COGENT COMMUNICATIONS HOLDINGS, INC. Commitments Disclosure

6. 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 $4.5 million in excess of the amount accrued at December 31, 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.

Network equipment sites and data center facilities

The Company enters into service agreements related to network equipment sites and for data center facilities. Future minimum annual payments under these arrangements are as follows (in thousands):

​

​

Expenses related to these arrangements were $31.9 million in 2025, $35.3 million in 2024 and $29.1 million in 2023. Short - term lease expense was immaterial for all periods presented herein.

Unconditional purchase obligations

Unconditional purchase obligations for equipment and services totaled $64.8 million at December 31, 2025. As of December 31, 2025, the Company had also committed to additional dark fiber IRU finance and operating lease agreements totaling $113.8 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 2026. Future minimum payments under these dark fiber IRU obligations are $9.7 million, $4.8 million, $4.8 million, $4.8 million and $4.8 million for the years ending December 31, 2026 to December 31, 2030, respectively, and $84.9 million, thereafter.

Defined contribution plan

The Company sponsors a 401(k) defined contribution plan that provides for a Company matching payment. The Company matching contributions were paid in cash and were $3.3 million for 2025, $2.8 million for 2024 and $2.3 million for 2023.