Mike Funk

Mike Funk asked for clarification on the appropriate rate of sequential revenue growth for 2026, noting that street forecasts often exceed actual results and contribute to stock volatility. He also inquired about internal strategies to improve sales rep productivity, which has been trending downwards.

Answer

CEO Dave Schaeffer reiterated that Cogent Communications does not provide specific quarterly or annual guidance but maintains a multi-year revenue growth target of 6%-8%. He emphasized that future growth will be driven by high-margin products and that the company has consistently expanded margins. Regarding sales rep productivity, Schaeffer noted that while unit productivity has fluctuated, ARPUs have increased due to a focus on higher-payout On-Net services. He highlighted ongoing training, internal promotions, and incentives, along with a monthly turnover rate of 5.4%, which is below the long-term average.

Mike Funk from Bank of America followed up on previous Capital Markets Day discussions, asking if the primary drivers of wireless switching activity (network quality, customer experience, price/value) have changed given the current K-shaped economy, and how this informs T-Mobile's stance on device subsidies.

Answer

Michael Sievert, CEO, confirmed that network quality, customer experience, and value remain the key drivers. He emphasized T-Mobile's commitment to zealously guarding its value position, but in a way that truly delivers value to customers rather than through practices that might destroy it, such as certain device subsidy models.

Mike Funk (Bank of America Corporation) asked for background on the negotiation timeline for the new Verizon MLA. He also inquired whether carriers' contemplation of expanding Fixed Wireless Access (FWA) into more rural areas represents active discussions with SBA or more of an anticipation of future market movements.

Answer

Brendan Cavanagh, President and CEO of SBA, stated that Verizon MLA discussions had been ongoing for much of the year, taking time but moving efficiently. On FWA expansion into rural areas, he described it as a mix of anticipation and observed activity. Mr. Cavanagh noted FWA deployments don't look different from traditional 5G mid-band, making it hard to distinguish, but expects continued FWA push into additional communities, driven by subscriber growth, potentially facilitated by the Verizon agreement.

An analyst on behalf of Mike Funk asked what SBA attributes the increase in new leasing activity to and requested a split by carrier. The analyst also asked for quantification of the potential benefit from higher CPI rates on international escalators.

Answer

President and CEO Brendan Cavanagh attributed the leasing increase to a variety of factors including increased subscriber activity, bandwidth-intensive products like FWA, and specific regulatory requirements for T-Mobile. He declined to provide a carrier-specific breakdown. On CPI, he noted that elevated rates, particularly in Brazil, could potentially add '$1 million or $2 million' to the full-year outlook if they persist, but guidance has not yet been raised for this.

Matthew Bullock, on for Mike Funk, asked how macroeconomic uncertainty could impact implementation cycles and adoption momentum for CCCS's emerging solutions.

Answer

CEO Githesh Ramamurthy stated that strong demand for emerging solutions continues and that implementation cycles are not currently being affected, citing a recent fast OEM rollout. He clarified that the cautious guidance reflects prudence regarding the broader macro environment, not a currently observed impact on sales or implementation velocity.

Mike Funk asked about the read-through from Microsoft's strong Azure growth on the demand Equinix is seeing for AI inferencing.

Answer

CEO and President Adaire Fox-Martin stated that Equinix continues to win significant AI opportunities, with 50% of the top 25 deals in Q1 being AI-related. She noted that while service providers are chasing capacity, enterprises are focused on targeted use cases. She highlighted Equinix's value proposition for inference, including its flexible data strategy, privacy-first approach, low-latency networks, and partner ecosystem, which supports demand for both centralized 'AI factories' and distributed edge inferencing.

Mike Funk sought more color on which markets are most vulnerable to uncertainty, leading to the cautious guidance, and asked to what extent services revenue is dependent on a single carrier's RAN upgrade versus being more broad-based.

Answer

CEO Steven Vondran identified emerging markets as more susceptible to global macro shocks and FX volatility, while stating the U.S. outlook is firm. CFO Rod Smith added that uncertainties around inflation, interest rates, and FX make it prudent to not raise core guidance. Vondran clarified that the overall services business is broad-based across customers and activities, not dependent on a single project.