Cogent Communications (NASDAQ:CCOI) Issues Earnings Results

Key Points

• Cogent reported a quarterly loss of $0.62 per share, narrower than analysts’ expected $0.77 loss and the $0.87 loss a year earlier.
• Revenue was $231.2 million, below estimates of $234.6 million and down 4.4% year over year, although adjusted EBITDA rose to $73.9 million and its margin expanded to 32%.
• Wavelength revenue grew 57% year over year, but the company faces unresolved refinancing of $700 million in notes due in 2027 and has suspended its dividend while evaluating options.

Cogent Communications (NASDAQ:CCOI - Get Free Report) released its earnings results on Thursday. The technology company reported ($0.62) earnings per share for the quarter, topping analysts' consensus estimates of ($0.77) by $0.15, FiscalAI reports. The firm had revenue of $231.20 million during the quarter, compared to analyst estimates of $234.57 million. During the same quarter last year, the company earned ($0.87) earnings per share. The business's revenue for the quarter was down 4.4% on a year-over-year basis.

Here are the key takeaways from Cogent Communications' conference call:

• Margins improved despite declining revenue: Revenue fell 1.8% sequentially to $231.2 million, while adjusted EBITDA rose $2.8 million to $73.9 million and adjusted EBITDA margin expanded to 32%. Management attributed the improvement to cost cuts and shifting sales toward higher-margin on-net services.
• Wavelength sales accelerated: Wavelength revenue increased 57% year over year and 7.8% sequentially to $16 million, with 277 net connections added in the quarter. Management said customer demand remains strong, though data-center readiness, power availability, and equipment constraints are delaying some activations.
• Refinancing the 2027 notes remains unresolved: Cogent has $700 million of unsecured notes due June 2027 and is evaluating multiple proposals with financial and legal advisors, without giving a specific timeline or terms. The company suspended its dividend while it determines a path forward.
• Debt reduction and data-center monetization are supporting deleveraging: Cogent reduced gross debt by $197 million in the quarter, and gross leverage adjusted for amounts due from T-Mobile fell to 6.94 times. It also has non-binding letters of intent to sell four additional former Sprint facilities for about $100 million, with closing targeted for early 2027.
• Revenue growth depends on the mix shift and the acquired Sprint base continuing to run off: On-net revenue, including wavelengths, increased 5.8% year over year, while off-net revenue declined 19.5%; management expects future growth to be led by on-net services, NetCentric customers, wavelengths, and IPv4 leasing. It reiterated a long-term 6%–8% growth outlook, while acknowledging that total revenue remained in decline this quarter.

Cogent Communications Trading Down 15.1%

Cogent Communications stock traded down $0.71 on Friday, reaching $3.98. 5,169,189 shares of the stock were exchanged, compared to its average volume of 1,716,433. Cogent Communications has a twelve month low of $3.56 and a twelve month high of $28.70. The firm has a fifty day moving average price of $8.24 and a two-hundred day moving average price of $15.36. The stock has a market cap of $203.86 million, a PE ratio of -5.61 and a beta of 0.80.

More Cogent Communications News

Here are the key news stories impacting Cogent Communications this week:

• Positive Sentiment: Cogent reported a Q3 loss of $0.62 per share, narrower than analysts’ roughly $0.77-per-share estimate and the $0.87 loss a year earlier. On-net revenue, including wavelengths, rose 2.4% sequentially to $153.9 million and was up 5.8% year over year. Cogent Communications Reports Third Quarter 2026 Results
• Negative Sentiment: UBS lowered its price target to $6 from $11 while maintaining a Neutral rating, and KeyBanc also downgraded the shares. The analyst actions are weighing on investor sentiment. UBS Adjusts Price Target Cogent Communications Shares Fall After KeyBanc Downgrade
• Negative Sentiment: Q3 revenue of $231.2 million fell short of expectations of about $234.6 million, declined 4.4% year over year, and was below the prior quarter’s $235.6 million in service revenue. The sales shortfall and ongoing revenue contraction appear to outweigh the narrower-than-expected loss. Cogent misses Q3 2026 sales expectations

Insider Activity

In other news, CFO Thaddeus Weed sold 4,850 shares of Cogent Communications stock in a transaction dated Wednesday, September 2nd. The stock was sold at an average price of $9.37, for a total value of $45,444.50. Following the transaction, the chief financial officer directly owned 193,050 shares in the company, valued at approximately $1,808,878.50. The trade was a 2.45% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Corporate insiders own 4.20% of the company's stock.

Analysts Set New Price Targets

CCOI has been the subject of several research analyst reports. KeyCorp lowered Cogent Communications from an "overweight" rating to a "sector weight" rating in a report on Friday. JPMorgan Chase & Co. cut Cogent Communications from a "neutral" rating to an "underweight" rating and decreased their target price for the company from $22.00 to $9.00 in a research note on Wednesday, August 19th. Wall Street Zen raised Cogent Communications from a "sell" rating to a "hold" rating in a report on Saturday, August 15th. UBS Group set a $9.00 price target on shares of Cogent Communications in a research report on Wednesday, August 19th. Finally, Royal Bank Of Canada dropped their price target on shares of Cogent Communications from $18.00 to $12.00 and set a "sector perform" rating on the stock in a research report on Thursday, August 13th. Two investment analysts have rated the stock with a Buy rating, seven have given a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Hold" and an average target price of $19.55.

Cogent Communications Company Profile

Cogent Communications Holdings, Inc NASDAQ: CCOI is a telecommunications company that provides high-speed Internet connectivity and data transport services to businesses, telecommunications carriers, content providers, government agencies and educational institutions. The company operates a global, facilities-based fiber-optic network and is recognized as a Tier 1 Internet service provider.

Cogent's offerings include dedicated Internet access, IP transit, Ethernet and other private network connectivity services.

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