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Non-GAAP EBITDA and non-GAAP EBITDA, as adjusted, reconciled to GAAP cash flows
provided by operating activities
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
($ in 000's) unaudited
Net cash flows provided by operating activities
Changes in operating assets and liabilities
Cash interest expense and income tax expense
EBITDA (1)
PLUS: Sprint (T-Mobile Wireline) acquisition costs.
$49,411
$34,403
$53,570
$36,323
(6,294)
5,108
(13,017)
4,152
$35,821
1,435
$82,654
$(90,373)
14,038
18,946
17,320
16,663
18,797
$57,155
$58,457
$57,873
$57,138
$56,053
31,875
$24,156
$(52,433)
$51,064
44,956
$43,587
2,004
244
400
$739
$351
PLUS: Cash payments made to the Company under IP Transit Services Agreement
EBITDA, as adjusted for Sprint (T-Mobile Wireline) acquisition costs and IP Transit
Services Agreement (1)
=
=
=
29,167
87,500
$57,155
$58,457
$59,877
$57,382
$56,453
$54,062
$131,438
EBITDA margin (1)
38.3%
39.4%
38.6%
37.6%
36.5%
10.1%
15.8%
EBITDA, as adjusted for Sprint (T-Mobile Wireline) acquisition costs and IP Transit
Services Agreement, margin (1)
38.3%
39.4%
39.9%
37.8%
36.8%
22.5%
47.7%
Non-GAAP gross profit and non-GAAP gross margin reconciled to GAAP gross profit and GAAP gross margin
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
($ in 000's) unaudited
Service revenue total
$149,175
$148,450
$150,000
$151,979
$153,588
$239,806
$275,429
Minus - Network operations expense including equity-based compensation and including
depreciation and amortization expense
80,137
79,585
80,117
80,535
83,798
190,013
260,328
GAAP Gross Profit (2)
$69,038
$68,865
Plus Equity-based compensation - network operations expense
144
145
$69,883
176
$71,444
$69,790
88
149
$49,793
231
$15,101
370
Plus Depreciation and amortization expense
Non-GAAP Gross Profit (3)
22,688
$91,870
23,071
$92,081
22,897
$92,956
GAAP Gross Margin (2)
Non-GAAP Gross Margin (3)
46.3%
61.6%
46.4%
62.0%
46.6%
62.0%
23,563
$95,095
47.0%
62.6%
25,160
$95,099
$52,511
$102,535
$86,734
$102,205
45.4%
20.8%
5.5%
61.9%
42.8%
37.1%
(1)
(2)
(3)
EBITDA represents net cash flows provided by operating activities plus changes in operating assets and liabilities, cash interest expense and cash income tax expense. Management believes the most directly comparable measure to
EBITDA calculated in accordance with generally accepted accounting principles in the United States, or GAAP, is net cash provided by operating activities. The Company also believes that EBITDA is a measure frequently used by
securities analysts, investors, and other interested parties in their evaluation of issuers. EBITDA, as adjusted for Sprint acquisition costs and cash payments under IP Transit Services Agreement, represents EBITDA plus costs related to
the Company's acquisition of Sprint's Wireline Business. EBITDA margin is defined as EBITDA divided by total service revenue. EBITDA, as adjusted for Sprint acquisition costs and cash payments under IP Transit Services Agreement
margin is defined as EBITDA, as adjusted for Sprint (T-Mobile Wireline) acquisition costs and IP Transit Agreement, divided by total service revenue.
GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity based compensation included in network operations expense. GAAP gross margin is defined as GAAP
gross profit divided by total service revenue.
Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as
non-GAAP gross profit divided by total service revenue. Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant metrics to provide to investors, as they are metrics that management uses to measure
the margin and amount available to the Company after network service costs, in essence these are measures of the efficiency of the Company's network.
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