What changed in this filing

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Item 1. Financial Statements

2026-05-04 compared with 2025-11-06 · 185 added, 408 removed, 499 unchanged (54% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024

AS OF MARCH 31, 2026 AND DECEMBER 31, 2025

(IN THOUSANDS, EXCEPT SHARE DATA)

September 30,

Current assets:

3 unchanged sentences

Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of $ 8,695 and $ 10,401 , respectively

Due from T-Mobile, Transition Services Agreement

Prepaid expenses and other current assets

16 unchanged sentences

Accrued and other current liabilities

Due to T-Mobile – Transition Services Agreement

Current maturities, operating lease liabilities

1 unchanged sentence

Total current liabilities

Senior secured 2026 notes, net of unamortized debt costs of $ 375 and discount of $ 499

Senior secured 2032 notes, net of unamortized debt costs of $ 1,957 and $ 2,020 , respectively

Senior unsecured 2027 notes, net of unamortized debt costs of $ 1,034 and $ 1,236 , respectively, and discounts of $ 3,633 and $ 4,344 , respectively

Secured IPv4 notes, net of unamortized debt costs of $ 9,377 and $ 6,702 , respectively

Senior secured 2032 notes, net of unamortized debt costs of $ 2,082

Secured IPv4 notes, net of debt costs of $ 8,339 and $ 8,863 , respectively

Operating lease liabilities, net of current maturities

4 unchanged sentences

Commitments and contingencies:

Stockholders’ (deficit) equity:

Stockholders’ deficit:

Common stock, $ 0.001 par value;

2 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive (loss) income

Accumulated deficit

Total stockholders’ (deficit) equity

Total liabilities and stockholders’ (deficit) equity

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

The accompanying notes are an integral part of these condensed consolidated balance sheets.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

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Three Months Ended

September 30, 2025

September 30, 2024

Service revenue

Operating expenses:

Network operations (including $ 570 and $ 469 of equity-based compensation expense, respectively, exclusive of depreciation and amortization shown separately below)

Selling, general, and administrative (including $ 8,362 and $ 7,406 of equity-based compensation expense, respectively)

Depreciation and amortization

Total operating expenses

Gains on lease terminations and other

Operating loss

Interest expense, including change in valuation interest rate swap agreement

Interest income – IP Transit Services Agreement

Interest income – Purchase Agreement

Interest income (expense) and other, net

Loss before income taxes

Income tax benefit

Comprehensive loss:

Foreign currency translation adjustment

Comprehensive loss

Net loss per common share:

Basic net loss per common share

Diluted net loss per common share

Dividends declared per common share

Weighted-average common shares - basic

Weighted-average common shares - diluted

The accompanying notes are an integral part of these condensed consolidated statements.

COGENT COMMUNICATIONS HOLDINGS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Nine months Ended

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Service revenue

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Selling, general, and administrative (including $ 7,244 and $ 7,523 of equity-based compensation expense, respectively)

Acquisition costs – Sprint

Depreciation and amortization

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Interest expense, including change in valuation – interest rate swap agreement

Loss on debt extinguishment and redemption – 2026 notes

Gain on bargain purchase – Sprint

Interest income – IP Transit Services Agreement

Interest income – Purchase Agreement

Interest income and other, net

Interest income (loss) and other, net

Loss before income taxes

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025

(IN THOUSANDS)

Nine months Ended

September 30, 2025

September 30, 2024

Three Months Ended

March 31, 2026

March 31, 2025

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

2 unchanged sentences

Equity-based compensation expense (net of amounts capitalized)

Loss on debt extinguishment and redemption – 2026 notes

Gain on bargain purchase – Sprint

Gains on finance lease terminations and other

Gains on lease terminations and other

Deferred income taxes

2 unchanged sentences

Prepaid expenses and other current assets

Due to T-Mobile – Transition Services Agreement

Due from T-Mobile – Transition Services Agreement

Accounts payable, accrued liabilities and other long-term liabilities

Deposits and other assets

Net cash used in operating activities

Net cash provided by operating activities

Cash flows from investing activities:

Cash receipts - IP Transit Services Agreement – T-Mobile

Acquisition of Sprint – severance reimbursement

Purchases of property and equipment

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Dividends paid

Purchases of common stock

Net proceeds from issuance of senior unsecured 2027 notes - net of discount of $ 6.8 million and debt costs of $ 1.4 million

Net proceeds from issuance of secured IPv4 notes – net of debt costs of $ 4.0 million and $ 7.6 million, respectively

Net proceeds from issuance of senior secured 2032 notes - net of debt costs of $ 2.2 million

Debt extinguishment and redemption – 2026 notes

Proceeds from exercises of stock options

Settlement of finance lease – at a discount

Principal payments of finance lease obligations

Net cash provided by financing activities

Net cash used in financing activities

Effect of exchange rates changes on cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

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The Company is 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.

The Company’s network is specifically designed and optimized to transmit packet routed data.

The Company operates two networks:

an IP Network specifically designed and optimized to transmit packet routed data and a wavelength network designed to provide optical wave and transport services (“Optical Wave Network”).

The Company delivers its services primarily to businesses, large and small, communications service providers and other bandwidth-intensive organizations in 57 countries across North America, Europe, Asia, South America, Oceania and Africa.

The Company is a Delaware corporation and is headquartered in Washington, DC.

The Company offers on-net Internet access services exclusively through its own facilities, which run from its network to its customers’ premises.

The Company offers its on-net services to customers located in buildings that are physically connected to its network.

The Company offers on-net Internet access services exclusively through its own facilities, which run from its IP Network to its customers’ premises.

The Company offers its on-net services to customers located in buildings that are physically connected to its IP Network.

As a result, the Company is not dependent on local telephone companies or cable TV companies to serve its customers for its on-net Internet access and private network services.

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The Company continues to support but does not actively sell these non-core services.

In connection with the Company’s acquisition of Cogent Fiber LLC and pursuant to intercompany arrangements between Cogent Fiber LLC and the Company for use of wavelengths on the acquired Cogent Fiber LLC network, the Company began to provide optical wavelength services and optical transport services over a network that is generally independent of the Company’s legacy IP network.

Following the Company’s acquisition of Cogent Fiber LLC and pursuant to intercompany arrangements between Cogent Fiber LLC and the Company for use of the acquired Cogent Fiber LLC network, the Company began to provide optical wavelength services and optical transport services over its Optical Wave Network that is generally independent of the Company’s IP Network.

The Company is selling these wavelength services to its existing customers, customers of Cogent Fiber LLC and to new customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating network infrastructure.

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In connection with the acquisition of Cogent Fiber LLC, the Company expanded selling services to these larger “Enterprise” customers.

Acquisition of Sprint Communications

Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses , (“ASU 2024-03”), which requires a public business entity to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis.

The amendments are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

A public entity should apply the amendments either prospectively to financial statements issued for reporting periods after the effective date of the ASU or retrospectively to any or all prior periods presented in the financial statements.

The Company will not early adopt ASU 2024-03 and is in the process of evaluating the impact on its consolidated financial statements from the adoption of ASU 2024-03.

Acquisition of Cogent Fiber Business

On September 6, 2022, Cogent Infrastructure, Inc.

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During the third quarter of 2023, the Short-term Lease Payment was reduced by $ 4.8 million and in the first quarter of 2024, the Short-term Lease Payment was reduced by an additional $ 17.0 million, net of discount of $ 7.2 million.

Including the cumulative impact of these adjustments, the amortization of the discount resulted in interest income of $ 0.4 million and $ 0.4 million for the three months ended September 30, 2025 and 2024, respectively, and interest income of $ 1.3 million and $ 0.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Severance reimbursements

The Purchase Agreement also provided for reimbursement from the Seller to the Buyer for qualifying severance expenses incurred.

Total qualifying severance expenses were $ 28.6 million of which $ 12.3 million were recorded in the nine months ended September 30, 2024.

These severance payments ended in the second quarter of 2024.

Including the cumulative impact of these adjustments, the amortization of the discount resulted in interest income of $ 0.5 million and $ 0.4 million for the three months ended March 31, 2026 and 2025, respectively.

IP Transit Services Agreement

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Under the IP Transit Services Agreement.

TMUSA paid the Company $ 25.0 million and $ 25.0 million during the three months ended September 30, 2025 and 2024, respectively and paid the Company $ 75.0 million and $ 179.2 million during the nine months ended September 30, 2025 and 2024, respectively.

TMUSA paid the Company $ 25.0 million both during the three months ended March 31, 2026 and 2025.

The Company accounted for the Transaction as a business combination under ASC Topic 805 Business Combinations (“ASC 805”).

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Under ASC 805, the Company has concluded that the $ 700.0 million of payments to be made represent consideration received from T - Mobile to complete the acquisition of a distressed business.

The Company also evaluated whether the IP Transit Services Agreement was in the scope of Accounting Standards Update (“ASU”) No.

The Company also evaluated whether the IP Transit Services Agreement was in the scope of ASU No.

2014 - 09 Revenue from Contracts with Customers (“ASC 606”).

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The determination of the discount rate requires some judgment.

The amortization of the discount resulted in interest income of $ 3.9 million and $ 5.4 million during the three months ended September 30, 2025 and 2024, respectively, and $ 12.9 million and $ 18.7 million during the nine months ended September 30, 2025 and 2024, respectively.

Transition Services Agreement

On the Closing Date, the Buyer entered into a transition services agreement (the “TSA”) with the Seller, pursuant to which the Seller provides to the Buyer, and the Buyer provides to the Seller on an interim basis following the Closing Date, certain specified services (the “Transition Services”) to ensure an orderly transition following the separation of the Cogent Fiber Business from Sprint Communications.

The services provided by the Seller to the Buyer include, among others, information technology support, back office and finance, real estate and facilities, vendor and supply chain management, including the payment and processing of vendor invoices for the Company and human resources services.

The services provided by the Buyer to the Seller include, among others, information technology and network support, finance and back office and other wireless business support.

The Transition Services were generally intended to be provided for a period of up to two years following the Closing Date, although such period and could be extended for an additional one-year term by either party upon 30 days ’ prior written notice.

The fees for the Transition Services were calculated using either a per service monthly were or an hourly rate for the employees allocated to provide such services.

Any third-party costs incurred in providing the Transition Services were passed on to the party receiving such services at cost for the two-year period.

Amounts paid for the Cogent Fiber Business by T-Mobile were reimbursed at cost.

The TSA provides for customary indemnification and limits on liability.

Amounts billed under the TSA were due 30 days from receipt of the related invoice.

Amounts billed to the Company under the TSA were primarily for reimbursement at cost of payments to vendors of the Cogent Fiber Business until these vendors are fully transitioned to the Company.

The amounts due from the Seller were primarily reimbursements for severance costs related to Cogent Fiber Business employees and services provided by the Company for the Seller.

During the three and nine months ended September 30, 2024, the Company was billed $ 3.0 million and $ 26.3 million as due to the Seller under the TSA, respectively.

During the three and nine months ended September 30, 2024, the Company paid the Seller $ 3.7 million and $ 91.9 million, respectively, under the TSA.

During the three and nine months ended September 30, 2025, the amounts billed and paid by the Seller to the Company under the TSA were not material.

As of September 30, 2025, and December 31, 2024, the amounts owed by the Company to the Seller and the amounts owed by the Seller to the Company under the TSA were not material.

Other Services Provided to the Seller

In addition, on the Closing Date, the Buyer and TMUSA entered into a commercial agreement (the “Commercial Agreement”) for colocation and connectivity services, pursuant to which the Company will provide such services to TMUSA for a per service monthly fee plus certain third-party costs incurred in providing the services.

During the three and nine months ended September 30, 2025, the Company billed and recorded revenue due from the Seller of $ 0.4 million and $ 2.1 million, respectively, under the Commercial Agreement.

During the three and nine months ended September 30, 2024, the Company billed and recorded revenue due from the Seller of $ 4.1 million and $ 13.2 million, respectively, under the Commercial Agreement.

As of September 30, 2025, and December 31, 2024, TMUSA owed $ 0.6 million and $ 2.6 million, respectively, to the Company under the Commercial Agreement.

These amounts are recorded in accounts receivable.

Acquisition-Related Costs

In connection with the Transaction and negotiation of the Purchase Agreement, the Company incurred a total of $ 13.6 million of professional fees and other acquisition-related costs (not including severance costs) since the acquisition date.

Acquisition-related costs (not including severance costs) were $ 12.4 million and $ 21.4 million for the three and nine months ended September 30, 2024, respectively.

There were no acquisition-related costs incurred in the three or nine months ended September 30, 2025.

Consideration

The acquisition-date fair value of consideration received from the Transaction comprised of the following:

(In thousands)

Working capital payments made to the Seller, net of severance reimbursements (a)

Purchase Agreement payment to be received from the Seller, net of discount of $ 8,392 (b)

Amounts due from the Seller – IP Transit Services Agreement, net of discount of $ 79,610 (c)

Total to be received from the Seller

Total net consideration to be received from the Seller (d)

(a) Includes $ 61.1 million paid to the Seller on the Closing Date and $ 5.0 million paid in April 2024.

Additionally, includes an offsetting $ 28.6 million in total severance reimbursement payments received from the Seller recorded as measurement period adjustments of:

● $ 16.2 million during the three months ended December 31, 2023;

● $ 4.3 million during the three months ended March 31, 2024;

● $ 8.0 million during the three months ended June 30, 2024.

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(b) Under the Purchase Agreement, 50.0 % of the assumed short-term operating lease liabilities totaling $ 28.1 million are to be paid to the Company from the Seller in four equal installments in months 55 - 58 from the Closing Date which were recorded at their present value resulting in a discount of $ 8.4 million.

During the three months ended March 31, 2024, the Working Capital Adjustment, net of discount, was adjusted by $ 17.0 million to reflect the conclusion of the determination of amounts due from the Seller from the Short-term Lease Payment.

(c) The IP Transit Services Agreement payments totaling $ 700.0 million were recorded at their present value resulting in a discount of $ 79.6 million.

The $ 700.0 million is to be paid to the Company from the Seller in equal monthly payments of $ 29.2 million in months 1-12 and $ 8.3 million in months 13-54.

(d) Cash consideration was $ 1 .

Fair Value of Assets Acquired and Liabilities Assumed and Gain on Bargain Purchase

The Company accounted for the Transaction as a business combination under ASC Topic 805 Business Combination (“ASC 805”).

Under ASC 805, the identifiable assets acquired and liabilities assumed were recorded at their fair values as of the Closing Date.

Assigning fair market values to the assets acquired and liabilities assumed at the date of an acquisition requires the use of significant judgment regarding estimates and assumptions.

For the fair values of the assets acquired and liabilities assumed, the Company used the cost, income and market approaches, including market participant assumptions.

The fair value of the identifiable assets acquired (including amounts due under the IP Transit Services Agreement) were in excess of the liabilities assumed and the net consideration to be paid resulting in a gain on bargain purchase of $ 1.4 billion.

The Transaction is considered an asset purchase for income tax purposes.

The tax basis of the acquired business is the consideration paid ($ 1 ) plus the tax basis of certain liabilities assumed, with adjustments for cash acquired in excess of the purchase price.

Deferred income taxes were recorded based upon the difference between the book and tax basis of the acquired assets and assumed liabilities at the Company’s marginal effective income tax rate on the Closing Date.

During the three months ended March 31, 2024, the Company recorded a measurement period adjustment resulting in a reduction to the gain on bargain purchase of $ 5.5 million which included;

● A reduction to the Short-term Lease Receivable of $ 24.2 million ( $ 17.0 million net of discount);

● Additional reimbursed severance costs of $ 4.3 million;

● An increase to unfavorable lease liabilities of $ 6.0 million;

● A reduction to accrued liabilities of $ 11.3 million;

● A reduction to deferred income tax liabilities resulting from the adjustments noted above of $ 1.9 million.

During the three months ended June 30, 2024, the Company recorded measurement period adjustments resulting in an increase to the gain on bargain purchase of $ 27.7 million, which included;

● Additional reimbursed severance costs of $ 8.0 million;

● An adjustment to net deferred income tax liabilities of $ 19.7 million.

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The following table summarizes the fair values for each major class of assets acquired and liabilities assumed at the Closing Date.

The Company retained the services of certified valuation specialists to assist with assigning values to certain acquired assets and assumed liabilities.

Current assets:

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Total current assets

Total property and equipment

Right-of-use leased assets

IPv4 intangible asset

Other intangible assets

Deposits and other assets

Current liabilities:

Accounts payable

Accrued and other current liabilities

Current maturities, operating lease liabilities

Current maturities, finance lease liabilities

Total current liabilities

Operating lease liabilities, net of current maturities

Finance lease liabilities, net of current maturities

Deferred income tax liabilities

Other long-term liabilities

Total liabilities

Fair value of net assets acquired

Gain on bargain purchase

Fair value of net assets acquired

Total net consideration to be received from the Seller, net of discounts - see table above

Gain on bargain purchase

The amortization of the discount resulted in interest income of $ 3.1 million and $ 4.7 million during the three months ended March 31, 2026 and 2025, respectively.

Acquired Property & Equipment

The Company acquired property and equipment of $ 965.7 million.

This is primarily comprised of the legacy Sprint network and consisted of optical fiber, related equipment, and owned real estate that were valued using a combination of cost and market approaches.

In connection with the Transaction, the Company acquired property and equipment of $ 965.7 million.

This was primarily comprised of the legacy Sprint network and consisted of optical fiber, related equipment, and owned real estate that were valued using a combination of cost and market approaches.

Management intends to operate the acquired business;

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The Company followed its historical policies with respect to evaluating the renewal periods of the acquired leases and estimating the incremental borrowing rate.

During the third quarter of 2023, the Company recorded a measurement period adjustment to reclassify $ 24.9 million from right-of-use leased assets

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(net of related unfavorable lease liability amount) to finance lease assets (presented within property and equipment) and a measurement period adjustment to reclassify $ 160.9 million from operating lease liabilities to a finance lease liability.

The Company also evaluated the leases for unfavorable terms and recorded an adjustment for unfavorable market terms of $ 157.2 million that was valued using the income approach.

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The acquired customer relationships have an estimated useful life of nine years , and the estimated fair value was determined using a market-based income approach.

Amortization expense was $ 0.4 million and $ 1.3 million for the three and nine months ended September 30, 2025, respectively, and was $ 0.4 million and $ 1.3 million for the three and nine months ended September 30, 2024, respectively.

Future amortization expense of the customer relationships is $ 1.8 million per year for seven years .

Amortization expense was $ 0.4 million and $ 0.4 million for the three months ended March 31, 2026 and 2025, respectively.

Future amortization expense of the customer relationships is $ 1.8 million per year for six years .

The fair value measurement of the IPv4 addresses was based on recent auction prices and a factor to incorporate the uncertainty for how the market for IPv4 addresses will function in the future.

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Upon consideration of relevant factors, the Company concluded that it was not more-likely-than-not that impairment was present, and therefore, a quantitative impairment assessment was not required.

There has not been an impairment recorded for the Company’s IPv4 address asset.

Acquired Asset Retirement Obligations

In connection with the Transaction, the Company assumed $ 32.0 million of asset retirement obligations primarily related to restoration obligations for acquired leases that were valued using the income approach.

In accordance with ASC 410, the Company has not recorded an asset retirement obligation related to the removal of the acquired optical fiber because a settlement date for which to remove the fiber is indeterminable and therefore a reasonable estimation of fair value cannot be made.

Reassessment of Bargain Purchase Gain

Because the fair value of the identifiable assets acquired and liabilities assumed exceeded the fair value of the consideration transferred, the Company recorded a material bargain purchase gain of $ 1.4 billion.

Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed in accordance with ASC 805-30-25-4 and concluded that all acquired assets and assumed liabilities were recognized and that the valuation procedures and resulting measures were appropriate.

There was no impairment recorded during the period from May 1, 2023 through March 31, 2026.

Basis of presentation

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All inter-company accounts and activity have been eliminated.

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Use of estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of

the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results may differ from these estimates.

Financial instruments

At September 30, 2025 and December 31, 2024, the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses approximated fair value because of the short-term nature of these instruments.

At March 31, 2026 and December 31, 2025, the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses approximated fair value because of the short-term nature of these instruments.

The Company measures its cash equivalents and restricted cash at amortized cost, which approximates fair value based upon quoted market prices (Level 1).

Based upon recent trading prices (Level 2—market approach) at September 30, 2025,

Based upon recent trading prices (Level 2—market approach) at March 31, 2026:

● The fair value of the Company’s $ 450.0 million aggregate principal amount of 7.00 % Senior Unsecured Notes due 2027 (the “2027 Notes”) was $ 444.4 million;

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● The fair value of the Company’s $ 600.0 million aggregate principal amount of 6.50 % Senior Secured Notes due 2032 (the “2032 Notes”) was $ 516.0 million;

● The fair value of the Company’s $ 206.0 million aggregate principal amount of 7.924 % Existing IPv4 Notes (as defined below) was $ 213.0 million;

● The fair value of the Company’s $ 174.4 million aggregate principal amount of 6.646 % IPv4 New Notes (as defined below) was $ 174.5 million;

● The fair value of the Company’s Swap Agreement (as defined below) was $ 13.8 million.

Restricted cash and interest rate swap agreement

Restricted cash includes amounts held in segregated bank accounts by the Company’s clearing broker as margin in support of the Company’s Swap Agreement, as discussed in Note 3, and was $ 13.8 million as of September 30, 2025 and $ 22.3 million at December 31, 2024.

Restricted cash related to the Company’s IPv4 Notes, as discussed in Note 3, was $ 65.4 million as of September 30, 2025 and $ 7.1 million at December 31, 2024.

Additional cash may be further restricted to maintain the Company’s Swap Agreement as interest rates fluctuate and margin requirements change and under the provisions of the Company’s IPv4 Notes Indenture (as defined below).

● The fair value of the Company’s $ 380.4 million aggregate principal amount of secured IPv4 notes (the “IPv4 Notes”) was $ 389.8 million.

Restricted cash

The Swap Agreement was settled in February 2026.

Restricted cash related to the IPv4 Notes, as discussed in Note 3, was $ 39.0 million as of March 31, 2026 and $ 52.5 million as of December 31, 2025.

Additional cash may be further restricted under the provisions of the Company’s IPv4 Note indenture.

The Company does not use derivative financial instruments for trading purposes.

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The Company records certain excise taxes and surcharges on a gross basis and includes them in its revenue and network operations expense.

Excise taxes and surcharges billed to customers and recorded on a gross basis (as service revenue and network operations expense) were $ 19.2 million and $ 59.4 million for the three and nine months ended September 30, 2025, respectively, and were $ 19.8 million and $ 59.5 million for the three and nine months ended September 30, 2024, respectively.

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Excise taxes and surcharges billed to customers and recorded on a gross basis (as service revenue and network operations expense) were $ 19.5 million and $ 20.2 million for the three months ended March 31, 2026 and 2025, respectively.

Basic and diluted net loss per common share

Basic loss per share (“EPS”) excludes dilution for common stock equivalents and is computed by dividing net income or net loss available to common stockholders by the weighted-average number of common shares outstanding for the period.

Basic net income or net loss per share (“EPS”) excludes dilution for common stock equivalents and is computed by dividing net income or net loss available to common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of dilutive common stock equivalents.

Shares of restricted stock are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method.

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The following details the determination of diluted weighted-average shares:

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Weighted-average common shares - basic

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The following details unvested shares of restricted common stock as well as the anti-dilutive effects of stock options and restricted stock awards outstanding:

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Unvested shares of restricted common stock

2 unchanged sentences

Stockholders’ (Deficit) Equity

The following details the changes in stockholders’ (deficit) equity for the three months and nine months ended September 30, 2025 and 2024, respectively (in thousands except share data):

Comprehensive

Stockholders’

(Deficit) Equity

Balance at June 30, 2025

Forfeitures of shares granted to employees

Equity-based compensation

Foreign currency translation

Issuances of common stock

Exercises of options

Common stock purchases & retirement

Dividends paid

Balance at September 30, 2025

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Comprehensive

Stockholders’

Balance at June 30, 2024

Forfeitures of shares granted to employees

Equity-based compensation

Foreign currency translation

Issuances of common stock

Exercises of options

Dividends paid

Balance at September 30, 2024

The following details the changes in stockholders’ (deficit) equity for the three months ended March 31, 2026 and 2025, respectively (in thousands except share data):

Comprehensive

6 unchanged sentences

Exercises of options

Common stock purchases & retirement

Dividends paid

Balance at September 30, 2025

Balance at March 31, 2025

Comprehensive

Stockholders’

Income (Loss)

Equity (Deficit)

Balance at December 31, 2025

3 unchanged sentences

Issuances of common stock

Exercises of options

Common stock purchases & retirement

Dividends paid

Balance at September 30, 2024

Balance at March 31, 2026

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9 unchanged sentences

(in thousands)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Service revenue recognized from deferred revenue balance at beginning of period

4 unchanged sentences

Cash consideration received on transfers of dark fiber, including upfront installation fees, is recognized on a straight-line basis to service revenue over the term of the agreement.

Lease income is included in service revenue in the condensed consolidated statements of comprehensive loss.

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In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

Lease income is included in service revenue in the condensed consolidated statements of comprehensive (loss) income.

In February 2016, the FASB issued ASU No.

2016-02, Leases (“ASU 2016-02”).

4 unchanged sentences

(Amounts in thousands)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Finance lease cost

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Total lease costs

September 30, 2025

September 30, 2024

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March 31, 2026

March 31, 2025

Other lease information (amounts in thousands)

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Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments under the lease.

As of September 30, 2025, the Company had committed to additional IRU agreements totaling $ 160.2 million in future payments to be paid over periods of up to 20 years .

As of March 31, 2026, the Company had committed to additional IRU agreements totaling $ 105.5 million in future payments to be paid over periods of up to 20 years .

These obligations begin when the related fiber is accepted, which is generally expected to occur in the next 12 months.

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The future minimum payments under the Company’s operating lease and finance lease agreements are as follows (in thousands):

For the Twelve Months Ending September 30,

For the Twelve Months Ending March 31

Total minimum lease obligations

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Lease obligations, net of current maturities

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Allowance for credit losses

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Allowance for credit losses (deducted from accounts receivable) (in thousands)

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Three months ended March 31, 2026

Three months ended March 31, 2025

(in thousands)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Net bad debt expense

March 31, 2026

March 31, 2025

Bad debt expense

Bad debt recoveries

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , (“ASU 2023-09”) which requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation disaggregated into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold as defined within the standard.

In addition, all entities will be required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

The amendments in ASU 2023-09 are effective for public business entities for annual periods beginning after December 15, 2024, and early adoption is permitted.

The Company will not early adopt ASU 2023-09 and does not expect a material impact on its consolidated financial statements from the adoption of ASU 2023-09.

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In November 2024, the FASB issued ASU No.

The amendments are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

The Company will not early adopt ASU 2024-03 and is in the process of evaluating the impact on its consolidated financial statements from the adoption of ASU 2024-03.

Asset Retirement Obligations

In accordance with ASC 410, the Company has not recorded an asset retirement obligation related to restoration obligations for the removal of optical fiber because a settlement date for which to remove the fiber is indeterminable and therefore a reasonable estimation of fair value cannot be made.

Property and equipment:

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(in thousands)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Depreciation and amortization expense

Capitalized compensation cost

IRU Finance Lease Termination – Discount and Gain on Lease Termination

In June 2024, the Company elected to exercise a contractual option to prepay in full at a 12.0 % discounted rate an IRU finance lease agreement (the “IRU Lease”) acquired in the Transaction for $ 114.6 million.

At the payment date, the present value of the IRU finance lease liability was $ 117.9 million and the remaining 31 monthly principal payments of $ 4.2 million each totaled $ 130.2 million.

The prepayment resulted in a gain on lease termination of $ 3.3 million related to the difference between the book value of $ 117.9 million and the cash payment of $ 114.6 million.

The Company is continuing to use the related IRU asset.

Long-term debt:

As of September 30, 2025, the Company had the following long-term debt obligations outstanding;

● $ 600.0 million aggregate principal amount of 2032 Notes,

● $ 300.0 million aggregate principal amount of 2027 Mirror Notes,

● $ 450.0 million aggregate principal amount of 2027 Notes,

As of March 31, 2026 and December 31, 2025, the Company had the following long-term debt obligations outstanding;

● $ 600.0 million aggregate principal amount of secured 2032 Notes,

● $ 300.0 million aggregate principal amount of unsecured 2027 Mirror Notes,

● $ 450.0 million aggregate principal amount of unsecured 2027 Notes,

● $ 206.0 million aggregate principal amount of secured IPv4 notes issued in May 2024 (the “Existing IPv4 Notes”) and

● $ 174.4 million aggregate principal amount of secured IPv4 notes issued in April 2025 (the “New IPv4 Notes” and, together with the Existing IPv4 Notes, the “IPv4 Notes”).

o The 2032 Notes were issued in June 2025, are due on July 1, 2032, and bear interest at a rate of 6.50 % per year.

Interest on the 2032 Notes is paid semi-annually on January 1 and July 1 of each year beginning on January 1, 2026.

◾ The 2032 Notes were issued in connection with the redemption of the Company’s $ 500.0 million 3.50 % Senior Secured Notes due to mature in May 2026 (the “Existing Secured 2026 Notes”), that were due on May 1, 2026, and bore interest at a rate of 3.50 % per year.

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o The Existing IPv4 Notes were issued for an aggregate principal amount of $ 206.0 million and bear interest at a rate of 7.924 % , with an anticipated term ending in May 2029 (such anticipated repayment date, the “ARD”).

o The New IPv4 Notes were issued for an aggregate principal amount of $ 174.4 million and bear interest at a rate of 6.646 % , with an ARD of April 2030.

Interest on the IPv4 Notes is paid monthly.

o The 2027 Mirror Notes were issued for an aggregate principal amount of $ 300.0 million in June 2024, are due on June 15, 2027 , and bear interest at a rate of 7.00 % per year.

o The 2027 Notes were issued for an aggregate principal amount of $ 450.0 million in June 2022, are due on June 15, 2027 , and bear interest at a rate of 7.00 % per year.

o Interest on the 2027 Mirror Notes and the 2027 Notes is paid semi-annually on June 15 and December 15 of each year.

Issuance of $ 600.0 million principal amount of 2032 Notes and redemption of the Existing Secured 2026 Notes

Issuance of $ 600.0 million principal amount of 2032 Notes and redemption of the 2026 Notes

On June 17, 2025 (the “2032 Notes Closing Date”), Group and Cogent Finance, Inc.

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persons in transactions outside the United States in compliance with Regulation S under the Securities Act.

The 2032 Notes are due on July 1, 2032, and bear interest at a rate of 6.50 % per year.

Interest on the 2032 Notes is paid semi - annually on January 1 and July 1 of each year beginning on January 1, 2026.

The 2032 Notes were issued in connection with the redemption of the Company’s $ 500.0 million 3.50 % Senior Secured Notes due to mature in May 2026 (the “2026 Notes”).

The net proceeds from the offering were $ 597.8 million after deducting offering expenses.

On June 4, 2025, the Issuers issued a notice of conditional full redemption to holders of all of the then-outstanding Existing Secured 2026 Notes, specifying the 2032 Notes Closing Date as the redemption date.

On the 2032 Notes Closing Date, Group used $ 507.3 million of the net proceeds from the offering to redeem in full, and satisfy and discharge the Issuers’ obligations under, the Existing Secured 2026 Notes.

The obligations under the Existing Secured 2026 Notes included the $ 500.0 million principal amount, a $ 5.0 million make-whole payment and $ 2.2 million of accrued interest.

As a result of the redemption of the Existing Secured 2026 Notes, the Company incurred a loss on debt extinguishment and redemption of $ 5.6 million.

On June 4, 2025, the Issuers issued a notice of conditional full redemption to holders of all of the then-outstanding 2026 Notes, specifying the 2032 Notes Closing Date as the redemption date.

On the 2032 Notes Closing Date, Group used $ 507.3 million of the net proceeds from the offering to redeem in full, and satisfy and discharge the Issuers’ obligations under, the 2026 Notes.

The obligations under the 2026 Notes included the $ 500.0 million principal amount, a $ 5.0 million make-whole payment and $ 2.2 million of accrued interest.

As a result of the redemption of the 2026 Notes, the Company incurred a loss on debt extinguishment and redemption of $ 5.6 million.

Group expects to use the remainder of the net proceeds for general corporate purposes and/or to make special or recurring dividends to the Company.

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The 2032 Notes and the 2032 Notes Subsidiary Guarantees are effectively senior to any of the Issuers’ and the Subsidiary Guarantors’ existing and future senior unsecured indebtedness, including the 2027 Notes and 2027 Mirror Notes (together, the “Existing Unsecured 2027 Notes”), and future indebtedness secured by liens on the collateral securing the 2032 Notes that are junior to the liens on the collateral securing the 2032 Notes, in each case, to the extent of the value of the collateral securing the 2032 Notes.

Without giving effect to collateral arrangements, the 2032 Notes and the 2032 Notes Subsidiary Guarantees rank pari passu in right of payment with all of the Issuers’ and the 2032 Notes Subsidiary Guarantors’ existing and future senior indebtedness that is not subordinated in right of payment to the 2032 Notes or the 2032 Notes Subsidiary Guarantees, including the Existing Unsecured 2027 Notes, and are effectively subordinated to any of the Issuers’ and the 2032 Notes Subsidiary Guarantors’ indebtedness that is secured by assets that do not constitute collateral

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or that is secured by liens on the collateral securing the 2032 Notes that are senior to the liens securing the 2032 Notes, in each case, to the extent of the value of the collateral securing such indebtedness.

In addition, the 2032 Notes and the 2032 Notes Subsidiary Guarantees rank contractually senior in right of payment to all of the Issuers’ and the 2032 Notes Subsidiary Guarantors’ subordinated indebtedness and are structurally subordinated to any existing and future indebtedness and other liabilities of Group’s non-guarantor subsidiaries (other than the Co-Issuer).

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The Company’s guarantee is structurally subordinated to any existing and future indebtedness and other liabilities of the Company’s subsidiaries that are neither the Issuers nor a 2032 Notes Subsidiary Guarantor, including the secured IPv4 Notes.

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The 2032 Notes bear interest at a rate of 6.50 % per annum.

13 unchanged sentences

● create liens;

● consolidate, merge, sell or otherwise dispose of all or substantially all of the properties and assets of Cogent Group and its restricted subsidiaries taken as a whole;

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● consolidate, merge, sell or otherwise dispose of all or substantially all of the properties and assets of Group and its restricted subsidiaries taken as a whole;

● incur restrictions on the ability of a restricted subsidiary to pay dividends or make other payments;

4 unchanged sentences

Upon suspension of the covenants, the 2032 Notes Guarantees and the related liens on the collateral, as applicable, will be released until such time as the covenants are no longer suspended.

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The principal amount of the 2032 Notes would become immediately due and payable upon the occurrence of certain bankruptcy or insolvency events involving Group, the Co-Issuer or certain of Group’s subsidiaries, and may be declared immediately due and payable by the trustee or the holders of at least 25.0 % of the aggregate principal amount of the then-outstanding 2032 Notes upon the occurrence of certain events of default under the Indenture.

7 unchanged sentences

and (vii) certain defaults with respect to the security documentation related to the 2032 Notes and the collateral securing the 2032 Notes and the Guarantees of the Subsidiary Guarantors.

Issuance of $ 174.4 million principal amount of New IPv4 Notes

On April 11, 2025 (the “New IPv4 Notes Closing Date”), Cogent IPv4 LLC (the “IPv4 Issuer”), a special-purpose, bankruptcy remote, indirect wholly owned subsidiary of the Company, 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.

Issuance of $ 174.4 million of New IPv4 Notes

On April 11, 2025 (the “New IPv4 Notes Closing Date”), Cogent IPv4 LLC (the “IPv4 Issuer”), a special-purpose, bankruptcy remote, indirect wholly owned subsidiary of the Company, issued $ 174.4 million aggregate principal amount of secured IPv4 address revenue notes, Series 2025-1 Class A-2 (collectively, the “New IPv4 Notes”), with an anticipated repayment date (“ARD”) in April 2030, in an offering exempt from registration under the Securities Act.

The New IPv4 Notes bear interest at a rate of 6.646 %, which is paid monthly.

The net proceeds of the New IPv4 Notes, after offering expenses, were $ 170.5 million.

At the New IPv4 Notes Closing Date, $ 72.6 million of the net proceeds were restricted, and $ 97.9 million of the net proceeds were unrestricted.

The restricted cash proceeds become available based upon improvements in the monthly leverage ratio and debt service coverage ratio (both as defined in the IPv4 Base Indenture (as defined below).

During the three months ended September 30, 2025 the restriction on $ 14.1 million of restricted cash was released primarily due to an improvement in the Company’s monthly leverage and debt service coverage ratios under the IPv4 base Indenture.

The restricted cash proceeds become available based upon improvements in the monthly leverage ratio and debt service coverage ratio (both as defined in the IPv4 Notes Indenture (as defined below).

During the three months ended March 31, 2026 and year ended December 31, 2025 the restriction on $ 13.5 million and $ 26.9 million, respectively, of restricted cash was released primarily due to an improvement in the Company’s monthly leverage and debt service coverage ratios under the IPv4 base Indenture.

Under the Terms of the IPv4 Notes Indenture, the Company has until October 2026 to satisfy the performance metrics and unlock the remaining restricted funds.

If there are any remaining restricted funds at that time, they will be used to pay principal on the New IPv4 Notes.

The New IPv4 Notes were issued pursuant to the IPv4 Base Indenture, dated as of May 2, 2024, as supplemented by the Series 2025-1 Supplement thereto, dated as of the New IPv4 Notes Closing Date (the “Series 2025-1 Supplement”), by and between the IPv4 Issuer and the IPv4 Trustee (as defined below).

6 unchanged sentences

plus (B) 5.0 %;

plus (C) the post-anticipated repayment date note spread of 3.00 % applicable to such New IPv4 Notes.

plus (C) the post ARD note spread of 3.00 % applicable to such New IPv4 Notes.

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Accordingly, on the New IPv4 Notes Closing Date, prior to the issuance of the New IPv4 Notes, the IPv4 Issuer entered into a second amendment to the IPv4 Base Indenture (the “Second Amendment”) with the IPv4 Trustee giving effect to the Amendments.

Issuance of $ 206.0 million principal amount of Existing IPv4 Notes

On May 2, 2024, the IPv4 Issuer issued $ 206.0 million aggregate principal amount of 7.924 % IPv4 Notes (the “Existing IPv4 Notes”), with an anticipated repayment date in May 2029 in an offering exempt from registration under the Securities Act.

Issuance of $ 206.0 million of Existing IPv4 Notes

On May 2, 2024, the IPv4 Issuer issued $ 206.0 million aggregate principal amount of IPv4 Notes (the “Existing IPv4 Notes”), with an ARD in May 2029 in an offering exempt from registration under the Securities Act.

The net proceeds from the offering, after debt offering costs, were $ 198.4 million.

The Existing IPv4 Notes bear interest at a rate of 7.924 % which is paid monthly.

The Existing IPv4 Notes were issued pursuant to an indenture, dated as of May 2, 2024 (the “IPv4 Base Indenture”), as supplemented by the Series 2024-1 Supplement thereto, dated as of May 2, 2024 (the “Series 2024-1 Supplement”), in each case entered into by and between the IPv4 Issuer and Wilmington Trust, National Association, as the trustee for the IPv4 Notes (the “IPv4 Trustee”).

8 unchanged sentences

plus (B) 5.0 %;

plus (C) the post-anticipated repayment date note spread of 3.400 % applicable to such Existing IPv4 Note.

plus (C) the post ARD note spread of 3.400 % applicable to such Existing IPv4 Notes.

IPv4 Notes collateral, guaranty, covenants and restrictions

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Amounts received by the IPv4 Issuer as collections on IPv4 Address Assets before the monthly reconciliation is completed are held in a segregated account by the IPv4 Trustee as collateral for the IPv4 Notes.

After the IPv4 Trustee pays the monthly interest and other IPv4 Address Assets related costs, including monthly fees paid to the Manager for its services, the residual cash is paid to the Company and is unrestricted.

Issuance of $ 300.0 million principal amount of 2027 Mirror Notes

On June 11, 2024, the Issuers completed an offering of $ 300.0 million aggregate principal amount of the 2027 Mirror Notes for issuance in a private placement not registered under the Securities Act.

After the IPv4 Trustee pays the monthly interest and other IPv4 Address Assets related costs, including monthly fees paid to the Manager for its services, any residual cash is paid to the Company and becomes unrestricted.

Issuance of $ 300.0 million of 2027 Mirror Notes

On June 11, 2024, the Issuers completed an offering of $ 300.0 million aggregate principal amount of its 2027 Mirror Notes for issuance in a private placement not registered under the Securities Act.

The 2027 Mirror Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers in an unregistered offering pursuant to Rule 144A under the Securities Act and to certain non-U.S.

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The net proceeds from the offering were approximately $ 291.9 million after deducting the discount and offering expenses.

Group used $ 114.6 million of the net proceeds from the offering to exercise a contractual option to prepay in full the IRU Lease, at a discount.

Group expects to use the remainder of the net proceeds for general corporate purposes and/or to make special or recurring dividends to the Company.

The 2027 Mirror Notes were issued pursuant to, and are governed by, an indenture, dated June 11, 2024 (the “2027 Mirror Notes Indenture”), among the Issuers, the Company, the other guarantors named therein and Wilmington Trust, National Association, as trustee (the “2027 Mirror Notes Trustee”).

The 2027 Mirror Notes are jointly and severally guaranteed (the “2027 Mirror Notes Guarantees”) on a senior unsecured basis by each of Group’s existing and future material domestic subsidiaries (other than the Co-Issuer), subject to certain exceptions (collectively, the “2027 Mirror Notes Subsidiary Guarantors”), and by the Company (together with the 2027 Mirror Notes Subsidiary Guarantors, the “2027 Mirror Notes Guarantors”).

Group used $ 114.6 million of the net proceeds from the offering to exercise a contractual option to prepay in full the IRU lease noted above, at a discount.

Interest on the 2027 Mirror Notes accrues at 7.00 % and is paid semi - annually in arrears on June 15 and December 15 of each year.

Holdings provided a guarantee of the 2027 Mirror Notes, but Holdings is not subject to the covenants under the indenture.

The 2027 Mirror Notes are jointly and severally guaranteed (the “Guarantees”) on a senior unsecured basis by each of Group’s existing and future material domestic subsidiaries (other than the Co-Issuer), subject to certain exceptions (collectively, the “Subsidiary Guarantors”), and by the Company (together with the Subsidiary Guarantors, the “Guarantors”).

However, the Company is not subject to the covenants under the 2027 Mirror Notes Indenture.

Under certain circumstances, the 2027 Mirror Notes Guarantors may be released from these 2027 Mirror Notes Guarantees without the consent of the holders of the 2027 Mirror Notes.

Under certain circumstances, the Guarantors may be released from these Guarantees without the consent of the holders of the 2027 Mirror Notes.

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The 2027 Mirror Notes and the 2027 Mirror Notes Guarantees are the Issuers’ and the 2027 Mirror Notes Guarantors’ senior unsecured obligations.

The 2027 Mirror Notes and the 2027 Mirror Notes Guarantees are effectively subordinated to all of the Issuers’ and the 2027 Mirror Notes Guarantors’ existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, and are structurally subordinated to all indebtedness and other liabilities of subsidiaries that are not 2027 Mirror Notes Subsidiary Guarantors.

Without giving effect to collateral arrangements, the 2027 Mirror Notes and the 2027 Mirror Notes Guarantees rank pari passu in right of payment with all of the Issuers’ and the 2027 Mirror Notes Guarantors’ existing and future senior indebtedness, including the 2027 Notes.

The 2027 Mirror Notes and the 2027 Mirror Notes Guarantees rank contractually senior in right of payment to all of the Issuers’ and the 2027 Mirror Notes Guarantors’ subordinated indebtedness and are structurally subordinated to any existing and future indebtedness and other liabilities of the Issuers’ non-guarantor subsidiaries.

The 2027 Mirror Notes bear interest at a rate of 7.00 % per annum.

Interest began to accrue on the 2027 Mirror Notes on June 11, 2024 and will be paid semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2024.

Unless earlier redeemed or repurchased, the 2027 Mirror Notes will mature on June 15, 2027 .

The 2027 Mirror Notes and the Guarantees are the Issuers’ and the Guarantors’ senior unsecured obligations.

The 2027 Mirror Notes and the Guarantees are effectively subordinated to all of the Issuers’ and the Guarantors’ existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, and are structurally subordinated to all indebtedness and other liabilities of subsidiaries that are not Subsidiary Guarantors.

Without giving effect to collateral arrangements, the 2027 Mirror Notes and the Guarantees rank pari passu in right of payment with all of the Issuers’ and the Guarantors’ existing and future senior indebtedness, including the Issuers’ 2026 Notes and the 2027 Notes.

The 2027 Mirror Notes and the Guarantees rank contractually senior in right of payment to all of the Issuers’ and the Guarantors’ subordinated indebtedness and are structurally subordinated to any existing and future indebtedness and other liabilities of the Issuers’ non-guarantor subsidiaries.

After June 15, 2024, the Issuers may redeem the 2027 Mirror Notes, in whole or in part, at a redemption price ranging from 103.5 % of the aggregate principal amount of the 2027 Mirror Notes redeemed to par (depending on the year), in each case, as set forth in the 2027 Mirror Notes Indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

1 unchanged sentence

Additionally, if Group or any of its restricted subsidiaries sells assets and does not apply the proceeds from such sale in a certain manner or certain other events have not occurred, under certain circumstances, the Issuers will be required to use the net proceeds to make an offer to purchase the 2027 Mirror Notes at an offer price in cash equal to 100 % of the principal amount of the 2027 Mirror Notes, plus accrued and unpaid interest, if any, to, but not including, the repurchase date.

In connection with any offer to purchase all or any of the 2027 Mirror Notes (including a change of control offer, asset sale, offer or any tender offer), if holders of not less than 90 % of the aggregate principal amount of the outstanding 2027 Mirror Notes validly tender their 2027 Mirror Notes, the Issuers or a third party are entitled to redeem any remaining 2027 Mirror Notes at the price paid to each holder.

In connection with any offer to purchase all or any of the 2027 Mirror Notes (including a change of control offer, asset sale, offer or any tender offer), if holders of no less than 90 % of the aggregate principal amount of the outstanding 2027 Mirror Notes validly tender their 2027 Mirror Notes, the Issuers or a third party are entitled to redeem any remaining 2027 Mirror Notes at the price paid to each holder.

The 2027 Mirror Notes Indenture includes covenants that restrict Group and its restricted subsidiaries’ (including the Co-Issuer’s) ability to, among other things:

6 unchanged sentences

incur restrictions on the ability of a subsidiary to pay dividends or make other payments;

and enter into transactions with affiliates.

or enter into transactions with affiliates.

The covenants provide for certain exceptions to these restrictions, and the Company is not subject to the covenants under the 2027 Mirror Notes Indenture.

1 unchanged sentence

and S&P Global Ratings and so long as no default or event of default under the 2027 Mirror Notes Indenture has occurred and is continuing.

Upon suspension of the covenants, the 2027 Mirror Notes Guarantees will be released until such time as the covenants are no longer suspended.

The principal amount of the 2027 Mirror Notes would become immediately due and payable upon the occurrence of certain bankruptcy or insolvency events involving Group, the Co-Issuer or certain of Group’s subsidiaries, and may be declared immediately due and payable by the 2027 Mirror Notes Trustee or the holders of at least 25.0 % of the aggregate principal amount of the then-outstanding 2027 Mirror Notes upon the occurrence of certain events of default under the 2027 Mirror Notes Indenture.

Upon suspension of the covenants, the Guarantees will be released until such time as the covenants are no longer suspended.

The principal amount of the 2027 Mirror Notes would become immediately due and payable upon the occurrence of certain bankruptcy or insolvency events involving Group, the Co-Issuer or certain of Group’s subsidiaries, and may be declared immediately due and payable by the 2027 Notes Trustee or the holders of at least 25 % of the aggregate principal amount of the then-outstanding 2027 Mirror Notes upon the occurrence of certain events of default under the 2027 Mirror Notes Indenture.

Events of default include the following with respect to the Issuers and Group’s significant subsidiaries:

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(iv) failure to pay certain material judgments;

(v) a 2027 Mirror Notes Guarantee being held unenforceable or invalid or ceasing for any reason to be in full force and effect or a 2027 Mirror Notes Guarantor denying or disaffirming its obligations under its 2027 Mirror Notes Guarantee;

(v) a Guarantee being held unenforceable or invalid or ceasing for any reason to be in full force and effect or a Guarantor denying or disaffirming its obligations under its Guarantee;

and (vi) certain events of bankruptcy or insolvency.

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Issuance of $ 450.0 million of 2027 Notes

On June 22, 2022 (the “2027 Notes Closing Date”), Group completed its offering of $ 450.0 million aggregate principal amount of its 2027 Notes for issuance in a private placement not registered under the Securities Act of 1933, as amended (the “Securities Act”).

The 2027 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers in an unregistered offering pursuant to Rule 144A under the Securities Act and to certain non-U.S.

persons in transactions outside the United States in compliance with Regulation S under the Securities Act.

The 2027 Notes were issued pursuant to, and are governed by, an indenture (the “2027 Notes Indenture”), dated the 2027 Notes Closing Date by and among Group, Holdings, the other guarantors named therein and the trustee.

The 2027 Notes are jointly and severally guaranteed on a senior unsecured basis by each of the Company’s existing and future material domestic subsidiaries, subject to certain exceptions, and by the Company.

Under certain circumstances, the Guarantors may be released from these Guarantees without the consent of the holders of the 2027 Notes.

The net proceeds from the 2027 Notes offering were $ 446.0 million after deducting the $ 2.7 million discount and $ 1.3 million of offering expenses.

Interest on the 2027 Notes accrues at 7.00 % and is paid semi-annually in arrears on June 15 and December 15 of each year.

Holdings provided a guarantee of the 2027 Notes, but Holdings is not subject to the covenants under the indenture.

Unless earlier redeemed or repurchased, the 2027 Notes will mature on June 15, 2027.

After June 15, 2024, Group may redeem the 2027 Notes, in whole or in part, at a redemption price ranging from 103.5 % of the aggregate principal amount of the 2027 Notes redeemed to par (depending on the year), in each case, as set forth in the 2027 Notes Indenture, plus accrued and unpaid interest, if any.

Issuance of $ 500.0 million of 2026 Notes

On May 7, 2021 (the “2026 Notes Closing Date”), Group completed an offering of $ 500.0 million aggregate principal amount of its 2026 Notes for issuance in a private placement exempt from registration under the Securities Act.

The 2026 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S.

persons in transactions outside the United States in compliance with Regulation S under the Securities Act.

The 2026 Notes were issued pursuant to, and are governed by, an indenture (the “2026 Notes Indenture”), dated the 2026 Notes Closing Date by and among Group, Holdings, the other guarantors named therein, the trustee and the collateral agent.

The 2026 Notes are guaranteed on a senior secured basis, jointly and severally, by Group’s material domestic subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”).

In addition, the 2026 Notes were guaranteed on a senior unsecured basis by Holdings (together with the Subsidiary Guarantors, the “Guarantors”).

The net proceeds from the 2026 Notes offering were $ 496.9 million after deducting the $ 1.8 million discount and $ 1.3 million of offering expenses.

Unless earlier redeemed or repurchased, the 2026 Notes were scheduled to mature on May 1, 2026.

The 2026 Notes were extinguished and redeemed with the issuance of the 2032 Notes in June 2025.

Limitations under the Indentures

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Under the Indentures, Group and its restricted subsidiaries can pay dividends, make other distributions, make certain investments and make other restricted payments under certain circumstances, including, with respect to its restricted payments, if, after giving pro forma effect to such restricted payment, Group could still incur $ 1 of “Ratio Debt,” as defined (i.e., either its consolidated leverage ratio is less than 6.0 to 1.0 or its fixed charge coverage ratio is 2.0 to 1.0 or greater).

As of September 30, 2025, and under the more restrictive leverage ratio definitions under the 2027 Notes Indenture and the 2027 Mirror Notes Indenture (the “2027 Notes Indentures”),

● Group’s consolidated leverage ratio was below 6.0 to 1.00 ,

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As of March 31, 2026, and under the more restrictive leverage ratio definitions under the 2027 Notes Indenture and the 2027 Mirror Notes Indenture (the “2027 Notes Indentures”),

● Group’s consolidated leverage ratio was above 6.0 to 1.00 ,

● Group’s consolidated secured leverage ratio was below 4.0 , and

● Group’s fixed charge coverage ratio was above 2.0 .

As of September 30, 2025, and under the leverage ratio definitions under the 2032 Notes Indenture, (the definition of consolidated cash flow under Group’s 2032 Notes Indenture includes cash payments from TMUSA under the IP Transit Services Agreement for the reference period, as defined.)

As of March 31, 2026, and under the leverage ratio definitions under the 2032 Notes Indenture, (the definition of consolidated cash flow under Group’s 2032 Notes Indenture includes cash payments from TMUSA under the IP Transit Services Agreement for the reference period, as defined.)

● Group’s consolidated leverage ratio was below 6.0 to 1.00 ,

● Group’s consolidated secured leverage ratio was below 4.0 , and

● Group’s fixed charge coverage ratio was above 2.0 .

As of September 30, 2025, a total of $ 251.7 million was unrestricted and permitted for restricted payments, including dividends and stock purchases.

Unrestricted Payments

As of March 31, 2026, a total of $ 354.0 million was unrestricted and permitted for restricted payments, including dividends and stock purchases.

Interest Rate Swap Agreement

As of September 30, 2025, the Company was party to an interest rate swap agreement (the “Swap Agreement”).

The Swap Agreement is an independent agreement from the Company’s now extinguished Existing Secured 2026 Notes and remains outstanding until its maturity in February 2026.

The Swap Agreement has the economic effect of modifying the fixed interest rate 3.50 % obligation that was associated with the Company’s former Existing Secured 2026 Notes to a variable interest rate obligation based on the Secured Overnight Financing Rate (“SOFR”) so that the interest payable on the former Existing Secured 2026 Notes effectively became variable based on overnight SOFR.

The critical terms of the Swap Agreement match the terms of the extinguished Existing Secured 2026 Notes, including the notional amount and the optional redemption date on February 1, 2026.

The Company did not elect hedge accounting for the Swap Agreement.

The Swap Agreement is recorded at its fair value at each reporting period, and the Company incurs gains and losses due to changes in market interest rates.

By entering into the Swap Agreement, the Company has assumed the risk associated with variable interest rates.

Changes in interest rates affect the valuation of the Swap Agreement that the Company recognizes in its condensed consolidated statements of comprehensive loss.

The values that the Company reports for the Swap Agreement as of each reporting date are recognized as “interest expense including change in valuation – interest rate swap agreement” with the corresponding amounts included in assets or liabilities in the Company’s condensed consolidated balance sheets.

As of December 31, 2025, the Company was party to the Swap Agreement that has the economic effect of modifying the fixed interest rate obligation associated with its 2026 Notes to a variable interest rate obligation based on the Secured Overnight Financing Rate (“SOFR”) so that the interest payable on the 2026 Notes effectively became variable based on overnight SOFR.

The Swap Agreement was an independent agreement from the Company’s now extinguished 2026 Notes and remained outstanding until its maturity in February 2026.

Under the Swap Agreement, the Company paid the counterparty a semi-annual payment based upon overnight SOFR plus a contractual interest rate spread, and the counterparty paid the Company a semi-annual fixed 3.50 % interest payment.

The settlement payments were made each November and May.

The Swap Agreement was recorded at its fair value at each reporting period, and the Company incurred gains and losses due to changes in market interest rates.

The values that the Company reported for the Swap Agreement as of each reporting date were recognized as “interest expense including change in valuation – interest rate swap agreement” with the corresponding amounts included in assets or liabilities in the Company’s condensed consolidated balance sheets.

As of December 31, 2025, the fair value of the Swap Agreement was a net liability of $ 4.1 million, which was presented with accrued and other current liabilities.

As of December 31, 2025, the Company had made a $ 4.3 million deposit with the counterparty to the Swap Agreement.

As of December 31, 2025, $ 4.1 million of the deposit was restricted and $ 0.2 million was unrestricted.

The Swap Agreement was settled on February 5, 2026 with a payment of $ 4.1 million and the total $ 4.3 million cash deposit was released and the account was closed.

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As of September 30, 2025, the fair value of the Swap Agreement was a net liability of $ 13.8 million which is presented with accrued and other current liabilities.

As of December 31, 2024, the fair value of the Swap Agreement was a net liability of $ 22.3 million, of which $ 18.3 million was presented with accrued and other current liabilities and $ 4.0 million was presented with other long-term liabilities.

As of September 30, 2025, the Company has made a $ 14.3 million deposit with the counterparty to the Swap Agreement.

If the fair value of the Swap Agreement exceeds a net liability of $ 14.3 million, the Company will be required to deposit additional funds with the counterparty equal to the net liability fair value.

As of September 30, 2025, $ 13.8 million of the deposit was restricted and $ 0.5 million was unrestricted.

Under the Swap Agreement, the Company pays the counterparty a semi-annual payment based upon overnight SOFR plus a contractual interest rate spread, and the counterparty pays the Company a semi-annual fixed 3.50 % interest payment.

The settlement payment is made each November and May until the Swap Agreement expires in February 2026.

Under the settlement for May 2024, the Company paid $ 12.1 million to the counterparty for a net cash interest cost of $ 12.1 million for the period from November 1, 2023 to April 30, 2024.

Under the settlement for November 2024, the Company paid $ 12.1 million to the counterparty for a net cash interest cost of $ 12.1 million for the period from May 1, 2024 to October 31, 2024.

Under the settlement for May 2025, the Company paid $ 9.7 million to the counterparty for a net cash interest cost of $ 9.7 million for the period from November 1, 2024 to April 30, 2025.

Commitments and contingencies :

3 unchanged sentences

The Company reviews its accruals at least quarterly and adjusts them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

The Company has taken certain positions related to its obligations for leased circuits for which it is reasonably possible to result in a loss of up to $ 4.5 million in excess of the amount accrued at September 30, 2025.

The Company has taken certain positions related to its obligations for leased circuits for which it is reasonably possible to result in a loss of up to $ 4.6 million in excess of the amount accrued at March 31, 2026.

In the ordinary course of business, the Company is involved in other legal activities and claims.

7 unchanged sentences

Three Months Ended

Nine months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

On July 4, 2025, H.

1 (the “2025 Tax Act”) was enacted into law.

The legislation includes several significant provisions affecting the taxation of domestic and international business operations, including:

● Permanent extension of 100% bonus depreciation for qualified property placed in service after January 19, 2025.

● Changes to the interest expense limitation under Section 163(j), which includes depreciation and amortization in the calculation of adjusted taxable income thus increasing this base, and effective for tax years beginning after December 31, 2024.

This change results in a higher limitation threshold and potentially reduces disallowed interest expense in future periods.

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● Modifications to the Global Intangible Low-Taxed Income regime, now referred to as Net CFC Tested Income (“NCTI”), including the elimination of the deemed 10% on Qualified Business Asset Investment and reduction in the Section 250 deduction.

● Replacement of FDII with a new Foreign-Derived Intangible Income regime, modifying the deduction rate and simplifying the overall calculation.

Under ASC 740, the income tax effects of the 2025 Tax Act have been recognized in the period of enactment.

The Company has quantified and recorded the impact of these changes in the three months ended September 30, 2025.

These changes did not have a material impact to the Company’s consolidated financial statements.

March 31, 2026

March 31, 2025

Common stock buyback program:

The Company’s Board of Directors has approved purchases of shares of the Company’s common stock under a buyback program (the “Buyback Program”) through December 31, 2026.

In June 2024, the Company purchased 153,322 shares of its common stock for $ 8.0 million at an average share price of $ 51.97 .

In the third quarter of 2025, the Company purchased 112,311 shares of its common stock for $ 5.2 million at an average price of $ 46.02 per share under its Buyback Program.

For the nine months ended September 30, 2025, the Company purchased 341,818 shares of its common stock for $ 16.7 million at an average price of $ 48.81 per share under its Buyback Program.

On August 6, 2025, the Company’s Board approved a $ 100.0 million increase to its Buyback Program to continue through December 31, 2026.

As of September 30, 2025, there was $ 105.8 million available under the Buyback Program.

As of March 31, 2026, there was $ 105.8 million remaining for purchases under the Buyback Program.

There were no purchases of common stock in the three months ended March 31, 2026 or in the three months ended March 31, 2025.

Dividends on common stock:

On November 5, 2025 , the Company’s Board of Directors approved the payment of a quarterly dividend of $ 0.02 per share of common stock.

This estimated $ 1.0 million dividend payment is expected to be made on December 8, 2025 .

On May 1, 2026 , the Company’s Board of Directors approved the payment of a quarterly dividend of $ 0.02 per share of common stock.

This estimated $ 1.0 million dividend payment is expected to be made on June 2, 2026 .

The payment of any future dividends and any other returns of capital, including stock buybacks, will be at the discretion of the Company’s Board of Directors and may be reduced, eliminated or increased and will be dependent upon the Company’s financial position, results of operations, available cash, cash flow, capital requirements, limitations under the Company’s debt indentures and other factors deemed relevant by the Company’s Board of Directors.

4 unchanged sentences

The Audit Committee of the Company’s Board of Directors (the “Audit Committee”) reviews and approves all transactions with related parties.

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The Company’s headquarters is located in an office building owned by Sodium LLC whose owner is the Company’s Chief Executive Officer and Chairman, David Schaeffer.

7 unchanged sentences

The term for each of the New Leases is five years beginning on April 1, 2023.

Both of the New Leases

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are cancellable by the Company without penalty upon 60 days written notice.

Both of the New Leases are cancellable by the Company without penalty upon 60 days written notice.

The Company took occupancy of the office space and network operations space in April 2023.

5 unchanged sentences

The Amendment provides for $ 162,118 of additional fixed annual rent during the term of the Network Operations Lease, plus a proportionate share of real estate taxes and operating expenses and separately metered utilities expense.

The Company paid $ 0.9 million and $ 0.8 million in the three months ended September 30, 2025 and 2024, respectively, and $ 2.4 million and $ 2.5 million in the nine months ended September 30, 2025 and 2024, respectively, for rent and related costs (including taxes and utilities) for these leases.

The Company paid $ 0.8 million and $ 0.8 million in the three months ended March 31, 2026 and 2025, respectively, for rent and related costs (including taxes and utilities) for these leases.

Geographic and segment information:

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing the Company’s performance.

The Company’s Chief Executive Officer and Chairman, Dave Schaeffer, is the Company’s CODM.

The Company’s Chief Executive Officer and Chairman, David Schaeffer is the Company’s CODM.

The Company has one operating segment.

The consolidated operating segment financial information regularly reviewed by the CODM, inclusive of assets, revenue, expenses, profit or loss, and noncash items are included in the Condensed Consolidated Statements of Comprehensive Loss, Condensed Consolidated Balance Sheets, and Condensed Consolidated Statements of Cash Flows.

The consolidated operating segment financial information regularly reviewed by the CODM, inclusive of assets, revenue, expenses, profit or loss, and noncash items are included in the Condensed Consolidated Statements of Comprehensive Income (Loss), Condensed Consolidated Balance Sheets, and Condensed Consolidated Statements of Cash Flows.

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1 unchanged sentence

Below are the Company’s service revenues and long-lived assets by geographic region - including property plant and equipment and excluding intangible assets (in thousands):

Three Months Ended September 30, 2025

North America

South America

Three Months Ended September 30, 2024

North America

South America

Nine months Ended September 30, 2025

Three Months Ended March 31, 2026

North America

South America

Nine months Ended September 30, 2024

Three Months Ended March 31, 2025

North America

South America

September 30,

Long-lived assets, net

2 unchanged sentences

The majority of North American revenue consists of services delivered within the United States.

Subsequent events – Potential Sale of Acquired Data Centers:

In October 2025, the Company entered into a non-binding letter of intent “(LOI”) for the sale of two data center facilities (the “Facilities”) and the associated land for $ 144.0 million in cash.

The LOI includes certain contingencies, including the completion of further due diligence by the prospective buyer and negotiation and execution of a definitive purchase and sale agreement.

The Facilities are owned real estate acquired by the Company in the Transaction.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements