CCOI 10-K & 10-Q changes, risk factors and insider trading

A downturn in the world economy, especially the economies of North America and Europe, would negatively impact our growth. Our net-centric business would be particularly impacted by a decline in the development of new Internet-based applications and Page 17 of 104 businesses that make use of the Internet. Our corporate business would be particularly impacted by an increase in vacancy rates in the MTOBs that we serve. OurGrowth totalin revenueour growthIP-transit segment is predicated on growth in the use of the Internet thatto makes up foroffset the declining prices of Internet service. An economic downturn could impact the Internet business more significantly than other businesses that are less dependent on new Internet-based applications and growth in the use of those applications and less susceptible to increases in office vacancy rates resulting from the retrenchment by consumers and businesses that typically occurs in an economic downturn.

Our historicalHistorical reductions in our prices are expected to continue in an inflationary economy even as our costs may increase.

Many of the regions in which we operate continue to experience an increase in or elevated inflation rates. Due to the nature of our product offerings and the industry in which we operate, which is deflationary, we may be unable to raise our prices. We expect that our historical pricing patterns will continue for the foreseeable future. Additionally, we may be unable to achieve the sales volume necessary to compensate for price reductions, which may adversely impact our revenue growth.

These historical pricing patterns are occurring against the backdrop of a general increase in prices due to inflation. In particular, the cost of electricity has increased greatly in all countries where we purchase power. WhileWhile, in certain cases, we have negotiated contracts that cap price increases due to inflation or that have fixed the price of electricity, we have experienced and may continue to experience increases in the costs of electricity and other services that we cannot pass on to our customers or may only be able to pass on partially to our customers. If these price increases continue, this may impact our profitability.

Catastrophic events, such as major natural disasters, extreme weather,weather events (including those exacerbated by climate change), fire, flooding, pandemicspublic health crises such as the COVID-19 pandemic or similar events as well as the continued threat of terrorist activity and other acts of war or hostility have had, and may continue to have, an adverse effect on our headquarters, other offices, our network,networks, infrastructure or equipment or our customers and prospective customers, which could adversely affect our business. These events may also have an adverse impact on business, financial and general economic conditions around the world. We have certain locations through which a large amount of our Internet traffic passes. Examples are facilities in which we exchange traffic with other carriers, the facilities through which our transoceanic traffic passes, and certain of our network hub sites. We also rely on third-party data centers and service providers in these regions whose own disaster recovery capabilities are beyond our control. We are particularly vulnerable to acts of terrorism because our largest customer concentration is Page 15 of 96 located in New York, our headquarters is located in Washington, D.C., and we have significant operations in Paris, Madrid and London, cities that have historically been targets for terrorist attacks and may be vulnerable to pandemics.extreme weather and public health crises.

If these or any other of our key facilities or those of our critical third-party providers were destroyed or seriously damaged, a significant amount of our network traffic could be disrupted. Because of the large volume of traffic passing through these facilities our ability (and the ability of carriers with whom we exchange traffic) to quickly restore service would be challenged. There could be parts of our networknetworks or the networks of other carriers that could not be quickly restored or that would experience substantially reduced service for a significant time. Such disruptions may also increase our vulnerability to cybersecurity attacks, further complicating recovery efforts. If such a disruption occurs, our reputation could be negatively impacted, which may cause us to lose customers and adversely affect our ability to attract new customers, resulting in an adverse effect on our business and operating results. While we maintain business continuity plans and insurance coverage, these measures may not be sufficient to fully mitigate the financial or operational impact of such events.

Risks Relating to Our Acquisition of the SprintCogent Fiber Business

We may not realize the anticipated benefits of the acquisition of the SprintCogent Fiber Business, and the integration of the SprintCogent Fiber Business may disrupt our business and management.

The success of our acquisition of the SprintCogent Fiber Business, including the realization of anticipated benefits and cost savings, will depend,depends, in part, on our ability to successfully combine the operations of Cogent Fiber Business with our business and the Sprint Business.business. The integration has been and may continue to be more difficult, costly or time consuming than expected. The integration process involves numerous risks.risks, These risks includeincluding:

If we experience difficulties during the integration process and are unable to integrate the Sprint Business successfully or in a timely manner,process, we may not realize the benefits of the Transaction to the extent anticipated. These integration matters could have an adverse effect on usour business during the transition period and on the combined company for an undetermined period after completion of the Transaction.completion.

We need to retain profitable existing customers and continue to add new customers in order to become consistently profitable and cash flow positive.

In order to be consistently profitable and consistently cash flow positive, we need to both retain existing profitable customers and continue to add a large number of new customers. The precise number of additional customers required is dependent on a number of factors, including the turnover of existing customers, the pricing of our product offerings and the revenue mix among our customers. We may not succeed in adding customers if our sales and marketing efforts are unsuccessful. In addition, many of our targeted customers are businesses that are already purchasing Internet accessthe services we offer from one or more providers, often under a contractual commitment. It has been our experience that such targeted customers are often reluctant to switch providers due to costs and effort associated with Page 19 of 104 switching providers. Further, as some of our customers grow larger, they may decide to build their own Internettelecommunications backbone networks or enter into direct connection agreements with telephone and cable companies that provide Internet service to consumers.consumers or to lease dark fiber in lieu of purchasing optical wavelength services. A migration of a few very large Internet userscustomers to their own networks, or to closed networks that may be offered by major telephone and cable providers of last mile broadband connections to consumers, or the loss or reduced purchases from several significant customers could impair our growth, cash flow and profitability.

We have customers who depend on the U.S. government’s E-rate program for funding. There can be no assurance that the E-rate program will continue or that other governmental programs that fund governments and organizations that are or might become customers will continue. AAny failureexpiration, reduction or restructuring of such programs to continue could result in a loss of customers and impair our growth, cash flow and profitability.

ThroughIn muchrecent of 2022, 2023, and 2024,years, we saw corporate customers continue their remote work policies and take a cautious approach to adding new services and upgrades,upgrades to existing services, as well as a reduced demand for connecting smaller satellite offices. We also witnessed a deteriorating real estate market in and around the buildings we service, with rising vacancy levels and falling lease initiations or renewals resulting in fewer sales opportunities for our salesforce. As a result, we experienced a slowdown in new sales to our corporate customers which negatively impacted our corporate revenue growth. If a significant number of our corporate customers or potential customers decide to retain remote work policies, we may experience increased customer turnover, fewer upgrades of existing customer configurations and fewer new tenant opportunities. These trends may negatively impact our revenue growth, cash flows and profitability. As the option to fully or partially work from home becomes permanently established at many companies, our corporate customers are integrating some of the new Internet-based applications that became part of the remote work environment. However, the exact timing and path of these trends remains uncertain, potentially increasing the current adverse impact on our business for an extended period.

During the COVID-19 pandemic, we saw increasing vacancy rates in many of our buildings due to higher lease terminations and lower leasing activity. Throughout the year ended December 31, 2024,2025, we observed a gradual reduction in vacancy rates and an upward trend in office occupancy rates in certain markets but elevated vacancy rates remain in a number of markets, predominantly in California, Washington D.C. and the Pacific Northwest. Concurrently, there were encouraging developments in our corporate business. Despite these positive indicators, the precise timing and trajectory of these trends remain uncertain. The lingering effects of the pandemic introduce an element of unpredictability, and weWe may continue to see increased corporate customer turnover, fewer upgrades of existing corporate customer configurations and fewer new tenant opportunities, which would negatively affect our corporate revenue growth. The elimination of non-core and low margin products also has a negative impact on our corporate revenue results.

We have grown our Company rapidly through networkexpansion expansion,of byour IP Network, obtaining new customers through our sales effortsefforts, and by ourthe acquisition of the SprintCogent Business.Fiber Business and the expansion of our Optical Wave Network. Our expansion places significant strains on our management, operational and financial infrastructure. Our ability to manage our growth will be particularly dependent upon our ability to:

In connection with the acquisition of the SprintCogent Fiber Business, we acquired an enterprise customer base, a type of customer that we have not traditionally served. WeTo havemanage this transition, we established ana dedicated enterprise sales team within our sales force to focusfocused on retaining these customers and attracting new enterprise customers. Beginning in 2026, we merged our enterprise sales team into our retention team to streamline operations and maximize the preservation of this revenue base. The retention team is specifically tasked with maintaining existing customer relationships and servicing those clients to ensure long-term stability. Enterprise customers differ from our existingtraditional corporate and net-centric customers in that they typically have larger, more geographically diverse operations that require a greater percentage of off-net services from us. In addition, enterprise customers are more likely to require customized solutions and processes and to look forprefer a single provider to meet all of their connectivity needs. A number of our acquired enterprise customers purchased non-core services that we arehave in the process of eliminating,eliminated, and this may cause such customers to look to other providers who offer a broader set of services. We may encounter difficulties retaining such customers, in converting such customers from their legacy services to newer technologies or in attracting new enterprise customers. Our inability to retain or attract such customers or to convert them to our services, could impairadversely affect our growth, cash flow and profitability. The elimination of non-core and low marginlow-margin products also has a negative impact on our enterprise revenue results.

In the fall of 2021, we began to implement an in-office worka policy designed to return the vast majority of our employees to anthe in-office work environment.office. Except for a brief return to remote work at the beginning of 2022 for a portion of our workforce, we have, withlargely the exception ofmaintained a limitedfull-time, numberin-office ofrequirement. employeesThis whopolicy becomeled eligible for hybrid work on a quarterly basis, maintained our requirement that all employees work in our offices wherever possible. Ato small minority of our workforce declined to return to full-time in-office employment and leftleaving our employment. WeFurther, we are experiencing modest competitive challenges versusas someother competitorscompanies who are offering some employees aoffer hybrid or fully remote work option.options. Increasing and/or continued demands to work in a hybrid or fully remote work style may reduce our ability to attract and retain employees, in particular attracting and retaining salespeople.

As part of our growth strategy, we may pursue selected acquisitions and strategic alliances. To date, we have completed 14 significant acquisitions, including our recent acquisition of the SprintCogent Business.Fiber Business in 2023. However, we are very selective with respect to such acquisitions and alliances and, prior to the acquisition of the SprintCogent Fiber Business, we had not undertaken either for more than 17 years. We compete with other companies for acquisition opportunities and we cannot assure you that we will be able to execute future acquisitions or strategic alliances on commercially reasonable terms, or at all. Even if we enter into these transactions, we may experience:

In the past, our acquisitions have often included assets, service offerings and financial obligations that are not compatible with our core business strategy. We have expended management attention and other resources to the divestiture of assets, modification of Page 21 of 104 products and systems as well as restructuring financial obligations of acquired operations. In most acquisitions, we have been successful in renegotiating the agreements that we have acquired. IfHowever, if we are unable to satisfactorily renegotiate such agreements in the future or with respect to future acquisitions, we may be exposed to large claims for payment for services and facilities we do not need.

To sustain our growth in various existing and emerging markets, we may need to expand an existing data center, lease a new facility, or acquire suitable land, with or without existing structures. Following the acquisition of the SprintCogent Fiber Business, we embarked on the conversion of Sprint facilities into data centers suitable for either wholesale lease or sale – of which 2352 are wholesale facilities and 5587 are edge data center facilities. Undertaking such projects exposes us to numerous risksrisks, including increased capital spending, that could adversely impact our financial condition and operational results. The prevailing global supply chain challenges and inflation have further heightened these risks, introducing additional uncertainties into our business.

Currently, we are dealing with escalating construction costs attributed to the rising expenses of labor and raw materials,materials due to inflation and tariffs, logistical challenges in the supply chain, and heightened demanddemand, in particular for network equipment, in our sector. Despite having invested in building up a reserve of materials to address supply chain issues and inflation, there exists the possibility that it may not be sufficient. Persistent delays, difficulties in finding replacement products, and continued high inflation could potentially affect our business and growth, significantly affecting our overall business standing. Any unforeseen disruptions to our supply chain or inflationary pressurespressures, including as a result of tariffs and other trade barriers, might substantially impact the costs associated with our planned expansion projects, potentially hindering our ability to fulfill commitments to customers who have contracted for space in new data centers under construction.construction and to provision new on - net services.

We may be unable to lease or sell the acquired Cogent Fiber Business data centers on attractive financial terms, in sufficient volume or at all. If we are unable to do so, we may not recover the costs incurred in converting these facilities to data centerscenters, we may not be able to recoup our renovation and carry costs, and that could adversely impact our financial condition and operational results.

The perception of our ESG profile as less attractive to customers or employees may impact our brand and reputation. Our level of commitment to ESG initiatives could influence our ability to attract or retain customers and employees.employees who may hold different views on these matters. The timing, scope, or nature of these initiatives, goals, or commitments, as well as any revisions, may lead to criticism. Scrutiny regarding the ESG initiatives and the accuracy, adequacy, or completeness of ESG disclosures may arise. Any perceived failure to achieve ourOur ESG-related initiatives, goals, commitments, or mandates or perceived failure thereof could adversely affect our reputation and materially harm our business. Conversely, if public or investor sentiment turns against ESG-related initiatives, ourOur commitment to ESG initiatives at any level could lead to government scrutiny or private litigation or otherwise adversely affect our reputation and materially harm our business.

The growingevolving emphasisviews on ESG matters has prompted the adoption of competing legal and regulatory requirementsrequirements. While some jurisdictions have mandated additional disclosures related to address climate change effectsothers andhave necessitateenacted additionalstatues disclosures.that restrict the use of ESG factors in business decisions. If new laws or regulations surpassconflict currentwith requirements,one another, we may face heightened compliance burdensburdens, legal uncertainty and increased costs. Our selection of voluntary disclosure frameworks and standards, as well as their interpretation or application, may change and might not align with investor or stakeholder expectations. Achieving our ESG commitments is contingent on numerous external factors beyond our control, including evolving and potentially inconsistent regulatory requirements, supplier availability meeting our standards, and the recruitment, development, and retention of diverse talent.

The Internet is composed of various network providers who operate their own networks that interconnect at public and private interconnection points. Our networkIP Network is one such network. In order to obtain Internet connectivity for our network,IP Network, we must establish and maintain relationships with other ISPs and certain of our larger customers. These providers may be customers (who connect their network to ours by buying Internet access from us) or other large ISPs to whom we connect on a settlement-free peering basis as described below. Both customers and settlement-free peers may be competitors of ours.

By entering into what are known as settlement-free peering arrangements, providers agree to exchange traffic between their respective networks without charging each other. Our ability to avoid the higher costs of acquiring paid dedicated network capacity (transit or paid peering) and to maintain high network performance is dependent upon our ability to establish and maintain settlement-free peering relationships and to increase the capacity or add additional locations of the interconnections provided by these relationships. The terms and conditions of our settlement-free peering relationships may also be subject to adverse changes, which we may not be able to control. If we are not able to maintain or increase our settlement-free peering relationships in all of our markets on favorable terms or to upgrade the capacity of our existing settlement-free peering relationships, customers may not upgrade their Page 23 of 104 connections with us or we may not be able to provide our customers with high performance, affordable or reliable services, which could cause us to lose existing and potential customers, damage our reputation and have a material adverse effect on our business. Additionally, certain of our current customers may seek to become settlement-free peers with us.

We face significant competition from incumbent carriers, Internet service providersISPs and facilities-based network operators. Relative to us, many of these providers have significantly greater financial resources, more well-established brand names, larger customer bases, sales and marketing capabilities, and more diverse strategic plans and service offerings. A number of these providers also have large bases of consumers, which makes their networks particularly attractive to content providers as they can provide a direct connection to their customers. We also face competition from new entrants to the communications services market. Many of these companies offer products and services that are similar to our products and services.

Our Internet business is premised on the idea that customers want simple Internet access and private networks rather than a combination of such services with other services such as voice services and complex managed services. Our competitors offer such services. Should the market come to favor such services our ability to acquire and keep customers would be impaired. Our competitors may also upgrade their existing services or introduce new technologies or services, such as satellite-based Internet or 5G services that could make our services less attractive to potential customers.

Broadband connections provided by cable TV, telephone, and fixed and mobile wireless companies have become the predominant means by which consumers connect to the Internet. The providers of these broadband connections may treat Internet content or other broadband content delivered from different sources differently. The possibility of this has been characterized as an issue of “net neutrality.” As many of our customers operate websites and services that deliver content to consumers, our ability to sell our services would be negatively impacted if Internet content delivered by us was less easily received by consumers than Internet content delivered by others. The FCC had promulgated rules that would have banned practices such as blocking and throttling of Internet traffic, but Page 24 of 104 those rules were rescinded by the FCC in December 2017. A subsequent attempt to reintroduce these rules in 2024 was overturned by the U.S. Court of Appeals for the Sixth Circuit in 2025. Furthermore, the Sixth Circuit decision appears to foreclose any future possibility of the FCC reclassifying broadband as a telecommunications service, a designation that allows the FCC to regulate ISPs under the common-carrier provisions in Title II of the Communications Act. While certain US states, including California, have either issued or are considering their own net neutrality rules, it is unclear whether these state regulations should have the same national impact as the former FCC order. Also, the European Union and other countries in which we operate have issued similar net neutrality rules. We also do not know the extent to which the providers of broadband Internet access to consumers may favor certain content or providers in ways that may disadvantage us.

Our networknetworks may be the target of potential cyber-attacks and other security breaches that could have significant negative consequences.

Our business depends on our ability to limit and mitigate interruptions to or degradation of the security of our network.networks. We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems, as well as trade secrets, intellectual property, personal information or other Company confidential information (collectively “Confidential Information”). We are considered a critical infrastructure provider and therefore may be more likely to be the target of cyber-attacks. Our IT Systems are subject and vulnerable to unauthorized access, social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, computer viruses, cyber-attacks, distributed denial of service (“DDOS”), and other cybersecurity risks. Additionally, any integration of artificial intelligence in our or any third party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.

We and our employees are the target of phishing attempts and compromised links, and our IT Systems are the target of attempts at unauthorized access, a small number of which have been successful in accessing non-critical areas of our IT Systems. Our customer-facing network firewall regularly suppresses cyber-attacks and our networkIP Network routinely manages DDOS attacks. Although none of the incidents, individually or in the aggregate, have materially impacted our operations or business, we cannot guarantee material incidents will not occur in the future. An attack on or security breach of our network could result in theft of Confidential Information, the interruption, degradation, or cessation of services, an inability to meet our service level commitments or our financial reporting obligations, and could potentially compromise customer data stored on or transmitted over our network.

We may be required to expend significant resources to protect against such threats, and may experience a reduction in revenues, litigation (including class action lawsuits), and a diminution in goodwill, caused by a compromise of our cybersecurity. Although our customer contracts limit our liability, affected customers and third parties may seek to recover damages from us under various legal theories. We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all. In response to past attacks, we have implemented additional controls and taken and planned for other preventative actions to further strengthen our systems against future attacks. However, we cannot assure you that such measures will provide absolute security, that we will be able to react in a timely manner, or that our remediation efforts following any past or future attacks will be successful. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information. Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information can result in legal claims Page 25 of 104 or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs. Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition.

ManyIn 2025, we entered into a Legacy Registration Services Agreement with ARIN covering a substantial portion of theour IPv4 addresses we ownthat were originally allocated prior to the creation of ARIN and the other RIRs. As such, ARIN requires us (and any other legacy resource holder) to enter into aThe Legacy Registration Services Agreement toprovides obtainus access to the full range of ARIN services, including, its Resource Public Key Infrastructure (“RPKI”) and Internet Routing Registry (“IRR”). We have elected not to enter into a Legacy Registration Services Agreement with ARIN. As a result, while the IPv4 addresses appear in the ARIN database as under our ownership and control and we have access to a limited set of ARIN services, the Company cannot implement RPKI on these IPv4 addresses.

Our networknetworks isare comprised of a number of separate components, and we may be unable to obtain or maintain the agreements necessary to augment or maintain our network.networks.

OurBoth networkour isIP primarilyNetwork and Optical Wave Network are composed of some or all of the following components: (i) leased capacity on transoceanic optical fiber; (ii) terrestrial inter-city dark optical fiber; (iii) intra-city dark optical fiber; (iv) right-of-way agreements; and (v) the buildings that we serve and the associated optical fiber connecting those buildings. We both own and lease portions of our optical fiber and obtain access to the buildings on our network,networks, both CNDCs and MTOBs, from a number of vendors.vendors, including intra - company leases. A number of our leases, both for fiber and building access, and right-of-way agreements are up for renewal in any given year. A deterioration in our existing relationship with these operatorscounterparties could impact oureither network, harm our sales and marketing efforts and could substantially reduce our potential customer base. In addition, portions of our long-haul optical fiber and metro optical fiber are nearing the end of their original projected useful life. While we believe that this fiber will remain usable beyond the projected end date, we face the risk that portions of our network may need to be replaced in the future.

We expect to enter additional agreements with carriers and operators to obtain additional facilities, whether optical fiber, leased transoceanic capacity or buildings, for oureach network in order to add capacity to oursuch network and to expand our addressable market. However, we cannot assure you that we will be able to enter into such agreements in the future, be able to do so on economically attractive terms or find an adequate substitute if we are unable to reach an agreement. Failure to acquire new facilities to augment our networknetworks could keep us from adding new markets, capacity or buildings to our networknetworks and negatively impact our growth opportunities.

Our off-net customers are connected to our network by means of fiber optic capacity that is provided as services by local telephone and cable companies and others. We may experience problems with the installation, maintenance and pricing of these lines which could adversely affect our results of operations and our plans to add additional off-net customers to our network using such services. We have historically experienced installation and maintenance delays when the network provider is devoting resources to other services, such as traditional telephony, cable TV services and private network services. We have also experienced pricing problemsdifficulties when a lack of alternatives allows a provider to charge high prices for capacity in a particular area or to a particular building. We attempt to reduce this problem by using many different providers so that we have alternatives for linking an off-net customer to our network. Competition among the providers tends to improve installation intervals, maintenance and pricing. Additionally, these providers are often competing with us for the same customers and have marketed their own service to our off-net customers when our initial contract with our customer nears the end of its term.

Our acquisition of Sprint CommunicationsCommunications, (asnow definedcalled below),Cogent Fiber, LLC, including difficulties integrating our business with the SprintCogent Fiber Business, which may result in the combined company not operating as effectively and efficiently as expected; transition services required to support the Sprint Business and the related costs continuing for a period longer than expected, the COVID-19 pandemic and accompanying government policies worldwide; vaccination and in-office requirements, delays in the delivery of network equipment or optical fiber, loss of key right-of-way agreements, future economic instability in the global economy, including the risk of economic recession and recent bank failures and liquidity concerns at certain other banks, which could affect spending on Internet services; the impact of changing foreign exchange rates (in particular the Euro to US dollar and Canadian dollar to US dollar exchange rates) on the translation of our non-US dollar denominated revenues, expenses, assets and liabilities into US dollars; legal and operational difficulties in new markets; our ability to maintain our regulatory licenses that are required in the markets in which we operate; the imposition of a requirement that we contribute to the US Universal Service Fund on the basis of our Internet revenue; changes in government policy and/or regulation, including rules regarding data protection, cyber security and net neutrality; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering and right-of-way arrangements on favorable terms; our ability to renew our long-term leases of optical fiber and right-of-way agreements that comprise our network; our reliance on a limited number of equipment vendors, and the potential for hardware or software problems associated with such equipment; our inability to obtain the equipment necessary for our expansion plans and customer requirements; tariffs imposed on equipment we purchase for our network or other similar government-imposed fees and charges; the dependence of our network on the quality and dependability of third-party fiber and right-of-way providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; our ability to make payments on our indebtedness as they become due and outcomes in litigation, risks associated with variable interest rates under our Swap Agreement as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, this Annual Report on Form 10-K for the year ended December 31, 2025 and our Quarterly Reports on Form 10-Q.

Acquisition of SprintCogent CommunicationsFiber Business

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

On the Closing Date, we 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 Page 38 of 104 to fund the international operations of the SprintCogent Fiber Business) resulted in us making a payment to the Seller of $61.1 million on the Closing Date. In April 2024, an additional Working Capital Adjustment of $5.0 million was paid to the Seller.

On the Closing Date, we entered into an agreement for IP transit services (“IP Transit Services Agreement”), pursuant to which TMUSA will pay us 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 us $100.0 million, $204.2 million and $204.2 million during the years ended December 31, 2025, 2024 and 2023, respectively.

We accounted for the Transaction as a business combination under ASC Topic 805 Business Combinations (“ASC 805”). We evaluated what elements are part of the business combination and the consideration exchanged to complete the acquisition. Under ASC 805, we 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. We also evaluated whether the IP Transit Services Agreement was in the scope of ASU No. 2014-09 Revenue from Contracts with Customers (“ASC 606”). We 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, amongstamong other market factors. The determination of the discount rate requires some judgment.

On the Closing Date, the Buyerwe entered into a transition services agreement (the “TSA”) with the Seller, pursuant to which the Seller provides to the Buyer,us, and thewe Buyer providesprovide 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 SprintCogent Fiber Business from Sprint Communications. The services provided by the Seller to the Buyerus 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. The services provided by the Buyerus 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 SprintCogent 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 us under the TSA are primarily for reimbursement at cost of payments to vendors of the SprintCogent Fiber Business until these vendors are fully transitioned to us.

During the years ended December 31, 2025, 2024 and 2023, we were billed $0.4 million, $27.2 million and $284.1 million, respectively, as due to the Seller under the TSA. During the years ended December 31, 2025, 2024 and 2023, we paid to the Seller $1.0 million, $93.8 million and $217.2 million, respectively, under the TSA. Amounts billed under the TSA are due 30 days from receipt of the related invoice. As of December 31, 2024 and December 31, 2023, we owed $0.5 million and $66.9 million, respectively, to the Seller under the TSA. During the years ended December 31, 2024 and 2023, we billed the Seller $1.1 million and $6.2 million, respectively, as due from the Seller under the TSA. During the years ended December 31, 2024 and 2023, the Seller paid us $1.3 million and $6.0 million, respectively, under the TSA. As of December 31, 2024 and 2023, the Seller owed us $0.1 million and $4.5 million, respectively, under the TSA.

The Purchase Agreement also provides for reimbursement from the Seller to the Buyerus for qualifying severance expenses incurred. Total qualifying severance expenses were $28.6 million of which $12.3 million and $16.2 million were recorded during the years ended December 31, 2024 and 2023, respectively, and fully reimbursed by the Seller. These severance payments ended in the second quarter of 2024.

In addition, on the Closing Date, we entered into a commercial agreement (the “CSA”) with TMUSA for colocation and connectivity services, pursuant to which we provide such services to TMUSA for a per service monthly fee plus certain third-party costs incurred in providing the services. Under the CSA, we recorded service revenue of $2.6 million, $14.7 million and $23.9 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Service Revenue. We continually work to grow our total service revenue by increasing the number of potential customers that we can reach on our network.IP Network and our Optical Wave Network. We do this by investing capital to expand the geographic footprint of our network,networks, increasing the number of buildings that we are connected to, including CNDCs and MTOBs, and increasing our penetration rate into our existing buildings. These efforts broaden the global reach of our networknetworks and increase the size of our potential addressable market. We also seek to grow our service revenue by investing in our sales and marketing team. We typically sell corporate connections at similar pricing to our competitors, but our customers benefit from our significantly faster speeds, greater aggregate throughput, enhanced service level agreements and rapid installation times. In the net-centric market, we offer comparable services in terms of capacity but typically at significantly lower prices.

Our service revenue increaseddecreased by 10.1%5.8% from the year ended December 31, 20232024 to the year ended December 31, 2024.2025. Exchange rates negativelypositively impacted our service revenue by $0.3$4.6 million. All foreign currency comparisons herein reflect results for the year ended December 31, 20242025 translated at the average foreign currency exchange rates for the year ended December 31, 2023.2024. Our total service revenue increaseddecreased primarily due tofrom the revenuecancellation of low-margin and non-core customers we acquired in May 2023 with the SprintCogent BusinessFiber Business, and a reduction in revenue under the Commercial Agreement with TMUSA, partially offset by the growth in customers from expanding our network,networks and offering wavelength services, adding additional buildings to our network,networks, increasing our penetration into the buildings connected to our networknetworks and gaining market share by offering our services at lower prices than our competitors. These increases were partially offset by the cancellation of low margin and non-core customers we acquired with the Sprint Business, and a reduction in revenue under our CSA agreement with TMUSA.

Revenue and customer connections by customer type. Our corporate customers generally purchase their services on a price per connection basis. Our net-centric customers generally purchase their IP services on a price per megabit-metered basis and purchase their optical wavelength services on a per connection basis. Our enterprise customers generally purchase our services on a price per location basis. We began to serve enterprise customers in connection with our acquisition of the SprintCogent Fiber Business. We define “enterprise” customers as large corporations (typically, Fortune 500 companies with greater than $5 billion in annual revenue) running Wide Area Networks (“WAN”) with several dozen to several hundred sites.

We believe that we are in a unique position to monetize the SprintCogent Fiber Business and its networknetwork, and managementwe expectsexpect to achieve significant cost reduction synergies and revenue synergies from the Transaction. Revenue and pre-tax loss forOn the SprintClosing Date, with the Cogent Fiber Business includedwe in our consolidated statements of comprehensive income for the year ended December 31, 2023 were $283.3 million and $234.5 million, respectively.acquired:

Interest Expense - Including Change in Valuation of Swap Agreement. Our interest expense resulted from interest incurred on our 2026 Notes, 2027 Notes, 2027 Mirror Notes, IPv4 Notes, Swap Agreement and finance lease obligations.:

Management believes that as of MarchJune 31,30, 2026, there have been no material changes to our risk factors from those disclosed in Item 1A “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2025.

Our acquisition of Sprint Communications, now called Cogent Fiber,Fiber LLC, including difficulties integrating our business with the Cogent Fiber Business, which may result in the combined company not operating as effectively and efficiently as expected; government policies worldwide; vaccination and in-office requirements, delays in the delivery of network equipment or optical fiber, loss of key right-of-way agreements, future economic instability in the global economy, including the risk of economic recession and bank failures and liquidity concerns at certain other banks, which could affect spending on Internet services; the impact of changing foreign exchange rates (in particular the Euro to US dollar and Canadian dollar to US dollar exchange rates) on the translation of our non-US dollar denominated revenues, expenses, assets and liabilities into US dollars; legal and operational difficulties in new markets; our ability to maintain our regulatory licenses that are required in the markets in which we operate; the imposition of a requirement that we contribute to the US Universal Service Fund on the basis of our Internet revenue; changes in government policy and/or regulation, including rules regarding data protection, cyber security and net neutrality; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering and right-of-way arrangements on favorable terms; our ability to renew our long-term leases of optical fiber and right-of-way agreements that comprise our network; our reliance on a limited number of equipment vendors, and the potential for hardware or software problems associated with such equipment; our inability to obtain the equipment necessary for our expansion plans and customer requirements; tariffs imposed on equipment we purchase for our network or other similar government-imposed fees and charges; the dependence of our network on the quality and dependability of third-party fiber and right-of-way providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; our ability to make payments on our indebtedness as they become due and outcomes in litigation, as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2025 and our Quarterly Reports on Form 10-Q.

The Purchase Agreement provides for a payment of $28.1 million ($19.8 million net of discount) from the Seller to us 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 us 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 requiresrequired some judgment.

On the Closing Date, we entered into an agreement for IP transit services (“IP Transit Services Agreement”), pursuant to which TMUSA will pay us 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 us $25.0$33.3 million both during the three months ended MarchJune 31,30, 2026 and $58.3 million during the six months ended June 30, 2026. The $8.3 million payment scheduled for July 2026 was paid on June 30, 2026. Under the IP Transit Services Agreement, TMUSA paid us $25.0 million during the three months ended June 30, 2025 and $50.0 million during the six months ended June 30, 2025.

We accounted for the Transaction as a business combination under ASC Topic 805 Business Combinations (“ASC 805”). We evaluated what elements are part of the business combination and the consideration exchanged to complete the acquisition. Under ASC 805, we concluded that the $700.0 million of payments to be made representrepresented consideration received from T-Mobile to complete the acquisition of a distressed business. We also evaluated whether the IP Transit Services Agreement was in the scope of ASU No. 2014-09 Revenue from Contracts with Customers (“ASC 606”). We 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 requiresrequired some judgment.

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

Expand our Profitable Business with Enterprise Customers. In conjunction with our acquisition of the Cogent Fiber Business, we acquired a number of larger enterprise customers. We have continued to provide our core services to these enterprise customers and Page 30 of 46 elected to provide MPLS based VPN as well as VPLS services, a new service for these customers, but continue to terminate unprofitable services to these customers at the end of their current term. We have also elected to terminate certain unprofitable customer locations and, in limited circumstances, ceased providing services in certain countries where we could not do so economically. We have not previously focused our sales efforts on larger enterprise customers. Since the acquisition of the Cogent Fiber Business, we have formed dedicated sales personnel who are tasked with preserving existing business with and seeking new sales from enterprise customers.

Increase our Share of the Optical Wavelength Market. We offer 10 Gbps, 100Gbps100 Gbps and 400 Gbps optical wavelength and optical transport services to our net-centric customers who require these high-bandwidth dedicated point-to-point services. We intend to become one of the leading providers of optical wavelength services in North America. Building upon the foundation provided by the assets of the Cogent Fiber Business, we have created, and continue to expand, our Opticaloptical Wavewave Networknetwork to provide optical wavelength services to hyper-scalers and other net-centric customers who require optical wave services. We believe that we offer our customers the following:

Pursue On-net Customer Growth to Corporate and Net - centricCentric Customers. Our high- capacity networks provide us with the ability to add a significant number of customers to either network, depending on the service offering, with minimal direct incremental Page 31 of 46 costs. We intend to increase usage of our networks and operational infrastructure by adding customers in our existing on-net buildings, as well as developing additional markets connecting more MTOBs and CNDCs to our IP Network and connecting more CNDCs to our Opticaloptical Wavewave Network.network. We emphasize our on-net services because they generate greater profit margins and we have more control over service levels, quality and pricing, and our on-net services are provisioned in considerably less time than our off-net services. Our networks connect directly to our on-net customers’ premises and we pay no local access (“last mile”) charges to other carriers to provide our on-net services.

Three Months Ended MarchJune 31,30, 2026 Compared to the Three Months Ended MarchJune 31,30, 2025