COGENT COMMUNICATIONS HOLDINGS, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2025 AND DECEMBER 31, 2024 (IN THOUSANDS, EXCEPT SHARE DATA) ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 ​ ​ (Unaudited) ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 213,651 ​ $ 198,486 Restricted cash ​ ​ 93,074 ​ ​ 29,430 Accounts receivable, net of allowance for credit losses of $ 8,390 and $ 9,762 , respectively ​ 95,127 ​ ​ 96,934 Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of $ 13,720 and $ 16,915 , respectively ​ ​ 86,280 ​ ​ 83,085 Due from T-Mobile, Transition Services Agreement ​ ​ 119 ​ ​ 62 Prepaid expenses and other current assets ​ 72,720 ​ ​ 74,104 Total current assets ​ 560,971 ​ ​ 482,101 Property and equipment: ​ ​ ​ ​ ​ ​ Property and equipment ​ ​ 3,546,033 ​ ​ 3,319,731 Accumulated depreciation and amortization ​ ​ ( 1,820,651 ) ​ ​ ( 1,655,564 ) Total property and equipment, net ​ ​ 1,725,382 ​ ​ 1,664,167 Right-of-use leased assets ​ 325,681 ​ ​ 324,315 IPv4 intangible asset ​ ​ 458,000 ​ ​ 458,000 Other intangible assets, net ​ ​ 12,147 ​ ​ 13,029 Deposits and other assets ​ 29,809 ​ ​ 29,596 Due from T-Mobile, IP Transit Services Agreement, net of discount of $ 6,343 and $ 12,312 , respectively ​ ​ 135,323 ​ ​ 179,534 Due from T-Mobile, Purchase Agreement, net of discount of $ 4,897 and $ 5,755 , respectively ​ ​ 23,218 ​ ​ 22,360 Total assets ​ $ 3,270,531 ​ $ 3,173,102 Liabilities and stockholders’ equity ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 49,169 ​ $ 39,805 Accrued and other current liabilities ​ ​ 116,653 ​ ​ 134,609 Due to T-Mobile – Transition Services Agreement ​ ​ 9 ​ ​ 525 Current maturities, operating lease liabilities ​ ​ 50,932 ​ ​ 57,172 Finance lease obligations, current maturities ​ ​ 26,523 ​ ​ 21,225 Total current liabilities ​ 243,286 ​ ​ 253,336 Senior secured 2026 notes, net of unamortized debt costs of $ 375 and discount of $ 499 ​ — ​ ​ 499,126 Senior unsecured 2027 notes, net of unamortized debt costs of $ 1,632 and $ 2,013 , respectively, and discounts of $ 5,724 and $ 7,053 , respectively ​ ​ 742,644 ​ ​ 740,934 Secured IPv4 notes, net of unamortized debt costs of $ 9,880 and $ 6,702 , respectively ​ ​ 370,520 ​ ​ 199,298 Senior secured 2032 notes, net of unamortized debt costs of $ 2,143 ​ ​ 597,857 ​ ​ — Operating lease liabilities, net of current maturities ​ ​ 298,515 ​ ​ 302,004 Finance lease obligations, net of current maturities ​ 578,634 ​ ​ 517,161 Deferred income tax liabilities ​ ​ 362,464 ​ ​ 398,266 Other long-term liabilities ​ 29,943 ​ ​ 40,129 Total liabilities ​ 3,223,863 ​ ​ 2,950,254 Commitments and contingencies: ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ Common stock, $ 0.001 par value; 75,000,000 shares authorized; 49,246,196 and 49,034,925 shares issued and outstanding, respectively ​ 49 ​ ​ 49 Additional paid-in capital ​ 632,702 ​ ​ 629,829 Accumulated other comprehensive loss ​ ( 1,196 ) ​ ​ ( 30,685 ) Accumulated deficit ​ ( 584,887 ) ​ ​ ( 376,345 ) Total stockholders’ equity ​ 46,668 ​ ​ 222,848 Total liabilities and stockholders’ equity ​ $ 3,270,531 ​ $ 3,173,102 ​ The accompanying notes are an integral part of these condensed consolidated balance sheets. ​ Page 3 of 58 Table of Contents COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Three Months Ended ​ June 30, 2025 ​ June 30, 2024 ​ ​ (Unaudited) (Unaudited) Service revenue ​ $ 246,247 ​ $ 260,443 Operating expenses: ​ ​ ​ ​ Network operations (including $ 506 and $ 350 of equity-based compensation expense, respectively, exclusive of depreciation and amortization shown separately below) ​ 137,492 ​ 156,167 Selling, general, and administrative (including $ 4,158 and $ 3,215 of equity-based compensation expense, respectively) ​ 64,924 ​ 68,345 Acquisition costs – Sprint ​ — ​ 12,370 Depreciation and amortization ​ 75,290 ​ 74,036 Total operating expenses ​ 277,706 ​ 310,918 Gain on lease termination ​ ​ — ​ ​ 3,332 Operating loss ​ ( 31,459 ) ​ ( 47,143 ) Interest expense, including change in valuation interest rate swap agreement ​ ( 39,777 ) ​ ( 29,541 ) Loss on debt extinguishment and redemption – 2026 notes ​ ​ ( 5,606 ) ​ ​ — Gain on bargain purchase – Sprint ​ — ​ 27,673 Interest income – IP Transit Services Agreement ​ 4,299 ​ 5,934 Interest income – Purchase Agreement ​ 433 ​ 402 Interest income and other, net ​ ( 2,415 ) ​ 2,484 Loss before income taxes ​ ( 74,525 ) ​ ( 40,191 ) Income tax benefit ​ 16,718 ​ 7,853 Net loss ​ $ ( 57,807 ) ​ $ ( 32,338 ) ​ ​ ​ ​ Comprehensive loss: ​ ​ Net loss ​ $ ( 57,807 ) ​ $ ( 32,338 ) Foreign currency translation adjustment ​ 17,737 ​ ( 1,722 ) Comprehensive loss ​ $ ( 40,070 ) ​ $ ( 34,060 ) ​ ​ ​ ​ ​ ​ ​ Net loss per common share: ​ ​ Basic net loss per common share ​ $ ( 1.21 ) ​ $ ( 0.68 ) Diluted net loss per common share ​ $ ( 1.21 ) ​ $ ( 0.68 ) Dividends declared per common share ​ $ 1.010 ​ $ 0.975 ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares - basic ​ 47,592,836 ​ 47,511,613 ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares - diluted ​ 47,592,836 ​ 47,511,613 ​ The accompanying notes are an integral part of these condensed consolidated statements. ​ Page 4 of 58 Table of Contents COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended Six Months Ended ​ ​ June 30, 2025 ​ June 30, 2024 ​ (Unaudited) (Unaudited) Service revenue ​ $ 493,298 ​ $ 526,613 Operating expenses: ​ ​ ​ ​ ​ ​ Network operations (including $ 996 and $ 735 of equity-based compensation expense, respectively, exclusive of depreciation and amortization shown separately below) ​ 274,930 ​ ​ 324,752 Selling, general, and administrative (including $ 11,681 and $ 9,781 of equity-based compensation expense, respectively) ​ 138,787 ​ ​ 145,392 Acquisition costs – Sprint ​ ​ — ​ ​ 21,407 Depreciation and amortization ​ 151,328 ​ ​ 144,930 Total operating expenses ​ 565,045 ​ ​ 636,481 Gain on lease termination ​ ​ — ​ ​ 3,332 Operating loss ​ ​ ( 71,747 ) ​ ​ ( 106,536 ) Interest expense, including change in valuation interest rate swap agreement ​ ​ ( 73,971 ) ​ ​ ( 58,703 ) Loss on debt extinguishment and redemption – 2026 notes ​ ​ ( 5,606 ) ​ ​ — Gain on bargain purchase – Sprint ​ ​ — ​ ​ 22,202 Interest income – IP Transit Services Agreement ​ ​ 8,984 ​ ​ 13,264 Interest income (loss) – Purchase Agreement ​ ​ 858 ​ ​ ( 78 ) Interest income and other, net ​ ​ ( 3,306 ) ​ ​ 5,226 Loss before income taxes ​ ​ ( 144,788 ) ​ ​ ( 124,625 ) Income tax benefit ​ 34,939 ​ ​ 26,980 Net loss ​ $ ( 109,849 ) ​ $ ( 97,645 ) ​ ​ ​ ​ ​ ​ Comprehensive loss: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 109,849 ) ​ $ ( 97,645 ) Foreign currency translation adjustment ​ 29,489 ​ ​ ( 6,756 ) Comprehensive loss ​ $ ( 80,360 ) ​ $ ( 104,401 ) ​ ​ ​ ​ ​ ​ Net loss per common share: ​ ​ ​ ​ ​ ​ Basic net loss per common share ​ $ ( 2.30 ) ​ $ ( 2.06 ) Diluted net loss per common share ​ $ ( 2.30 ) ​ $ ( 2.06 ) Dividends declared per common share ​ $ 2.015 ​ $ 1.940 ​ ​ ​ ​ ​ ​ Weighted-average common shares - basic ​ ​ 47,804,421 ​ ​ 47,408,786 ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares - diluted ​ ​ 47,804,421 ​ ​ 47,408,786 ​ The accompanying notes are an integral part of these condensed consolidated statements. ​ Page 5 of 58 Table of Contents COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024 (IN THOUSANDS) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ Six Months Ended ​ June 30, 2025 June 30, 2024 ​ ​ (Unaudited) ​ (Unaudited) Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 109,849 ) ​ $ ( 97,645 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 151,328 ​ ​ 144,930 Amortization of debt costs and discounts ​ 2,534 ​ ​ 1,106 Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements ​ ​ ( 9,842 ) ​ ​ ( 13,186 ) Equity-based compensation expense (net of amounts capitalized) ​ 12,677 ​ ​ 10,516 Loss on debt extinguishment and redemption – 2026 notes ​ ​ 5,606 ​ ​ — Gain on bargain purchase – Sprint ​ ​ — ​ ​ ( 22,202 ) Gain on finance lease termination ​ ​ — ​ ​ ( 3,332 ) Deferred income taxes ​ ​ ( 35,802 ) ​ ​ ( 43,554 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 1,807 ​ ​ 23,799 Prepaid expenses and other current assets ​ ​ ( 6,222 ) ​ ​ 12,900 Due to T-Mobile – Transition Services Agreement ​ ​ ( 516 ) ​ ​ ( 64,622 ) Due from T-Mobile – Transition Services Agreement ​ ​ ( 57 ) ​ ​ ( 11,671 ) Accounts payable, accrued liabilities and other long-term liabilities ​ ​ ( 17,784 ) ​ ​ 62,698 Deposits and other assets ​ ( 1,567 ) ​ ​ ( 2,688 ) Net cash used in operating activities ​ ( 7,687 ) ​ ​ ( 2,951 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Cash receipts - IP Transit Services Agreement – T-Mobile ​ ​ 50,000 ​ ​ 154,167 Acquisition of Sprint – severance reimbursement ​ ​ — ​ ​ 12,323 Purchases of property and equipment ​ ​ ( 114,288 ) ​ ​ ( 89,650 ) Net cash (used in) provided by investing activities ​ ( 64,288 ) ​ ​ 76,840 Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Dividends paid ​ ( 98,693 ) ​ ​ ( 93,782 ) Purchases of common stock ​ ​ ( 11,517 ) ​ ​ ( 7,968 ) Net proceeds from issuance of senior unsecured 2027 notes - net of discount of $ 6.8 million and debt costs of $ 1.4 million ​ ​ — ​ ​ 291,879 Net proceeds from issuance of secured IPv4 notes – net of debt costs of $ 4.0 million and $ 7.6 million, respectively ​ 170,479 ​ ​ 198,420 Net proceeds from issuance of senior secured 2032 notes - net of debt costs of $ 2.2 million ​ ​ 597,842 ​ ​ — Debt extinguishment and redemption – 2026 notes ​ ​ ( 505,000 ) ​ ​ — Proceeds from exercises of stock options ​ ​ 151 ​ ​ 204 Settlement of finance lease – at a discount ​ ​ — ​ ​ ( 114,576 ) Principal payments of finance lease obligations ​ ​ ( 16,523 ) ​ ​ ( 42,131 ) Net cash provided by financing activities ​ 136,739 ​ ​ 232,046 Effect of exchange rates changes on cash ​ 14,045 ​ ​ 6,525 Net increase in cash, cash equivalents and restricted cash ​ ​ 78,809 ​ ​ 312,460 Cash, cash equivalents and restricted cash, beginning of period ​ ​ 227,916 ​ ​ 113,781 Cash, cash equivalents and restricted cash, end of period ​ $ 306,725 ​ $ 426,241 Supplemental disclosure of non-cash financing activities: ​ ​ ​ ​ ​ ​ Finance lease obligations incurred ​ $ 118,037 ​ $ 96,606 ​ The accompanying notes are an integral part of these condensed consolidated statements. ​ Page 6 of 58 Table of Contents COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Description of the business: Reorganization and merger On May 15, 2014, pursuant to the Agreement and Plan of Reorganization by and among Cogent Communications Group, Inc. (now Cogent Communications Group, LLC), a Delaware corporation (“Group”), Cogent Communications Holdings, Inc., a Delaware corporation (“Holdings”), and Cogent Communications Merger Sub, Inc., a Delaware corporation, Group adopted a new holding company organizational structure whereby Group is now a wholly owned subsidiary of Holdings. Holdings is a “successor issuer” to Group pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). References to the “Company” for events that occurred prior to May 15, 2014 refer to Cogent Communications Group, Inc. (now Cogent Communications Group, LLC) and its subsidiaries, and on and after May 15, 2014, the “Company” refers to Cogent Communications Holdings, Inc. and its subsidiaries. Cogent Communications, LLC (formerly Cogent Communications, Inc.) is wholly owned by Group, Cogent Fiber LLC (formerly Sprint Communications Company LP) is indirectly wholly owned by Holdings, and the vast majority of the Company’s assets are held by, contractual arrangements are executed by, and operations are conducted by, Cogent Fiber LLC and Cogent Communications, LLC. Description of business 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 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. 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. The Company’s on-net service consists of high-speed Internet access and private network services offered at speeds ranging from 100 megabits per second to 400 gigabits per second. The Company provides its on-net Internet access and private network services to its corporate, net-centric and enterprise customers. The Company’s corporate customers are located in multi-tenant office buildings that typically include law firms, financial services firms, advertising and marketing firms, as well as health care providers, educational institutions and other professional services businesses. The Company’s net-centric customers include bandwidth-intensive users that leverage its network either to deliver content to end users or to provide access to residential or commercial Internet users. Content delivery customers include over the top media service providers, content delivery networks, web hosting companies, and commercial content and application software providers. The Company’s net-centric customers include access networks comprised of other Internet Service Providers, telephone companies, mobile phone operators and cable television companies that collectively provide internet access to a substantial number of broadband subscribers and mobile phone subscribers across the world. These net-centric customers generally receive the Company’s services in carrier neutral colocation facilities and in the Company’s own data centers. The Company operates data centers throughout North America and Europe that allow its customers to collocate their equipment and access the Company’s network. In addition to providing on-net services, the Company provides Internet access and private network services to customers that are not located in buildings directly connected to its network. The Company provides these off-net services primarily to corporate customers using other carriers’ circuits to provide the “last mile” portion of the link from the customers’ premises to the Company’s network. The Company also provides certain non-core services that resulted from acquisitions, including the acquisition of Sprint Communications, now called Cogent Fiber LLC (as discussed below). 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, 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. 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. Additionally, the Cogent Fiber Business (as defined below) customers include a number of companies larger Page 7 of 58 Table of Contents than the Company’s historical customer base. In connection with the acquisition of Cogent Fiber LLC, the Company expanded selling services to these larger “Enterprise” customers. Acquisition of Sprint Communications On September 6, 2022, Cogent Infrastructure, Inc. (now Cogent Infrastructure, LLC), a Delaware corporation and a direct wholly owned subsidiary of the Company (the “Buyer” or “Cogent Infrastructure”), entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with 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”), pursuant to which the Company acquired the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications (now Cogent Fiber LLC) and its subsidiaries (the “Cogent Fiber Business”). Pursuant to the Purchase Agreement, the Company 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, held Sprint Communications’ assets and liabilities relating to the Cogent Fiber Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”). The Purchase Agreement included customary representations, warranties, indemnities and covenants, including regarding the conduct of the Cogent Fiber Business prior to the closing of the Transaction (the “Closing”). In addition, the Closing was subject to customary closing conditions, including the receipt of certain required regulatory approvals and consents. The Company believes it is in a unique position to monetize the Cogent Fiber Business and its network and management expects to achieve significant cost reduction synergies and revenue synergies from the Transaction. Purchase Price The Transaction closed on May 1, 2023 (the “Closing Date”). On the Closing Date, the Buyer consummated the Transaction pursuant to the terms of the Purchase Agreement, providing a purchase price of $ 1 payable to the Seller for the Purchased Interests, subject to customary adjustments, including working capital (the “Working Capital Adjustment”), as set forth in the Purchase Agreement. As consideration for the Purchased Interests, the Working Capital Adjustment (primarily related to acquired cash and cash equivalents of an estimated $ 43.4 million at the Closing Date in order to fund the international operations of the Cogent Fiber Business) resulted in the Buyer making a payment to the Seller of $ 61.1 million on the Closing Date. During the third quarter of 2023, an additional Working Capital Adjustment of $ 5.0 million was accrued due to the Seller. The final determination of the Working Capital Adjustment (which included the Short-term Lease Payment below) was completed in April 2024, and the Company paid the Seller $ 5.0 million for the remaining Working Capital Adjustment. Short-term lease payment The Purchase Agreement also provides for a payment of $ 28.1 million ($ 19.8 million net of discount) from the Seller to the Buyer related to acquired short-term operating lease obligations (the “Short-term Lease Payment”). The Short-term Lease Payment will be paid from the Seller to the Company in four equal payments in months 55 to 58 after the Closing Date. The final determination of the Short-term Lease Payment was completed in April 2024. The Short-term Lease Payment was recorded at its present value resulting in a discount of $ 8.4 million. The interest rate used in determining the present value was derived considering rates on similar issued debt instruments with comparable durations, among other market factors. The determination of the discount rate requires some judgment. 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 (expense) of $ 0.4 million and $ 0.4 million for the three months ended June 30, 2025 and 2024, respectively, and interest income (expense) of $ 0.9 million and ($ 0.1 ) million for the six months ended June 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 $ 8.0 million and $ 12.3 million were recorded in the three and six months ended June 30, 2024, respectively. These severance payments ended in the second quarter of 2024. Page 8 of 58 Table of Contents IP Transit Services Agreement On the Closing Date, Cogent Communications, Inc. (now Cogent Communications, LLC), and T-Mobile USA, Inc., a Delaware corporation and direct subsidiary of T-Mobile (“TMUSA”), entered into an agreement for IP transit services (“IP Transit Services Agreement”), pursuant to which TMUSA will pay an affiliate of the Company an aggregate of $ 700.0 million, consisting of (i) $ 350.0 million in equal monthly installments of $ 29.2 million per month during the first year after the Closing Date and (ii) $ 350.0 million in equal monthly installments of $ 8.3 million per month over the subsequent 42 months. Under the IP Transit Services Agreement. TMUSA paid the Company $ 25.0 million and $ 66.7 million during the three months ended June 30, 2025 and 2024, respectively and paid the Company $ 50.0 million and $ 154.2 million during the six months ended June 30, 2025 and 2024, respectively. The Company accounted for the Transaction as a business combination under ASC Topic 805 Business Combinations (“ASC 805”). The Company evaluated what elements are part of the business combination and the consideration exchanged to complete the acquisition. 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 ASU No. 2014 - 09 Revenue from Contracts with Customers (“ASC 606”). The Company has concluded that T - Mobile did not represent a “customer” as defined by ASC 606, the stated contract price did not represent consideration for services to be delivered, and the transaction did not satisfy the definition of revenue, which excluded this arrangement from the scope of ASC 606. As a result, and considering statements made by T - Mobile, the IP Transit Services Agreement was recorded in connection with the Transaction at its discounted present value resulting in a discount of $ 79.6 million. The interest rate used in determining the present value was derived considering rates on similar issued debt instruments with comparable durations, among other market factors. The determination of the discount rate requires some judgment. The amortization of the discount resulted in interest income of $ 4.3 million and $ 5.9 million during the three months ended June 30, 2025 and 2024, respectively, and $ 9.0 million and $ 13.3 million during the six months ended June 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 are generally intended to be provided for a period of up to two years following the Closing Date, although such period may be extended for an additional one-year term by either party upon 30 days ’ prior written notice. The fees for the Transition Services are calculated using either a per service monthly fee or an hourly rate for the employees allocated to provide such services. Any third-party costs incurred in providing the Transition Services are 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 are reimbursed at cost. Either party to the TSA may terminate the agreement with respect to any individual service in full for convenience upon 30 days ’ prior written notice for certain services and reduced for other services after a 90 -day period. The TSA may be terminated in its entirety if the other party has failed to perform any of its material obligations and such failure is not cured within 30 days. The TSA provides for customary indemnification and limits on liability. Amounts billed under the TSA are due 30 days from receipt of the related invoice. Amounts billed to the Company under the TSA are 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 six months ended June 30, 2025, the Company was billed $ 10,000 and $ 0.4 million as due to the Seller under the TSA, respectively. During the three and six months ended June 30, 2024, the Company was billed $ 6.7 million and $ 23.3 million as due to the Seller under the TSA, respectively. During the three and six months ended June 30, 2025, the Company paid the Seller $ 0.2 million and $ 0.9 million, respectively, under the TSA. During the three and six months ended June 30, 2024, the Company paid the Seller $ 9.8 million and $ 88.2 million, respectively, under the TSA. Page 9 of 58 Table of Contents During the three and six months ended June 30, 2025, the Company billed the Seller $ 0.1 million and $ 0.1 million, respectively, under the TSA. During the three and six months ended June 30, 2024, the Company billed the Seller $ 0.4 million and $ 0.9 million, respectively, under the TSA. During the six months ended June 30, 2025, the Seller paid the Company $ 0.1 million under the TSA. There were no payments received during the three months ended June 30, 2025 under the TSA. During the three and six months ended June 30, 2024, the Seller paid the Company $ 0.5 million and $ 0.9 million, respectively, under the TSA. As of June 30, 2025, the Company owed $ 9,000 to the Seller, and the Seller owed $ 0.1 million to the Company under the TSA. As of December 31, 2024, the Company owed $ 0.5 million to the Seller, and the Seller owed $ 0.1 million to the Company under the TSA. 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 six months ended June 30, 2025, the Company billed and recorded revenue due from the Seller of $ 1.1 million and $ 1.8 million, respectively under the Commercial Agreement. During the three and six months ended June 30, 2024, the Company billed and recorded revenue due from the Seller of $ 5.9 million and $ 9.1 million, respectively under the Commercial Agreement. As of June 30, 2025, and December 31, 2024, TMUSA owed $ 0.9 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 six months ended June 30, 2024, respectively. There were no acquisition-related costs incurred in the three or six months ended June 30, 2025. Consideration The acquisition-date fair value of consideration received from the Transaction comprised of the following: ​ ​ ​ ​ ​ (In thousands) May 1, 2023 Working capital payments made to the Seller, net of severance reimbursements (a) ​ $ 37,532 Purchase Agreement payment to be received from the Seller, net of discount of $ 8,392 (b) ​ 19,723 Amounts due from the Seller – IP Transit Services Agreement, net of discount of $ 79,610 (c) ​ 620,390 Total to be received from the Seller ​ 640,113 Total net consideration to be received from the Seller (d) ​ 602,581 (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; and ● $ 8.0 million during the three months ended June 30, 2024. (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. Page 10 of 58 Table of Contents (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; and ● 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; and ● An adjustment to net deferred income tax liabilities of $ 19.7 million. Page 11 of 58 Table of Contents 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. ​ ​ ​ ​ ​ ​ May 1, 2023 Assets ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 47,074 Accounts receivable ​ 39,948 Prepaid expenses and other current assets ​ 22,777 Total current assets ​ 109,799 Total property and equipment ​ 965,715 Right-of-use leased assets ​ 304,982 IPv4 intangible asset ​ 458,000 Other intangible assets ​ ​ 16,000 Deposits and other assets ​ 7,521 Total assets ​ $ 1,862,017 Liabilities ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 13,313 Accrued and other current liabilities ​ 25,344 Current maturities, operating lease liabilities ​ 74,562 Current maturities, finance lease liabilities ​ ​ 39,559 Total current liabilities ​ 152,778 Operating lease liabilities, net of current maturities ​ 251,573 Finance lease liabilities, net of current maturities ​ ​ 121,342 Deferred income tax liabilities ​ 474,891 Other long-term liabilities ​ 35,366 Total liabilities ​ 1,035,950 Fair value of net assets acquired ​ $ 826,067 Gain on bargain purchase ​ ​ ​ Fair value of net assets acquired ​ $ 826,067 Total net consideration to be received from the Seller, net of discounts - see table above ​ ​ 602,581 Gain on bargain purchase ​ $ 1,428,648 ​ Acquired Property & Equipment The Company acquired property and equipment of $ 965.7 million. This is primarily comprised of the legacy Sprint network and consists 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; however, management valued these assets using factors that represent an orderly liquidation value, to approximate the highest and best use of assets acquired in a distressed business. The estimated fair value of the optical fiber on the Closing Date was $ 369.2 million. The valuation required the estimation of the total replacement cost per mile of fiber and a factor to reflect the orderly liquidation value. There is no active market data for these assumptions and these assumptions are inherently subjective. Market participants could have differing views on these assumptions, which could result in a materially different fair value of the optical fiber. Acquired Leases The Company acquired a portfolio of lease arrangements for the lease of dark fiber, rights-of-way and facilities. In accordance with ASC 805 and ASC Topic 842, Leases , the acquired leases are accounted for as if the leases were new at the acquisition date, however, the Company retains the lease classification from the Seller. 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 Page 12 of 58 Table of Contents (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. Unfavorable lease liabilities are presented net of the corresponding right-of-use assets. Acquired Intangible Assets Intangible assets acquired include $ 458.0 million of Internet Protocol version 4 (“ IPv4”) addresses and $ 16.0 million of acquired customer relationships. 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 $ 0.8 million for the three and six months ended June 30, 2025, respectively and was $ 0.4 million and $ 0.9 million for the three and six months ended June 30, 2024, respectively. Future amortization expense of the customer relationships is $ 1.8 million per year for seven 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. The Company believes that the IPv4 address asset has an indefinite useful life and is not being amortized. The Company evaluates the IPv4 address asset for impairment on the first day of the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. In performing the impairment assessment, the Company may first evaluate qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. 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. Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments that the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles, (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. While the Company believes that the disclosures are adequate to not make the information misleading, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in its annual report on Form 10-K for the year ended December 31, 2024. Certain prior year amounts have been reclassified to conform to current year presentation. The accompanying unaudited condensed consolidated financial statements include all wholly owned subsidiaries. All inter-company accounts and activity have been eliminated. Page 13 of 58 Table of Contents 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. Actual results may differ from these estimates. Financial instruments At June 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. 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 June 30, 2025, ● 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 $ 450.0 million; ● The fair value of the Company’s $ 300.0 million aggregate principal amount of 7.00 % Senior Unsecured Mirror Notes due 2027 (the “2027 Mirror Notes”) was $ 300.0 million; ● 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 $ 591.0 million; ● The fair value of the Company’s $ 206.0 million aggregate principal amount of 7.924 % Existing IPv4 Notes (as defined below) was $ 211.3 million; ● The fair value of the Company’s $ 174.4 million aggregate principal amount of 6.646 % IPv4 New Notes (as defined below) was $ 175.4 million; and ● The fair value of the Company’s Swap Agreement (as defined below) was $ 13.6 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 $ 13.6 million as of June 30, 2025 and $ 22.3 million at December 31, 2024. Additional restricted cash related to the IPv4 Notes, as discussed in Note 3, was $ 79.5 million as of June 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 Company does not use derivative financial instruments for trading purposes. Gross receipts taxes, universal service fund and other surcharges Revenue recognition standards include guidance relating to taxes or surcharges assessed by a governmental authority that are directly imposed on a revenue-producing transaction between a seller and a customer and may include, but are not limited to, gross receipts taxes, excise taxes, Universal Service Fund fees and certain state regulatory fees. Such charges may be presented gross or net based upon the Company’s accounting policy election. 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 $ 20.0 million and $ 40.2 million for the three and six months ended June 30, 2025, respectively and were $ 19.2 million and $ 39.7 million for the three and six months ended June 30, 2024, respectively. Page 14 of 58 Table of Contents 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. 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. The following details the determination of diluted weighted-average shares: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Three Months Six Months Six Months ​ ​ Ended ​ Ended ​ Ended ​ Ended ​ June 30, 2025 June 30, 2024 ​ June 30, 2025 ​ June 30, 2024 Weighted average common shares - basic ​ 47,592,836 ​ 47,511,613 ​ 47,804,421 ​ 47,408,786 Dilutive effect of stock options ​ — ​ — ​ — ​ — Dilutive effect of restricted stock ​ — ​ — ​ — ​ — Weighted average common shares - diluted ​ 47,592,836 ​ 47,511,613 ​ 47,804,421 ​ 47,408,786 ​ The following details unvested shares of restricted common stock as well as the anti-dilutive effects of stock options and restricted stock awards outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months ​ Three Months ​ Six Months ​ Six Months ​ ​ Ended ​ Ended ​ Ended ​ Ended ​ June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Unvested shares of restricted common stock ​ 1,657,168 ​ 1,624,434 ​ 1,657,168 ​ 1,624,434 Anti-dilutive options for common stock ​ 223,068 ​ 185,211 ​ 202,864 ​ 152,867 Anti-dilutive shares of restricted common stock ​ 782,800 ​ 384,098 ​ 911,907 ​ 373,452 ​ Stockholders’ Equity The following details the changes in stockholders’ equity for the three months and six ended June 30, 2025 and 2024, respectively (in thousands except share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Loss Deficit Equity Balance at March 31, 2025 ​ 49,337,310 ​ $ 49 ​ $ 639,248 ​ $ ( 18,933 ) ​ $ ( 477,520 ) ​ $ 142,844 Forfeitures of shares granted to employees ​ ( 59,281 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Equity-based compensation ​ — ​ ​ — ​ ​ 5,422 ​ ​ — ​ ​ — ​ ​ 5,422 Foreign currency translation ​ — ​ ​ — ​ ​ — ​ ​ 17,737 ​ ​ — ​ ​ 17,737 Issuances of common stock ​ 196,788 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Exercises of options ​ 886 ​ ​ — ​ ​ 30 ​ ​ — ​ ​ — ​ ​ 30 Common stock purchases & retirement ​ ( 229,507 ) ​ ​ — ​ ​ ( 11,998 ) ​ ​ — ​ ​ — ​ ​ ( 11,998 ) Dividends paid ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 49,560 ) ​ ​ ( 49,560 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 57,807 ) ​ ​ ( 57,807 ) Balance at June 30, 2025 ​ 49,246,196 ​ $ 49 ​ $ 632,702 ​ $ ( 1,196 ) ​ $ ( 584,887 ) ​ $ 46,668 ​ Page 15 of 58 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Loss Deficit Equity Balance at March 31, 2024 ​ 49,013,487 ​ $ 49 ​ $ 614,535 ​ $ ( 19,419 ) ​ $ ( 94,521 ) ​ $ 500,644 Forfeitures of shares granted to employees ( 73,166 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Equity-based compensation — ​ ​ — ​ ​ 4,298 ​ ​ — ​ ​ — ​ ​ 4,298 Foreign currency translation — ​ ​ — ​ ​ — ​ ​ ( 1,722 ) ​ ​ — ​ ​ ( 1,722 ) Issuances of common stock 202,692 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Exercises of options 1,069 ​ ​ — ​ ​ 40 ​ ​ — ​ ​ — ​ ​ 40 Common stock purchases & retirement ​ ( 153,322 ) ​ ​ — ​ ​ ( 7,968 ) ​ ​ — ​ ​ — ​ ​ ( 7,968 ) Dividends paid — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 47,431 ) ​ ​ ( 47,431 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 32,338 ) ​ ​ ( 32,338 ) Balance at June 30, 2024 48,990,760 ​ $ 49 ​ $ 610,905 ​ $ ( 21,141 ) ​ $ ( 174,290 ) ​ $ 415,523 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Loss Deficit Equity Balance at December 31, 2024 49,034,925 ​ $ 49 ​ $ 629,829 ​ $ ( 30,685 ) ​ $ ( 376,345 ) ​ $ 222,848 Forfeitures of shares granted to employees ( 69,541 ) ​ — ​ — ​ — ​ — ​ — Equity-based compensation — ​ — ​ 14,720 ​ — ​ — ​ 14,720 Foreign currency translation — ​ — ​ — ​ 29,489 ​ — ​ 29,489 Issuances of common stock 507,386 ​ — ​ — ​ — ​ — ​ — Exercises of options 2,933 ​ — ​ 151 ​ — ​ — ​ 151 Common stock purchases & retirement ​ ( 229,507 ) ​ ​ — ​ ​ ( 11,998 ) ​ ​ — ​ ​ — ​ ​ ( 11,998 ) Dividends paid — ​ — ​ — ​ — ​ ( 98,693 ) ​ ( 98,693 ) Net loss — ​ — ​ — ​ — ​ ( 109,849 ) ​ ( 109,849 ) Balance at June 30, 2025 49,246,196 ​ $ 49 ​ $ 632,702 ​ $ ( 1,196 ) ​ $ ( 584,887 ) ​ $ 46,668 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Loss Deficit Equity Balance at December 31, 2023 48,608,569 ​ $ 49 ​ $ 606,755 ​ $ ( 14,385 ) ​ $ 17,137 ​ $ 609,556 Forfeitures of shares granted to employees ( 110,545 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Equity-based compensation — ​ ​ — ​ ​ 11,914 ​ ​ — ​ ​ — ​ ​ 11,914 Foreign currency translation — ​ ​ — ​ ​ — ​ ​ ( 6,756 ) ​ ​ — ​ ​ ( 6,756 ) Issuances of common stock 641,782 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Exercises of options 4,276 ​ ​ — ​ ​ 204 ​ ​ — ​ ​ — ​ ​ 204 Common stock purchases & retirement ( 153,322 ) ​ ​ — ​ ​ ( 7,968 ) ​ ​ — ​ ​ — ​ ​ ( 7,968 ) Dividends paid ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 93,782 ) ​ ​ ( 93,782 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 97,645 ) ​ ​ ( 97,645 ) Balance at June 30, 2024 48,990,760 ​ $ 49 ​ $ 610,905 ​ $ ( 21,141 ) ​ $ ( 174,290 ) ​ $ 415,523 ​ Page 16 of 58 Table of Contents Revenue recognition The Company recognizes revenue under ASU No. 2014 - 09, Revenue from Contracts with Customers (“ASC 606”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Fees billed in connection with customer installations are recorded as deferred revenue. Installation fees for contracts with terms longer than month-to-month are recognized over the contract term. The Company recognizes revenue over the estimated average customer life for installation fees associated with month-to-month contracts. To the extent a customer contract is terminated prior to its contractual end, the customer is subject to termination fees. The Company vigorously seeks payment of these termination fees. The Company recognizes revenue for termination fees as they are collected. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Three Months Six Months Six Months ​ ​ Ended ​ Ended ​ Ended ​ Ended (in thousands) ​ June 30, 2025 ​ June 30, 2024 ​ June 30, 2025 ​ June 30, 2024 Service revenue recognized from deferred revenue balance at beginning of period ​ $ 2,310 ​ $ 2,042 ​ $ 4,107 ​ $ 4,663 Amortization expense for contract costs ​ 5,562 ​ ​ 5,017 ​ ​ 10,935 ​ ​ 9,913 ​ Lessor Accounting The Company is a lessor for leases of owned dark fiber acquired in connection with the Transaction, that have contract terms that are accounted for as operating leases. These transactions are generally structured as indefeasible-right-of use agreements (“IRUs”), which are the exclusive right to use specified fibers for a specified term, typically 20 - 25 years . 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. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 replaced most existing lease accounting guidance. The operating lease liability under ASU 2016-02 is not considered a liability under the consolidated leverage ratio calculations in the indentures governing the Company’s senior unsecured and senior secured note obligations. The Company has made an accounting policy election to not apply the recognition requirements of ASU 2016-02 to its short-term leases-leases with a term of one year or less. The Company has also elected to apply certain practical expedients under ASU 2016-02 including not separating lease and non-lease components on its finance and operating leases. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Three Months Six Months Six Months ​ ​ Ended Ended ​ Ended Ended (Amounts in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Finance lease cost ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of right-of-use assets ​ $ 13,975 ​ $ 12,204 ​ $ 27,891 ​ $ 23,768 Interest expense on finance lease liabilities ​ 12,509 ​ ​ 9,919 ​ ​ 23,615 ​ ​ 20,330 Operating lease cost ​ 18,569 ​ ​ 22,716 ​ ​ 36,013 ​ ​ 46,967 Total lease costs ​ $ 45,053 ​ $ 44,839 ​ $ 87,519 ​ $ 91,065 Page 17 of 58 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Six Months ​ ​ ​ Ended ​ Ended ​ ​ ​ June 30, 2025 ​ June 30, 2024 ​ Other lease information (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities ​ ​ ​ ​ ​ ​ ​ Operating cash flows from finance leases ​ $ ( 22,650 ) ​ $ ( 16,562 ) ​ Operating cash flows from operating leases ​ ​ ( 35,790 ) ​ ​ ( 47,671 ) ​ Financing cash flows from finance leases ​ ​ ( 16,523 ) ​ ​ ( 156,707 ) ​ Right-of-use assets obtained in exchange for new finance lease liabilities ​ ​ 79,076 ​ ​ 96,606 ​ Right-of-use assets obtained in exchange for new operating lease liabilities ​ ​ 15,105 ​ ​ 8,265 ​ Weighted-average remaining lease term — finance leases (in years) ​ ​ 17.1 ​ ​ 16.3 ​ Weighted-average remaining lease term — operating leases (in years) ​ ​ 11.3 ​ ​ 12.5 ​ Weighted average discount rate — finance leases ​ ​ 8.1 % ​ 8.4 % Weighted average discount rate — operating leases ​ ​ 7.6 % ​ 8.0 % ​ Operating leases and finance leases The Company has entered into lease agreements with numerous providers of dark fiber under IRUs. These IRUs typically have initial terms of 15 - 20 years and include renewal options after the initial lease term. The majority of these leases are finance leases. The Company also leases office space, rights-of-way, dark fiber and certain data center facilities under operating leases. 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 June 30, 2025, the Company had committed to additional IRU agreements totaling $ 142.2 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. The future minimum payments under the Company’s operating lease and finance lease agreements are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Operating Finance For the Twelve Months Ending June 30, ​ Leases ​ Leases 2026 $ 63,741 ​ $ 70,101 2027 ​ ​ 59,578 ​ ​ 64,390 2028 ​ ​ 57,370 ​ ​ 65,586 2029 ​ ​ 55,203 ​ ​ 64,092 2030 ​ ​ 34,497 ​ ​ 64,055 Thereafter ​ ​ 249,220 ​ ​ 803,928 Total minimum lease obligations ​ ​ 519,609 ​ ​ 1,132,152 Less—amounts representing interest ​ ​ ( 170,162 ) ​ ​ ( 526,995 ) Present value of minimum lease obligations ​ ​ 349,447 ​ ​ 605,157 Current maturities ​ ​ ( 50,932 ) ​ ​ ( 26,523 ) Lease obligations, net of current maturities ​ $ 298,515 ​ $ 578,634 ​ Page 18 of 58 Table of Contents Allowance for credit losses The Company estimates credit losses expected over the life of its trade receivables based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables. Based on the Company’s experience, the customer’s delinquency status is the strongest indicator of the credit quality of the underlying trade receivables, which is analyzed monthly. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period ​ ​ ​ ​ ​ ​ ​ ​ Provision for ​ Write offs ​ ​ ​ ​ ​ Beginning ​ Expected Credit ​ Charged Against ​ Ending Description ​ Balance ​ Losses ​ Allowance ​ Balance Allowance for credit losses (deducted from accounts receivable) (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Three months ended June 30, 2025 ​ $ 9,193 ​ $ 651 ​ $ ( 1,454 ) ​ $ 8,390 Three months ended June 30, 2024 ​ ​ 5,588 ​ ​ 2,920 ​ ​ ( 2,126 ) ​ ​ 6,382 Six months ended June 30, 2025 ​ ​ 9,762 ​ ​ 4,702 ​ ​ ( 6,074 ) ​ ​ 8,390 Six months ended June 30, 2024 ​ ​ 3,677 ​ ​ 5,514 ​ ​ ( 2,809 ) ​ ​ 6,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Three Months Six Months Six Months ​ ​ Ended ​ Ended ​ Ended ​ Ended (in thousands) ​ June 30, 2025 ​ June 30, 2024 ​ June 30, 2025 ​ June 30, 2024 Net bad debt expense ​ $ 651 ​ $ 2,920 ​ $ 4,702 ​ $ 5,514 Bad debt recoveries ​ 646 ​ ​ 828 ​ ​ 2,633 ​ ​ 1,125 ​ Accounting Standards Not Yet Adopted In December 2023, the FASB issued Accounting Standards Update (“ASU 2023-09”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , 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. In November 2024, the FASB issued ASU 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. ​ 2. Property and equipment: Depreciation and amortization expense related to property and equipment and finance leases and capitalized compensation costs of employees directly involved with construction activities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Three Months Six Months Six Months ​ ​ Ended ​ Ended ​ Ended ​ Ended (in thousands) ​ June 30, 2025 ​ June 30, 2024 ​ June 30, 2025 ​ June 30, 2024 Depreciation and amortization expense ​ $ 74,846 ​ $ 74,065 ​ $ 150,439 ​ $ 144,907 Capitalized compensation cost ​ 11,201 ​ ​ 11,232 ​ ​ 22,445 ​ ​ 22,929 ​ Page 19 of 58 Table of Contents 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. ​ 3. Long-term debt: As of June 30, 2025, the Company had outstanding the following long-term debt obligations; ● $ 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, ● $ 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. o The Existing 2024 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 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 in June 2022, are due on June 15, 2027, and bear interest at a rate of 7.00 % per year. Interest on the 2027 Mirror Notes and 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 On June 17, 2025 (the “2032 Notes Closing Date”), Group and Cogent Finance, Inc. (the “Co-Issuer” and, together with Group, the “Issuers”), two wholly owned subsidiaries of the Company, completed an offering of $ 600.0 million aggregate principal amount of 2032 Notes for issuance in a private placement not registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The 2032 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. Page 20 of 58 Table of Contents 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. 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 2032 Notes were issued pursuant to, and are governed by, an indenture, dated June 17, 2025 (the “2032 Notes Indenture”), among the Issuers, the Company, the other guarantors named therein and Wilmington Trust, National Association, as trustee and collateral agent. The 2032 Notes are jointly and severally guaranteed (the “2032 Notes Subsidiary Guarantees”) on a senior secured basis by each of Group’s existing and future material domestic subsidiaries (other than the Co-Issuer), subject to certain exceptions (collectively, the “2032 Notes Subsidiary Guarantors”). In addition, the 2032 Notes are guaranteed (together with the 2032 Notes Subsidiary Guarantees, the “Guarantees”) on a senior unsecured basis by the Company (together with the 2032 Notes Subsidiary Guarantors, the “Guarantors”). However, the Company is not subject to the covenants under the 2032 Notes Indenture. Under certain circumstances, the 2032 Notes Guarantors may be released from these 2032 Notes Guarantees without the consent of the holders of the 2032 Notes. The 2032 Notes and the 2032 Notes Subsidiary Guarantees are the Issuers’ and the 2032 Notes Subsidiary Guarantors’ senior secured obligations, secured by a first-priority lien on substantially all of the Issuers’ and the 2032 Notes Subsidiary Guarantors’ assets, subject to certain exceptions, exclusions, limitations and permitted liens. 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 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). The Company’s guarantee is its senior unsecured obligation and is effectively subordinated to the Company’s secured indebtedness to the extent of the value of the collateral securing such indebtedness. Without giving effect to collateral arrangements, the Company’s guarantee ranks pari passu in right of payment with all of the Company’s existing and future senior indebtedness, including its guarantee of the Existing Unsecured 2027 Notes, and contractually senior in right of payment to all of the Company’s future subordinated indebtedness. 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. The 2032 Notes bear interest at a rate of 6.50 % per annum. Interest began to accrue on the 2032 Notes on June 17, 2025 and will be paid semi-annually in arrears on January 1 and July 1 of each year, commencing January 1, 2026, to the persons who are registered holders of the 2032 Notes at the close of business on the December 15 or June 15 immediately preceding the applicable interest payment date. Unless earlier redeemed or repurchased, the 2032 Notes will mature on July 1, 2032. The Issuers may redeem some or all of the 2032 Notes at any time prior to July 1, 2028 at a price equal to 100 % of the principal amount of the 2032 Notes, plus a “make-whole” premium as set forth in the 2032 Notes Indenture, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Issuers may also redeem up to 40 % of the principal amount of the 2032 Notes using proceeds of certain equity offerings completed prior to July 1, 2028 at a redemption price equal to 106.500 %, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption, subject to certain exceptions. Thereafter, the Issuers may redeem the 2032 Notes, in whole or in part, at a redemption price ranging from 103.250 % of the aggregate principal amount of the 2032 Notes redeemed to par (depending on the year), in each case, as set forth in the 2032 Notes Indenture, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Page 21 of 58 Table of Contents If Group undergoes specific kinds of changes in control accompanied by certain ratings events, the Issuers will be required to offer to repurchase the 2032 Notes from holders at a price equal to 101.0 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. 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 2032 Notes at an offer price in cash equal to 100.0 % of the principal amount of the 2032 Notes, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. In connection with any offer to purchase all or any of the 2032 Notes (including a change of control offer, asset sale offer or any tender offer), if holders of not less than 90.0 % of the aggregate principal amount of the outstanding 2032 Notes validly tender their 2032 Notes, the Issuers or a third party are entitled to redeem any remaining 2032 Notes at the price paid to each holder. The 2032 Notes Indenture includes covenants that restrict Group and its restricted subsidiaries’ (including the Co-Issuer’s) ability to, among other things: ● incur indebtedness; ● issue certain preferred stock or similar equity securities; ● pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; ● make certain investments and other restricted payments, such as prepayment, redemption or repurchase of certain subordinated indebtedness; ● 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; ● incur restrictions on the ability of a restricted subsidiary to pay dividends or make other payments; and ● enter into transactions with affiliates. However, the covenants provide for certain exceptions to these restrictions, and neither the Company nor any subsidiary of the Company that is not Group or a subsidiary of Group is subject to the covenants under the 2032 Notes Indenture. Certain covenants will cease to apply to the 2032 Notes if, and for so long as, the 2032 Notes have investment grade ratings from any two of Moody’s Investors Service, Inc., Fitch Ratings, Inc. and S&P Global Ratings and so long as no default or event of default under the 2032 Notes Indenture has occurred and is continuing. 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. 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. Events of default include the following with respect to the Issuers and Group’s significant subsidiaries: (i) failure to pay principal, premium or interest at required times; (ii) failure to comply with any other agreements in the Indenture; (iii) default on certain material indebtedness that is caused by a failure to make a payment within any applicable grace period when due at maturity or results in the acceleration of such indebtedness prior to its express maturity; (iv) failure to pay certain material judgments; (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; (vi) certain events of bankruptcy or insolvency; 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. Page 22 of 58 Table of Contents 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. 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 net proceeds will 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). 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). The IPv4 Base Indenture allows the IPv4 Issuer to issue additional series of notes subject to certain conditions set forth therein, and the IPv4 Base Indenture, together with the Series 2024-1 Supplement thereto (as defined below) and the Series 2025-1 Supplement, and any other series supplements to the IPv4 Base Indenture, is referred to as the “IPv4 Notes Indenture.” Under the IPv4 Notes Indenture, interest is paid on a monthly basis. From and after the monthly payment date in April of 2030, principal payments will also be required to be made on the New IPv4 Notes on a monthly basis. No principal payments will be due on the New IPv4 Notes prior to the monthly payment date in April of 2030, unless certain rapid amortization, mandatory prepayment or acceleration events occur. The legal final maturity date of the New IPv4 Notes is in April of 2055 . If the IPv4 Issuer has not repaid or refinanced any New IPv4 Notes prior to the monthly payment date in April of 2030, additional interest will accrue thereon in an amount equal to the greater of (i) 5.0 % per annum and (ii) the excess amount, if any, by which the sum of the following exceeds the interest rate for such New IPv4 Notes: (A) the yield to maturity (adjusted to a “mortgage-equivalent basis” pursuant to the standards and practices of the Securities Industry and Financial Markets Association) on the monthly payment date in April of 2030 of the United States Treasury Security having a remaining term closest to 10 years; plus (B) 5.0 %; plus (C) the post-anticipated repayment date note spread of 3.00 % applicable to such New IPv4 Notes. In connection with the issuance of the New IPv4 Notes, the IPv4 Issuer obtained consents from noteholders representing more than 50 % of the Voting Rights (as defined in the IPv4 Base Indenture) of the Existing IPv4 Notes to adopt amendments to the IPv4 Base Indenture to, among other things, permit the IPv4 Issuer to (i) issue additional Class A Notes (as defined in the IPv4 Base Indenture) (provided that the Class A Leverage Ratio (as defined in the IPv4 Base Indenture) is less than or equal to 7.25 to 1.00 ) (as opposed to 6.10 to 1.00 under the Base Indenture as previously in effect), (ii) dispose of IPv4 addresses owned by the IPv4 Issuer (provided that the pro forma Leverage Ratio (as defined in the IPv4 Base Indenture) is less than or equal to 7.25 to 1.00 ) (as opposed to the greater of (x) 7.10 to 1.00 and (y) the Leverage Ratio as of the date of the most recent issuance of Additional Notes (as defined in the IPv4 Base Indenture) (after giving effect to the issuance of such Additional Notes) under the IPv4 Base Indenture as previously in effect) and (iii) substitute new IPv4 addresses (including Non-Contributed IP Addresses (as defined in the IPv4 Base Indenture)) to be owned by the IPv4 Issuer for the Contributed IP Addresses then owned by the IPv4 Issuer (provided that the pro forma Leverage Ratio is not greater than 7.25 to 1.00 ) (as opposed to 6.10 to 1.00 under the IPv4 Base Indenture as previously in effect), in each case, among other applicable requirements (collectively, the “Amendments”). 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. The net proceeds from the offering, after debt offering costs, were $ 198.4 million. 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”). The IPv4 Base Indenture allows the IPv4 Issuer to issue additional series of notes subject to certain conditions set forth therein. The Existing IPv4 Notes were issued as part of a securitization transaction, pursuant to which certain IPv4 addresses, customer IPv4 address leases, customer accounts receivable and other IPv4 address assets (collectively, “IPv4 Address Assets”) were Page 23 of 58 Table of Contents contributed to the IPv4 Issuer and are included as collateral for the Existing IPv4 Notes. While the Existing IPv4 Notes are outstanding, scheduled payments of interest are required to be made on a monthly basis. From and after the monthly payment date in May of 2029, principal payments will also be required to be made on the Existing IPv4 Notes on a monthly basis. No principal payments will be due on the Existing IPv4 Notes prior to the monthly payment date in May of 2029, unless certain rapid amortization, mandatory prepayment or acceleration events occur. The legal final maturity date of the Existing IPv4 Notes is in May of 2054 . If the IPv4 Issuer has not repaid or refinanced the Existing IPv4 Notes prior to the monthly payment date in May of 2029, additional interest will accrue thereon in an amount equal to the greater of (i) 5.0 % per annum and (ii) the excess amount, if any, by which the sum of the following exceeds the interest rate for such Existing IPv4 Note: (A) the yield to maturity (adjusted to a “mortgage-equivalent basis” pursuant to the standards and practices of the Securities Industry and Financial Markets Association) on the monthly payment date in May of 2029 of the United States Treasury Security having a remaining term closest to 10 years; plus (B) 5.0 %; plus (C) the post-anticipated repayment date note spread of 3.400 % applicable to such Existing IPv4 Note. IPv4 Notes collateral, guaranty, covenants and restrictions The IPv4 Notes are obligations only of the IPv4 Issuer pursuant to the indenture (the “IPv4 Notes Indenture”), and are secured by a security interest in substantially all of the IPv4 Address Assets pursuant to the IPv4 Notes Indenture. The IPv4 Notes are guaranteed by Cogent IPv4 Holdco LLC, a special-purpose entity and an indirect wholly owned subsidiary of the Company, as the guarantor (in such capacity, the “IPv4 Guarantor”), pursuant to a guaranty, dated as of May 2, 2024 (the “Guaranty”) by the IPv4 Guarantor in favor of the IPv4 Trustee pursuant to which the IPv4 Guarantor has granted a security interest in the equity interests of the IPv4 Issuer as collateral security for its obligations under the Guaranty. Except as described below, neither the Company nor any subsidiary of the Company, other than the IPv4 Issuer and the IPv4 Guarantor, will guarantee or in any way be liable for the obligations of the IPv4 Issuer under the IPv4 Notes Indenture or the IPv4 Notes. The IPv4 Notes are subject to a series of covenants and restrictions customary for transactions of this type. These covenants and restrictions include (i) that the IPv4 Issuer maintains a liquidity reserve account to be used to make required payments in respect of the IPv4 Notes with such funds considered restricted cash, (ii) provisions relating to optional and mandatory prepayments, including specified make-whole payments in the case of certain optional prepayments of the IPv4 Notes prior to the monthly payment date in May of 2028, (iii) certain indemnification payments in the event, among other things, that the transfers of the assets pledged as collateral for the IPv4 Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. As provided in the IPv4 Base Indenture, the IPv4 Notes are also subject to rapid amortization in the event of a failure to maintain a stated debt service coverage ratio as defined in the IPv4 Notes Indenture. A rapid amortization may be cured if the debt service coverage ratio exceeds a certain threshold for a certain period of time, upon which cure, regular amortization, if any, will resume. In addition, if certain utilization thresholds are not met (i.e., the proportion of IP addresses which are leased to the total number of IP addresses owned by the IPv4 Issuer falls below certain thresholds), the IPv4 Issuer will be required to apply collections to the repayment of the IPv4 Notes and in certain circumstances, the noteholders will have the ability to direct a sale of the IP Address Assets, in whole or in part, pursuant to the terms set forth in the IPv4 Notes Indenture. The IPv4 Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the IPv4 Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective and certain judgments. IPv4 Notes manager Cogent Communications, LLC (in such capacity, the “Manager”) performs certain monthly services related to the IPv4 Address Assets and the $ 380.4 million of IPv4 Notes including billing customers, collecting amounts paid by customers, forwarding payments to the IPv4 Trustee related to the IPv4 Address Assets and other administrative services. Amounts received by the IPv4 Issuer in respect of collections on the IPv4 Address Assets are reconciled on a monthly basis, and the IPv4 Issuer pays the monthly interest on the IPv4 Notes and other expenses from the accumulated customer payments on the IPv4 Address Assets. 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. Page 24 of 58 Table of Contents 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. 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. persons in transactions outside the United States in compliance with Regulation S under the Securities Act. The 2027 Mirror Notes have the same maturity date and call protection, bear interest at the same rate and otherwise have substantially the same terms as the 2027 Notes; however, the 2027 Mirror Notes are not fungible (from a trading or tax perspective) with the 2027 Notes and are a separate series of notes from the 2027 Notes. The 2027 Mirror Notes were issued at a price equal to 98.50 % of their face value. 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”). 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. 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 . 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. If Group undergoes specific kinds of changes in control accompanied by certain ratings events, the Issuers will be required to offer to repurchase the 2027 Mirror Notes from holders at a price equal to 101.0 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. 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 100.0 % 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. The 2027 Mirror Notes Indenture includes covenants that restrict Group and its restricted subsidiaries’ (including the Co-Issuer’s) ability to, among other things: incur indebtedness; issue certain preferred stock or similar equity securities; pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; make certain investments and other restricted payments, Page 25 of 58 Table of Contents such as prepayment, redemption or repurchase of certain indebtedness; create liens; 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 subsidiary to pay dividends or make other payments; and 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. Certain covenants will cease to apply to the 2027 Mirror Notes if, and for so long as, the 2027 Mirror Notes have investment grade ratings from any two of Moody’s Investors Service, Inc., Fitch Ratings, Inc. 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. Events of default include the following with respect to the Issuers and Group’s significant subsidiaries: (i) failure to pay principal, premium or interest at required times; (ii) failure to comply with any other agreements in the 2027 Mirror Notes Indenture; (iii) default on certain material indebtedness that is caused by a failure to make a payment within any applicable grace period when due at maturity or results in the acceleration of such indebtedness prior to its express maturity; (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; and (vi) certain events of bankruptcy or insolvency. Limitations under the Indentures The indentures governing the 2032 Notes, the 2027 Notes, and the 2027 Mirror Notes (collectively, the “Indentures”), among other things, limit the ability of Group and its restricted subsidiaries to incur indebtedness; issue certain preferred stock or similar equity securities; pay dividends or make other distributions; make certain investments and other restricted payments; create liens; consolidate, merge, sell or otherwise dispose of all or substantially all of its properties and assets; incur restrictions on the ability of a subsidiary to pay dividends or make other payments; and enter into certain transactions with its affiliates. There are certain exceptions to the limitations on the ability to incur indebtedness under the Indentures, including IRU agreements incurred in the normal course of business and any additional indebtedness if Group’s consolidated leverage ratio, as defined in the Indentures, is less than 6.0 to 1.0 or Group’s fixed charge coverage ratio, as defined in the Indentures, is 2.0 to 1.0 or greater. Group and its subsidiaries can also incur unlimited liens (which can be used, together with capacity under the debt covenant, to incur additional secured indebtedness) if Group’s consolidated secured leverage ratio, as defined in the Indentures, is less than 4.0 to 1.0 . 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 June 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 above 6.0 to 1.00 , ● Group’s consolidated secured leverage ratio was above 4.0 , and ● Group’s fixed charge coverage ratio was above 2.0 . As of June 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.) ● Group’s consolidated leverage ratio was below 6.0 to 1.00 , ● Group’s consolidated secured leverage ratio was below 4.0 , and Page 26 of 58 Table of Contents ● Group’s fixed charge coverage ratio was above 2.0 . As of June 30, 2025, a total of $ 295.6 million was unrestricted and permitted for restricted payments, including dividends and stock purchases. Interest rate swap agreement As of June 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 June 30, 2025, the fair value of the Swap Agreement was a net liability of $ 13.6 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 June 30, 2025, the Company has made a $ 13.8 million deposit with the counterparty to the Swap Agreement. If the fair value of the Swap Agreement exceeds a net liability of $ 13.8 million, the Company will be required to deposit additional funds with the counterparty equal to the net liability fair value. As of June 30, 2025, $ 13.6 million of the deposit was restricted and $ 0.2 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. ​ 4. Commitments and contingencies : Current and potential litigation In accordance with the accounting guidance for contingencies, the Company accrues its estimate of a contingent liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Where it is probable that a liability has been incurred and there is a range of expected loss for which no amount in the range is more likely than any other amount, the Company accrues at the low end of the range. 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 $ 4.4 million in excess of the amount accrued at June 30, 2025. In the ordinary course of business, the Company is involved in other legal activities and claims. Because such matters are subject to many uncertainties and the outcomes are not predictable with assurance, the liability related to these legal actions and claims cannot be determined with certainty. Management does not believe that such claims and actions will have a material impact on the Company’s financial condition or results of operations. Judgment is required in estimating the ultimate outcome of any dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiations or settle any litigation. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material. Page 27 of 58 Table of Contents ​ 5. Income taxes: The components of loss before income taxes consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Three Months Ended Six Months Ended Six Months Ended ​ June 30, 2025 ​ June 30, 2024 ​ June 30, 2025 ​ June 30, 2024 Domestic ​ $ ( 73,645 ) ​ $ ( 37,199 ) ​ $ ( 136,219 ) ​ $ ( 116,203 ) Foreign ​ ​ ( 880 ) ​ ​ ( 2,992 ) ​ ​ ( 8,569 ) ​ ​ ( 8,422 ) Total ​ $ ( 74,525 ) ​ $ ( 40,191 ) ​ $ ( 144,788 ) ​ $ ( 124,625 ) ​ On July 4, 2025, H. R. 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. ● Modifications to the GILTI regime, now referred to as Net CFC Tested Income (“NCTI”), including the elimination of the deemed 10% on QBAI and reduction in the Section 250 deduction. ● Replacement of FDII with a new Foreign Derived Domestic Eligible Income (“FDDEI”) regime, modifying the deduction rate and simplifying the overall calculation. Under ASC 740, the income tax effects of the 2025 Tax Act will be recognized in the period of enactment. The Company expects the 2025 Tax Act to affect the valuation of certain of its deferred income taxes – a total net deferred income tax liability of $ 362.5 million at June 30, 2025. The Company is in the process quantifying this impact that will be recorded in the third quarter of 2025. ​ 6. 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, 2025. 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 second quarter of 2025, the Company purchased 229,507 shares of its common stock for $ 11.5 million at an average price of $ 50.18 per share under its Buyback Program. In July 2025, the Company purchased an additional 63,487 shares of its common stock for $ 3.1 million at an average price of $ 48.13 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 July 31, 2025, there was $ 107.9 million available under the Buyback Program. ​ 7. Dividends on common stock: On August 6, 2025 , the Company’s Board of Directors approved the payment of a quarterly dividend of $ 1.015 per share of common stock. This estimated $ 48.4 million dividend payment is expected to be made on September 5, 2025 . 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. The Company is a Delaware corporation and under the General Corporation Law of the State of Delaware, distributions may be restricted including a restriction that distributions, including stock Page 28 of 58 Table of Contents purchases and dividends, do not result in an impairment of a corporation’s capital, as defined under Delaware law. The Indentures limit the Company’s ability to return cash to its stockholders. ​ 8. Related party transactions: Office leases The Audit Committee of the Company’s Board of Directors (the “Audit Committee”) reviews and approves all transactions with related parties. 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. The fixed annual rent for the headquarters building is $ 1.0 million per year plus an allocation of taxes and utilities. The lease began in May 2015, and the lease term was for five years . In February 2020, the lease term was extended to May 2025 and in March 2025 the lease was extended to May 2030. The lease is cancellable at no cost by the Company upon 60 days ’ notice. On January 6, 2023, the Company entered into two lease agreements (the “New Leases”), one with Thorium LLC (“Thorium”) and one with Germanium LLC (“Germanium”), entities owned by the Company’s Chief Executive Officer and Chairman, David Schaeffer. The first of the New Leases is with Thorium for 54,803 square feet of office space, which serves as office space for the Company replacing a portion of its office space in the Northern Virginia area (“Office Lease”). The second of the New Leases is with Germanium LLC for 1,587 square feet of technical space which serves as network operations space for the Company (“Network Operations Lease”). The term for each of the New Leases is five years beginning on April 1, 2023. 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. The amount of fixed annual rent during the term of the Office Lease is $ 1.2 million, and the Company is responsible for paying its proportionate share of the building’s operating expenses that exceed a 2023 base year. The amount of fixed annual rent for the Network Operations Lease is $ 34,914 , and the Company is also responsible for paying its metered utility costs and a proportionate share of the building’s other operating expenses that exceed a 2023 base year. On July 25, 2023, the Company entered into a Second Amendment to the lease agreement with Germanium (the “Amendment”), which amended the Network Operations Lease to lease an additional 7,369 square feet on the first floor of the building, beginning on August 1, 2023, in connection with the planned expansion of the technical space. This included 4,987 square feet for an auditorium suitable for training and 2,382 square feet for the data center in the building. The amended Network Operations Lease remains cancellable by the Company without penalty upon 60 days written notice. 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 $ 0.8 million and $ 0.9 million in the three months ended June 30, 2025 and 2024, respectively, and $ 1.6 million and $ 1.6 million in the six months ended June 30, 2025 and 2024, respectively, for rent and related costs (including taxes and utilities) for these leases. ​ 9. 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 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. Page 29 of 58 Table of Contents Revenues are attributed to regions based on where the services are provided. 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 June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues On-net Off-net Wavelength Non-core Total North America ​ $ 100,102 ​ $ 95,842 ​ $ 8,814 ​ $ 2,605 ​ $ 207,363 Europe ​ 25,174 ​ ​ 5,087 ​ ​ 231 ​ ​ 54 ​ ​ 30,546 South America ​ ​ 1,889 ​ ​ 207 ​ ​ — ​ ​ 8 ​ ​ 2,104 Oceania ​ ​ 5,038 ​ ​ 1,016 ​ ​ 12 ​ ​ 15 ​ ​ 6,081 Africa ​ ​ 128 ​ ​ 25 ​ ​ — ​ ​ — ​ ​ 153 Total ​ $ 132,331 ​ $ 102,177 ​ $ 9,057 ​ $ 2,682 ​ $ 246,247 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues On-net Off-net Wavelength Non-core Total North America ​ $ 111,360 ​ $ 104,734 ​ $ 3,625 ​ $ 4,468 ​ $ 224,187 Europe ​ ​ 23,142 ​ ​ 5,220 ​ ​ — ​ ​ 104 ​ ​ 28,466 South America ​ ​ 1,721 ​ ​ 221 ​ ​ — ​ ​ 17 ​ ​ 1,959 Oceania ​ ​ 4,395 ​ ​ 1,252 ​ ​ — ​ ​ 21 ​ ​ 5,668 Africa ​ ​ 139 ​ ​ 24 ​ ​ — ​ ​ — ​ ​ 163 Total ​ $ 140,757 ​ $ 111,451 ​ $ 3,625 ​ $ 4,610 ​ $ 260,443 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues On-net Off-net Wavelength Non-core Total North America ​ $ 199,183 ​ $ 196,862 ​ $ 15,705 ​ $ 5,544 ​ $ 417,294 Europe ​ ​ 48,943 ​ ​ 10,049 ​ ​ 447 ​ ​ 106 ​ ​ 59,545 South America ​ ​ 3,652 ​ ​ 415 ​ ​ — ​ ​ 17 ​ ​ 4,084 Oceania ​ ​ 9,943 ​ ​ 2,075 ​ ​ 23 ​ ​ 43 ​ ​ 12,084 Africa ​ ​ 240 ​ ​ 51 ​ ​ — ​ ​ — ​ ​ 291 Total ​ $ 261,961 ​ $ 209,452 ​ $ 16,175 ​ $ 5,710 ​ $ 493,298 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues On-net Off-net Wavelength Non-core Total North America ​ $ 220,054 ​ $ 215,753 ​ $ 6,952 ​ $ 10,348 ​ $ 453,107 Europe ​ ​ 46,783 ​ ​ 10,559 ​ ​ — ​ ​ 225 ​ ​ 57,567 South America ​ ​ 3,469 ​ ​ 456 ​ ​ — ​ ​ 26 ​ ​ 3,951 Oceania ​ ​ 8,776 ​ ​ 2,812 ​ ​ — ​ ​ 52 ​ ​ 11,640 Africa ​ ​ 300 ​ ​ 48 ​ ​ — ​ ​ — ​ ​ 348 Total ​ $ 279,382 ​ $ 229,628 ​ $ 6,952 ​ $ 10,651 ​ $ 526,613 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 Long-lived assets, net ​ ​ ​ ​ ​ ​ North America ​ $ 1,590,434 ​ $ 1,579,495 Europe and other ​ 190,584 ​ ​ 158,854 Total ​ $ 1,781,018 ​ $ 1,738,349 ​ The majority of North American revenue consists of services delivered within the United States. ​ Page 30 of 58 Table of Contents