Description of the business: (Tables)
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6 Months Ended |
Jun. 30, 2025 |
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| Description of the business: |
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| Schedule of acquisition-date fair value of consideration to be received from the transaction |
| | | | (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. |
| (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. |
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| Schedule of fair values for each major class of assets acquired and liabilities assumed at the closing date |
| | | | | | 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 |
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| Schedule 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 |
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| Schedule of 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 |
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| Schedule of stockholders' (deficit) 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 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
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| Schedule of revenue for termination fees |
| | | | | | | | | | | | | | | 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 |
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| Schedule of lease cost |
| | | | | | | | | | | | | | | 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 |
| | | | | | | | | | 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 | % |
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| Schedule of future minimum payments under these operating lease agreements |
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 |
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| Schedule of future minimum payments under and finance lease agreements |
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 |
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| Schedule of allowance for credit losses |
| | | | | | | | | | | | | | | | | 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 |
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| Schedule of fair value of accounts receivable at the acquisition date |
| | | | | | | | | | | | | | | 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 |
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