”). On the Closing Date, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) of Wireline Network Holdings LLC, a Delaware limited liability company that, following an internal restructuring and divisive merger, holds Sprint Communications’ assets and liabilities relating to the Cogent Fiber Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”).

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Corporate Structure after the Closing Date

The Company operates through its two direct, wholly owned subsidiaries, Cogent Infrastructure and Cogent Communications Group, LLC (“Cogent Group”).

Cogent Infrastructure holds the Cogent Fiber Business assets and operations. Following the Closing Date, Cogent Infrastructure, through its subsidiaries, owned, among other things, the Sprint Network (as defined below), consisting of approximately 23,500 route miles of owned fiber optic cable in the continental United States, a portfolio of owned and leased properties totaling approximately 1.9 million square feet, Sprint operating subsidiaries in approximately 10 countries worldwide, vendor and supply agreements and 9.9 million IPv4 addresses. Through a series of intra-Company transactions, Cogent Infrastructure transferred its interest in the Sprint customer contracts, vendor and supply agreements and the majority of its IPv4 address holdings to Cogent Group, or its subsidiaries. Cogent Group has entered into long-term IRU and facilities prepaid lease agreements with Cogent Infrastructure.

On May 2, 2024, Cogent IPv4 LLC (the “IPv4 Issuer”), a special-purpose, bankruptcy remote, indirect wholly owned subsidiary of the Company, issued $206.0 million aggregate principal amount of 7.924% secured IPv4 address revenue notes, Series 2024-1 Class A-2 (the “Existing IPv4 Notes”), with an anticipated term ending in May 2029 (such anticipated repayment date, the “ARD”), in an offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). On April 11, 2025 (the “New IPv4 Notes Closing Date”), IPv4 Issuer issued $174.4 million aggregate principal amount of 6.646% secured IPv4 address revenue notes, Series 2025-1 Class A-2 (collectively, the “New IPv4 Notes”), with an anticipated repayment date in April 2030, in an offering exempt from registration under the Securities Act. Our Existing IPv4 Notes and our New IPv4 Notes are collectively referred to as our $380.4 million “IPv4 Notes”.

Cogent Group is the parent of Cogent Communications, LLC (formerly Cogent Communications, Inc.), which was our sole operating company prior to the Closing Date, and Cogent Group is the issuer of our $750.0 million of 7.00% senior unsecured notes due in June 2027 of which $450.0 million were issued in June 2022 (“2027 Notes”) and $300.0 million were issued in June 2024 (“2027 Mirror Notes”) and our $600.0 million of 6.50% senior secured notes due July 2032 (“2032 Notes”) that were issued in June 2025. Cogent Group owns, among other things, our indefeasible-right-of-use (“IRU”) network comprised of a portion of the Cogent Infrastructure network and third-party networks, leased Cogent data centers, Cogent operating subsidiaries in 57 countries worldwide, our customer base except for certain IPv4 leasing customers owned by the IPv4 Issuer, and over 25 million IPv4 addresses. Cogent Group also receives payments due from T-Mobile for IP transit services provided in connection with the Transaction.

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We have moved and may continue to move, to the extent permitted by and in compliance with the indentures governing our 2027 Notes, 2027 Mirror Notes, 2032 Notes and our IPv4 Notes, certain assets and obligations between the companies owned by Cogent Infrastructure and Cogent Group to better align these assets and obligations with our business and operations and for general corporate purposes.

Competitive Advantages

We believe we address many of the data communications needs of a diverse group of businesses, communications service providers and other bandwidth-intensive organizations by offering high-quality, high-speed Internet access, optical transport and optical wave services, and private network services at attractive prices. We believe that our organization has the following competitive advantages:

Low Cost of Operation. We believe that the wireline telecom industry is undergoing, and will continue to face, significant price deflation for its applications and services. This price deflation is a result of a variety of factors including increased competition, enhanced substitutability of certain products and services and the continued impact of Moore’s Law, which has driven down the cost of technology, particularly for fiber optic Wavelength Division Multiplexing equipment and optically interfaced routers. Faced with the backdrop of continued price deflation in our industry, we have made a series of discreet choices around our network design, operating strategy and product offerings that are consistent with our objective of becoming the low-cost operator in our industry. Since our initiation of operations, this strategy has resulted in a rapid decline in our cost to transmit bits, which has increased our margins and decreased our capital intensity, excluding capital expenditures for the repurposing of acquired Sprint assets, as measured by our capital expenditures per total revenues. Important components of our low-cost operating strategy include:

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Our IP Network is connected to a total of 3,579 buildings that are located in 305 metropolitan markets globally. These buildings include:

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Our MTOBs are located in major North American cities where we offer our services to a diverse set of high-quality corporate customers within close physical proximity of each other. Our CNDCs are located in North America, Europe, Asia, South America, Oceania and Africa where our net-centric customers directly interconnect with our network.

Our Optical Wave Network is connected to 1,068 wave enabled locations located in 150 metropolitan markets in the United States, Canada and Mexico. All of our wavelength services are on-net as they originate and terminate on our Optical Wave Network.

Our Cogent data centers, including our Cogent Edge data centers, are directly connected to our network and operate across the United States and in Europe, and comprise:

We believe that these network points of presence strategically position our networks to attract high levels of Internet traffic and maximize our revenue opportunities and profitability.

Balanced, High-Traffic IP Network. Since its inception, our IP Network has grown significantly in terms of its geographic reach, customer connections, and traffic.

We currently serve:

Because of the number of customers who distribute (content providers) and receive (access networks) content on our IP Network, we believe that the majority of all the traffic remains “on-net” by both originating and terminating on our IP Network. This control of traffic is an important differentiator as it increases our service reliability and speed of traffic delivery. The increasing share of traffic delivered from content providers to access networks also enhances our margins as we are compensated by both the originating customer and the terminating customer. The breadth of our IP Network, extensive size of our customer base, and the volume of our traffic enables us to be one of a handful of Tier 1 networks that are interconnected with other Tier 1 networks on a settlement-free basis. This Tier 1 network peering status broadens our geographic delivery capability and materially reduces our network costs.

Proven and Experienced Management Team. Our senior management team is composed of seasoned executives with extensive expertise in the telecommunications industry as well as knowledge of the markets in which we operate. The members of our senior management team have an average of over 20 years of experience in the telecommunications industry and many have been working together at the Company for several years. Several members of the senior management team have been working together at the Company since 2000. Our senior management team has designed and built our IP Network and, later, our Optical Wave Network, led the integration of network assets we acquired through 14 significant acquisitions and managed the expansion and growth of our business. A number of the members of senior management who joined us as part of our acquisition of the Cogent Fiber Business have similar experience and tenure in both the telecommunications industry and at the Cogent Fiber Business. We believe that our management team has and will continue to successfully manage the integration of the Cogent Fiber Business into our current operations.

Our Strategy

We intend to remain a leading provider of high-quality, high-speed Internet access and private network services and to continue to improve our profitability and cash flow. The principal elements of our strategy include:

Grow our Corporate Customer Base. Our on-net corporate customers are typically small to medium-sized businesses connected to our IP Network through MTOBs or connected to our IP Network or our Optical Wave Network through one of our on-net CNDCs. We generally sell two types of services to our corporate customers: dedicated internet access and private network services. We sell a

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small amount of optical wave services to our corporate customers. We typically sell dedicated internet access at the same price per connection as our competitors, but our customers benefit from our significantly faster speeds and rapid installation times. These customers are increasingly integrating off-site data centers and cloud services into their IT infrastructure in order to take advantage of the safety, security and redundancy that is offered by locating company processing power, storage and software at a data center. An important part of this new infrastructure is a high-speed, dedicated internet connection from the corporate premises to the data center and the Internet and from one corporate premises to other corporate premises. We believe that the importance of data centers will increasingly lead tenants to reconfigure their communications infrastructure to include dedicated Internet access across their locations.

Expand our Profitable Business with Enterprise Customers. In conjunction with our acquisition of the Cogent Fiber Business, we acquired a number of larger enterprise customers. We have continued to provide our core services to enterprise customers and elected to provide MPLS based VPN as well as VPLS services, a new service for these customers, but continue to terminate unprofitable services to these customers at the end of their current term. We have also elected to terminate certain unprofitable customer locations and, in limited circumstances, ceased providing services in certain countries where we could not do so economically. We have not previously focused our sales efforts on larger enterprise customers. Since the acquisition of the Cogent Fiber Business, we have formed dedicated sales personnel who are tasked with preserving existing business with and seeking new sales from enterprise customers.

Increase our Share of the Net-Centric IP Market. We are currently one of the leading providers of high-speed Internet access to a variety of content providers and access networks across the world. We intend to further load our high-capacity IP Network as a result of the growing demand for high-speed Internet access generated by these types of bandwidth-intensive applications such as over-the-top media services, online gaming, video, Internet of Things, voice over IP, remote data storage, and other services. We expect that we will continue to grow our shares of these segments by offering our customers a series of attractive features including:

Large and dedicated salesforce – Our team of net-centric sales professionals is one of the largest salesforces in this industry segment and enables us to better serve this customer segment while also identifying new sales opportunities and gaining new business and customers.

Increase our Share of the Optical Wavelength Market. We offer 10 Gbps, 100Gbps and 400 Gbps optical wavelength and optical transport services to our net-centric customers who require these high-bandwidth dedicated point-to-point services. We intend to become one of the leading providers of optical wavelength services in North America. Building upon the foundation provided by the assets of the Cogent Fiber Business, we have created, and continue to expand, our Optical Wave Network to provide optical wavelength services to hyper-scalers and other net-centric customers who require optical wave services. We believe that we offer our customers the following:

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Pursue On-net Customer Growth to Corporate and Net - centric Customers. Our high-capacity networks provide us with the ability to add a significant number of customers to either network, depending on the service offering, with minimal direct incremental costs. We intend to increase usage of our networks and operational infrastructure by adding customers in our existing on-net buildings, as well as developing additional markets and connecting more MTOBs and CNDCs to our IP Network and connecting more CNDCs to our Optical Wave Network. We emphasize our on-net services because they generate greater profit margins and we have more control over service levels, quality and pricing, and our on-net services are provisioned in considerably less time than our off-net services. Our networks connect directly to our on-net customers’ premises and we pay no local access (“last mile”) charges to other carriers to provide our on-net services.

Continue to Improve our Sales Efforts and Productivity. A critical factor in our success has been our investment and focus on our sales and marketing efforts. We seek to maintain a consistent level of sales productivity as measured by the number of connections sold per salesperson per month, considering adjustments to the changing mix of products sold and installed. In order to gain market share in our targeted businesses, we expect to continue our sales efforts including introducing strategies and tools to optimize and improve our sales productivity. We also intend to leverage the skills and relationships of our sales force to sell our expanded service offerings, in particular, optical wavelength and optical transport services. We have developed several training programs that are directed toward increasing our sales representative tenure and increasing our sales representative productivity. In addition, when consistent with their job description and responsibilities, we require all of our employees to work in the office on a full-time basis, thereby providing additional opportunities for management coaching and oversight in order to increase productivity.

Expand our Off-net Corporate and Enterprise Internet Access and VPN Business. We have agreements with over 740 national and international carriers providing us last mile network access to over 6 million commercial buildings that are lit by fiber optic cable in the countries we serve and that are not currently served by our network. We believe these agreements broaden our addressable market for corporate dedicated Internet access and private network services and enhances our competitive position through the ability to provide enterprise-wide connectivity for corporate customers. In order to take advantage of this large set of commercial buildings, we have developed an automated process to enable our salesforce to identify opportunities in the off-net market for dedicated Internet access and private network services and to quickly offer pricing proposals to potential customers. We continue to negotiate reduced pricing under our numerous carrier agreements that enable us to reduce our cost of off-net services, which enhances our competitive position in the marketplace.

Expand our Product Offerings to Include Wavelength and Optical Transport Services. In connection with our acquisition of the Cogent Fiber Business, we expanded our offerings to include optical wavelength and optical transport services over our Optical Wave Network. We are selling these services to our existing customers, customers acquired with the Cogent Fiber Business and to new customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating network infrastructure. As of December 31, 2025, we offered wavelength services in 1,068 wave-enabled locations in the United States, Mexico and Canada. We believe our wavelength service has the advantages of unique routes, ubiquitous service locations, faster provisioning times and lower prices.

Expand our Data Center Footprint. We currently operate 187 Cogent data centers across the United States and Europe, including:

●100 larger Cogent “classic” data centers; and

●87 smaller Cogent edge data centers.

In connection with our acquisition of the Cogent Fiber Business, we acquired multiple Sprint facilities that previously housed Sprint equipment. We evaluated the suitability of these facilities for conversion to commercial data center space and began repurposing suitable facilities. Repurposing these facilities included removing unused, obsolete equipment and racks, converting many locations from DC power to AC power, and upgrading or installing new HVAC systems, uninterruptable power supplies, backup generators and fire suppression systems as well as other structural changes. By December 31, 2025, we had converted the former Sprint facilities into 52 Cogent data centers and 87 Cogent edge data centers. In connection with this conversion process, we also decommissioned certain legacy Cogent data centers.

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Increase our Leasing of IPv4 Address Space. We lease IPv4 address space to our customers, both on a standalone basis and as a complement to a customer’s Internet access services with us. Our IPv4 Issuer is our primary lessor of IPv4 address space with the remainder leased by our other operating subsidiaries. We also provide a small number of free IPv4 addresses to our dedicated Internet access customers. We currently own approximately 38 million IPv4 addresses. As of December 31, 2025, we were leasing 15.3 million of our IPv4 addresses to our customers on contracts with service terms ranging from one month to five years. We intend to continue to lease IPv4 addresses to our customers as well as explore alternatives for monetizing our IPv4 address inventory.

Monetize Acquired Data Center Facilities. We are actively marketing the sale or lease of 24 data center facilities acquired in the Transaction. In October 2025, we entered into a non-binding letter of intent “(LOI”) for the sale of two data center facilities and the associated land for $144.0 million in cash. The LOI included certain contingencies, including the completion of further due diligence by the prospective buyer and negotiation and execution of a definitive purchase and sale agreement, and has since been terminated by the parties. We have resumed active marketing of the two data center facilities that were the subject of the LOI.

Our Networks

We operate two distinct networks for our customers, our IP Network for the provision of Internet-based services and our Optical Wave Network for the provision of optical wavelength services. Each of these networks is comprised of in-building facilities, metropolitan optical networks, metropolitan traffic aggregation points and inter-city transport facilities. We believe that we deliver a high level of technical performance because our IP Network is optimized for packet routed traffic and our Optical Wave Network is optimized for optical wavelength services. We believe that our IP Network is more reliable and carries packet routed traffic at lower cost than networks built as overlays to traditional circuit-switched telephone networks or coaxial cable networks.

Our IP Network is comprised of 3,579 on-net buildings and we serve 305 metropolitan markets in North America, Europe, South America, Oceania and Africa. Important strategic components of our IP Network include:

Our IP Network consists of owned optical fiber in the Sprint Network that is leased to our operating subsidiary, Cogent Communications LLC, on an inter-company basis and leased optical fiber on a long-term basis from carriers with large amounts of unused fiber to which we directly connect our own optical equipment and Internet routers to form our optical fiber national backbone. We have expanded our IP Network by acquiring owned and leased fiber through key acquisitions of financially distressed companies or their assets at a significant discount to their original cost. Due to our network design and acquisition strategy, we believe we are positioned to grow our revenue and increase our profitability with limited incremental capital expenditures.

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Inter-city IP Network. Our inter-city IP network consists of optical fiber, including transoceanic capacity circuits for undersea portions, connecting major cities in North America, Europe, South America, Asia, Oceania and Africa. Our inter-city IP network is comprised of strands of optical fiber on the approximately 19,000-mile inter-city portion of the Sprint Network that are leased on an inter-company basis and long-term, leased strands of optical fiber, typically two to four strands, out of the multiple fibers owned from various dark fiber vendors. We install the optical and electronic equipment necessary to amplify, regenerate, and route the optical signals along this network. We maintain, repair, upgrade and replace on the owned Sprint Network and we pay our dark fiber vendors our annual pro rata fees for these same services, often called “operation and maintenance” for the leased optical fiber. For both the owned and leased portions of our fiber network, we provide our own equipment maintenance.

Inter-city Optical Wave Network. Our inter-city Optical Wave Network consists of optical fiber connecting major cities in North America. Our inter-city Optical Wave Network is comprised primarily of the approximately 19,000-mile inter-city portion of the Sprint Network, augmented by long-term, leased strands of optical fiber, typically two to four strands, out of the multiple fibers owned from various dark fiber vendors. The portion of our Optical Wave Network that is owned by Cogent Fiber is leased to Cogent Communications LLC under a long-term IRU. We install the optical and electronic equipment necessary to amplify, regenerate, and route the optical signals along the Optical Wave Network. We maintain, repair, upgrade and replace on the owned Sprint Network and we pay our dark fiber vendors our annual pro rata fees for these same services, often called “operation and maintenance” for the leased optical fiber. For both the owned and leased portions of our Optical Wave Network, we provide our own equipment maintenance.

Intra-city IP Networks. In each metropolitan area in which we provide our high-speed on-net Internet access services, our backbone network is connected to one or more routers that are connected to one or more of our metropolitan optical networks. Our intra-city networks are a combination of the 1,704 route miles of owned Sprint Network and our IRU rights to use optical fiber that we obtained from carriers with optical fiber networks in those cities. These metropolitan networks consist of optical fiber that runs from the central router in a market into routers located in our on-net buildings. Our metropolitan fiber runs in a ring architecture, which provides redundancy so that if the fiber is cut, data in our IP network can still be transmitted to the central router by directing traffic in the opposite direction around the ring. The router in the building provides the connection to each of our on-net customers.

Intra-city Optical Wave Network. In each metropolitan area in which we provide our optical wavelength services, our inter-city optical wave network is connected to one or more devices that are connected to one or more of our metropolitan optical wave networks. Our intra-city networks are a combination of the 1,704 route miles of owned Sprint Network and our IRU rights to use optical fiber that we obtained from carriers with optical fiber networks in those cities. These metropolitan networks consist of optical fiber that run from the central OADM (optical add drop multiplexer) equipment in a market into our optical equipment located in our on-net buildings. In a specific metropolitan area, our intra-city optical wave network is distinct from our intra-city IP network in that area. The optical equipment in the building enables us to provide services to each of our optical wavelength service customers.

Off-Net Last Mile Connections. Within the cities where we offer our off-net Internet access services, we lease lit circuits from telecommunications carriers, primarily local telephone companies and cable TV companies, to provide the “last mile” connection to our customer’s premises. Typically, these circuits are aggregated at various locations in those cities onto higher-capacity leased circuits that ultimately connect the local aggregation router to our network.

Multi-Tenant Office Buildings. Our IP Network is directly connected to a portfolio of 1,881 MTOBs which provide us access to a highly attractive base of bandwidth intensive tenants. In MTOBs where we provide service to multiple tenants, we connect our routers to a cable typically containing 12 to 288 optical fiber strands that run from our equipment that is generally located in the basement of the building through the building riser to the customer location. Our service is initiated by connecting a fiber optic cable from our customer’s local area network in its suite to the infrastructure in the building riser giving our customer dedicated and secure access to our IP Network using an Ethernet connection. We believe that Ethernet is the lowest cost network connection technology and is almost universally used for the local area networks that businesses operate.

Carrier Neutral Data Centers. Our IP Network collocated in and can provide connectivity to customers in 1,715 CNDCs located in 1,511 buildings across our footprint. Our Optical Wave Network is collocated in and can provide optical wave services to customers in 1,068 wave enabled locations located in 927 buildings in North America. CNDCs are an integral component of the Internet and optical networking infrastructure as a place where content providers, application service providers, carriers and corporate customers locate their server and service infrastructure. CNDCs offer highly reliable, secure, cost effective and convenient space for these operators to access important services including connectivity, power, rack space and security all on a 24-hour basis in order to support their Internet and wavelength services. We believe we are connected to more CNDCs than any other IP transit provider or optical wavelength provider in North America, enabling us to offer greater coverage, more network configuration choices and increased reliability for our net-centric customers seeking either IP transit or optical wavelength services.

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Cogent Data Centers. We operate 100 data centers across the United States and in Europe. These facilities comprise over 1.9 million square feet of floor space with 182 MW of available power and are directly connected to our IP Network and, in North America connected to our Optical Wave Network. We also operate 87 Cogent edge data centers composed of 174 thousand square feet of floor space and 31 MW of available power. Each location is equipped with secure access, UPS, and backup generators. Our customers typically purchase bandwidth, rack space, and power within these facilities.

IP Internetworking. The Internet is an aggregation of interconnected networks. Larger ISPs exchange traffic and interconnect their networks by means of direct private connections referred to as private peering. We interconnect with the networks of our customers, which represent the majority of our interconnections and network traffic, through the sale of our transit services. We currently interconnect with 7,659 networks that pay us to exchange traffic as our customers. We supplement our customer network interconnections with settlement-free peering to non-customer tier one global ISPs. We have settlement-free private peering interconnections between our IP Network and 22 other major ISPs who are not our customers.

Tier 1 ISP Status. We directly connect with 7,659 total networks. As a result of the size and breadth of our customer base and the extensive footprint and scale of our IP Network, we are a Tier 1 ISP. We currently exchange traffic with 22 other Tier 1 ISPs on a settlement free basis. The remaining networks are customers whom we charge for Internet access. We believe our standing as a Tier 1 ISP provides us with a reputation for size, breadth and reliability. These relationships also reduce our cost of operating our IP Network versus non-Tier 1 ISP peer networks who must compensate other networks in order to deliver a significant portion of their traffic.

Peering agreements between ISPs enable them to exchange traffic. Without settlement-free peering agreements, each ISP backbone would have to buy Internet access from every other ISP backbone in order for its customer’s traffic to reach and be received from customers of other ISP backbones. We are considered a Tier 1 ISP with a large customer base, and, as a result, we have settlement-free peering arrangements with other providers with which we wish to peer. We do not purchase transit services or paid peering to reach any portion of the Internet. This allows us to exchange traffic with those ISPs without payment by either party. In such arrangements, each party exchanging traffic bears its own cost of delivering traffic to the point at which it is handed off to the other party. We do not treat our settlement-free peering arrangements as generating revenue or expense related to the traffic exchanged. We do not sell or purchase paid peering on our IP Network.

Network Management and Customer Care. Our primary network operations centers are located in Washington, D.C., Herndon, Virginia, Overland Park, Kansas and Madrid, Spain. These facilities provide continuous operational support for both of our networks. Our network operations centers are designed to immediately respond to any problems in either network. Our customer care call centers are located in Washington, D.C., Herndon, Virginia, Atlanta, Georgia, and Madrid, Spain. To ensure the quick replacement of faulty equipment in the intra-city and long-haul portions of both the IP Network and the Optical Wave Network, we have deployed field engineers across North America, Europe, South America and Asia. In addition, we have maintenance contracts with third-party vendors that specialize in maintaining optical and routed networks.

Field Services. Our field services organization includes over 340 employees globally. The department facilitates the deployment, maintenance, and support of products or services in our data centers, network points of presence (“PoPs”), CNDCs and MTOBs. This department is responsible for on-site activities, ranging from initial installations and configurations to troubleshooting, repairs, and upgrades. Field Services is also responsible for deployment, repair and reconfiguration of the approximately 1,704 intra-city route miles and 21,883 inter-city route miles of owned fiber optic cable comprising the Sprint Network.

Data Center Operations. Our data center operations organization includes 40 employees globally. This organization maintains our Cogent data centers and our Cogent edge data centers worldwide, including the facilities and other associated space, the power, HVAC and other systems necessary for data center function, the connectivity into the data centers, as well as assisting with the installation and maintenance of our equipment in our data centers. Where necessary, the department facilitates access and escort to potential customers as well as customers who are installing or maintaining their equipment collocated in our data centers. This department is also responsible for the conversion of former Sprint wire center facilities into Cogent data centers.

Our Customers

We offer our services to three sets of customers: corporate customers, which primarily include small and medium-sized businesses located in North America, enterprise customers, primarily from the Transaction, and net-centric customers, which include, content providers, applications service providers and access networks, comprised of ISPs, cable operators, mobile operators and phone companies located in North America, Europe, South America, Asia, Oceania and Africa.

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Our corporate customers primarily purchase our services from us on-net in MTOBs and CNDCs or off-net through other carriers’ “last mile” connections to those customer facilities in metropolitan markets in North America. This service enables these customers to access the Internet with a high-speed, bi-directional, symmetric circuit with a high degree of reliability and 100% access to that contractual capacity at all times. Depending upon the geographic breadth of our customers’ footprint and their communications requirements, we also sell these corporate customers private network services. Private network services provide connectivity on a point to point or point to multi-point basis. This service allows customers to connect geographically dispersed local area networks in a seamless manner. We primarily offer these corporate customers speeds ranging from 100 Mbps per second to 1 Gbps per second and in some cases up to 10 Gbps per second. The continued growth in demand for increased bandwidth has led to a rapid shift towards higher capacity circuits.

We have agreements with multiple national, international and regional carriers providing us “last mile” network access to over 6 million buildings. We believe these agreements broaden our addressable market for corporate dedicated internet access, VPN services and/or MPLS and enable us to better leverage the skills and capacity of our direct salesforce. As our sales of off-net services have increased, the pricing in our carrier agreements has commensurately decreased in light of our increased volume.

Our net-centric customers purchase our IP services in our 1,715 CNDCs as well as our 100 Cogent data centers and 87 Cogent edge data centers for a total of 1,902 data centers. We support these services in 305 metropolitan markets in 57 countries across the world. These bandwidth intensive organizations typically purchase circuits ranging from 10 Gbps up to 400 Gbps, designed to provide them high-speed, bi-directional, symmetric circuits with a high degree of reliability and 100% access to the contractual capacity at all times. In addition to contractual capacity, certain net-centric customers also purchase metered service that enables customers to pay for actual volume of bits delivered on a per bit per second basis. We also offer a burst product that allows net-centric customers to utilize capacity when they exceed their contractual capacity. The charge per bit for this burst capacity typically exceeds the rate for contractual services. Overall, we believe that, on a per megabit basis, our service offering is one of the lowest priced in the marketplace. We also offer colocation services in our data centers. This service offers Internet access combined with rack space and power in our facilities, allowing the customer to locate a server or other equipment at that location and connect to our Internet access service. We currently offer wavelength services in 1,068 locations, in the United States, Canada and Mexico.

Many of our net-centric customers also purchase our optical wavelength services. We offer optical wavelength services in 150 metropolitan markets in the United States, Canada and Mexico. We offer optical wavelength services in 10Gbps, 100Gbps and 400Gbps increments, and these offerings are designed to provide high-speed, dedicated point to point service.

We began to serve enterprise customers in connection with our acquisition of the Cogent Fiber Business. We define “enterprise” customers as large corporations (typically, Fortune 500 companies or companies with greater than $5 billion in annual revenue) running Wide Area Networks with several dozen to several hundred sites. Enterprise customers generally purchase dedicated internet access, MPLS based VPNs and other services in on-net and off-net locations. Our enterprise customers generally purchase our services on a price-per-location basis.

We offer lower prices for longer term and volume commitments. We emphasize the sale of our on-net services over our off-net services, as on-net services generate higher gross margins, and we believe we can offer faster installation and greater reliability with our on-net service offering.

Our People – Human Capital Management

We strive to become a leading employer in our industry by creating a workplace where employees have the tools and resources they need to hone their talents, advance in their careers and be rewarded for their hard work. We also seek to create a diverse workplace that is respectful of all employees, as we believe this is critical to fostering an employee culture that can deliver the best service in our industry to our customers. Our human capital objectives and initiatives are overseen by the Compensation Committee of our Board of Directors.

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Workforce. As of December 31, 2025, we had 1,833 employees located in 24 different countries in a variety of different roles. Approximately 87% of our employees are located in the United States, Canada and Mexico, 11% are located in Europe, 2% are located in Oceania and 0.2% in South America. As of December 31, 2025, 32% of our employees were quota-bearing sales representatives, 10% were in sales management or sales support roles and 58% were in operational or administrative functions. Unions represent 35 of our employees in France and 4 of our employees in Sweden. The employees of the Cogent Fiber Business that operate in Germany are governed by a works council. We believe that we have a satisfactory relationship with our employees.

Employee Hiring and Retention. We compete in an industry that is highly competitive for talent. We recruit the best people for the job without regard to gender, race, ethnicity or other protected traits, and it is our policy to comply fully with all domestic, foreign and local laws relating to discrimination in the workplace. Attracting, developing and retaining skilled people in sales, technical and other positions is crucial to executing our strategy and our ability to compete effectively. While we monitor overall employee retention, we focus in particular on sales representative retention with objective performance criteria, as our new sales and revenue growth are driven almost entirely by the sales generated by our direct sales force. As a complement to our sales representative retention metric, we also closely track the pace of hiring new sales representatives.

Our sales and marketing organization comprises 43% of our employees and our sales representatives comprise 32% of our employees. For the year ended December 31, 2025, we averaged a 6.4% monthly churn rate within our sales representatives. This churn was caused primarily by failures to meet sales performance goals as well as a tightening labor market creating increased competition when hiring. During the year ended December 31, 2025, we hired 414 new sales representatives and ended the year with 590 sales representatives, a net decrease of 60 sales representatives from our total sales representatives at December 31, 2024. Our ability to recruit and retain all of our employees depends on a number of factors, including professional development, compensation and benefits, and employee engagement.

A total of 942 employees joined the Company on the Closing Date in connection with the acquisition of the Cogent Fiber Business. From the Closing Date through December 31, 2025, 569 of these employees remained - we terminated 168 of these employees and 205 voluntarily resigned after a material reduction in their job duties. We paid approximately $28.6 million in severance costs, to qualifying employees, in accordance with the terms of the Purchase Agreement. We were fully reimbursed for these severance costs by the Seller.

Professional Development. We recognize the importance of retaining our employees, and we continually strive to improve the performance of our personnel to reduce turnover. To that end, we have invested heavily in professional development as a means for improving performance.

As part of our commitment to professional development of our sales personnel, we established a sales training and enablement department that provides both online and in-person training. Our 15 regional learning managers and management development trainers are located around the world and are available for intensive, in-person group training as well as individual training with sales representatives who may need extra assistance. For the year ended December 31, 2025, our ratio of sales representatives with less than 12 months of tenure to regional learning managers was 16.7 to 1.

Our training group includes two additional trainers dedicated exclusively to training sales management, one trainer dedicated exclusively to our field services team, one technical trainer, one on-line curriculum trainer, one trainer dedicated to network operations and customer service, one trainer for customer care and three project managers. Our trainers also conduct training in our offices to learn new skills and reinforce existing skills.

All sales personnel receive live, interactive training during their first month of employment, which focuses on developing both general and Cogent-specific sales skills. New sales personnel are also encouraged to, and rewarded for, completing a self-paced, online curriculum led by their manager during their first six months. Both recent and tenured sales personnel have access to online, on-demand training modules and the opportunity to obtain certification in specialized services. Our CEO addresses each new hire class in an interactive training session.

Compensation and Benefits. We are committed to rewarding, supporting, and developing our employees. To that end, we offer a comprehensive compensation program that includes market-competitive pay, stock options or restricted stock grants to all eligible employees, healthcare benefits, life insurance, a retirement savings plan, and paid time off and family leave.

Employee Engagement. To foster and reinforce a company culture where employee concerns are heard, our CEO conducts biweekly town hall meetings to respond to employee questions, which may be submitted anonymously. On alternate weeks, we conduct online town hall chats during which a rotating member of the executive team is available to answer questions from our

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employees. We believe these open and unfiltered channels of communication lead to honest feedback from our employees to our management team.

Health and Safety. The health and safety of our employees is of utmost important to us, and we take all necessary precautions to safeguard our employees. While nearly all of our employees work solely in office environments, for our field personnel, we provide safety gear as appropriate given employee job duties. We also provide training to our field personnel in a variety of workplace safety topics.

Sales and Marketing

Direct Sales. We exclusively employ a direct sales and marketing approach. As of December 31, 2025, our sales force included 777 full-time employees. As of December 31, 2025, our quota-bearing sales force includes 590 employees with 289 employees focused primarily on the corporate market, 289 employees focused primarily on the net-centric market and 12 employees focused primarily on the enterprise market. As of December 31, 2024, our sales force included 843 full-time employees. As of December 31, 2024, our quota-bearing sales force included 650 employees with 347 employees focused primarily on the corporate market, 288 employees focused primarily on the net-centric market and 15 employees focused primarily on the enterprise market. We encourage and incentivize all of members of our sales force to focus on the marketing and sale of our on-net services. To that end, our sales personnel work through direct contact with potential customers in, or intending to locate in, our on-net buildings. Through agreements with building owners and CNDC operators, we are able to initiate and maintain personal contact with our customers by staging various promotional and social events in our MTOBs and CNDCs. Sales personnel are compensated with a base salary plus quota-based commissions and incentives that is geared towards on-net services. We use a customer relationship management system to efficiently track sales activity levels and sales productivity.

Marketing. Because of our historical focus on a direct sales force that utilizes direct contact, we have not spent funds on television, radio or print advertising. We use a limited amount of web-based advertising. Our marketing efforts are designed to drive awareness of our products and services, to identify qualified leads through various direct marketing campaigns and to provide our sales force with product brochures, collateral materials, in building marketing events and relevant sales tools to improve the overall effectiveness of our sales organization. In addition, we conduct building events and public relations efforts focused on cultivating industry analyst and media relationships with the goal of securing media coverage and public recognition of our Internet access, colocation and private network services.

Competition

We face competition from incumbent telephone and cable companies, and facilities-based network operators, many of whom are much larger than us, have significantly greater financial resources, sales and marketing capabilities, better-established brand names and large, existing installed customer bases in the markets in which we compete. With respect to our optical wavelength service, our competitors have offered these services for many years and have established customer bases and processes and practices. We also face competition from new entrants to the communications services market. Many of these companies offer products and services that are similar to our products and services.

For the portions of our networks that are leased under IRUs from providers, some of which compete with us, we do not have title to the leased dark fiber. We rely on the owner of this leased fiber to maintain the fiber. We also depend on third-party providers, some of which compete with us, to provide intercity and intracity fiber as well as the lateral fiber connections required to add buildings to our network and to provide the local loop facilities for the provision of connections to our off-net customers.

We believe that competition is based on many factors, including price, transmission speed, ease of access and use, length of time to provision service, breadth of service availability, reliability of service, customer support, billing simplicity and brand recognition. While the Internet access speeds offered by traditional ISPs serving MTOBs using DSL or cable modems or fixed wireless typically do not match our on-net offerings in terms of throughput or quality, these slower services are usually priced lower than our offerings and thus provide competitive pressure on pricing, particularly for more price-sensitive customers. These and other downward pricing pressures, particularly in CNDCs, have diminished, and may further diminish, the competitive advantages that we have enjoyed as the result of the pricing of our services. Increasingly, traditional ISPs are upgrading their services using optical fiber and cable technology so that they can match our transmission speed and quality.

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The acquisition of the Sprint Network has provided additional competitive benefits. While the Sprint Network was built in the 1980s (the nation’s first transcontinental fiber network), we believe it is of high quality and superior to many newer networks.

Regulation

Our network services are subject to the regulatory authority of various agencies in the jurisdictions in which we operate. As a provider of only Internet access, private networks and optical wavelengths to businesses, regulation is generally not significant. This benefits us in that we have flexibility in offering our services and ease of entry into new markets. However, this level of regulation generally extends to our competitors, some of whom are incumbent telephone and cable companies with whom we need to interconnect and from whom we acquire circuits for our off-net services. The extent of regulation can change.

In January 2025, the U.S. Court of Appeals for the Sixth Circuit struck down the U.S. Federal Communications Commission (“FCC”) 2024 Net Neutrality Order. In the 2024 Net Neutrality Order, the FCC classified broadband as a telecommunications service. In setting aside the 2024 Net Neutrality Order, the Sixth Circuit held that broadband providers offer only an information service, and therefore the FCC lacked the statutory authority to impose net-neutrality policies through Title II of the Communications Act of 1934.

The decision by the Sixth Circuit does not apply to state laws protecting net neutrality. For example, the California Internet Consumer Protection and Net Neutrality Act, previously upheld by the U.S. Court of Appeals for the Ninth Circuit in 2022, is not impacted by the January 2025 ruling.

In all jurisdictions regulations continue to evolve. We also enter into new markets with their own regulations. The regulations with which we need to comply include obtaining the proper licenses to provide our services, data privacy, and interception of communications by law enforcement, blocking of websites, net-neutrality in California and other states in the U.S. and other regulations. We believe that we comply with all regulations in the jurisdictions in which we operate.

The laws related to Internet telecommunications are unsettled and there may be new legislation and court decisions that may affect our services and expose us to burdensome requirements and liabilities.

Our fiber network and associated facilities and equipment particularly in the United States are also subject to the regulatory authority of various agencies in which the network and facilities are located. These regulations include environmental, health and safety reporting and compliance. We have established a compliance team to manage this effort.

Available Information

We maintain an Internet website at www.cogentco.com. We make available through a link on our Internet website our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. The reports are also made available through a link to the Securities and Exchange Commission (SEC)’s Internet website at www.sec.gov. You can find these reports and request a copy of our Code of Ethics on our website at www.cogentco.com under the “About Cogent” tab at the “Investor Relations” link under “Reports” and under “Governance” at “Corporate Governance Documents.”

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