Nov 5, 2026, 7:22 AM ETCommunication Services

Cogent Communications — Q3 2026 Earnings Summary

CCOICOGENT COMMUNICATIONS HOLDINGS INC

Financial Performance

Service revenue totaled $231.2 million for Q3 2026, a decrease of 1.8% sequentially from Q2 2026 and a decrease of 4.4% year-over-year from Q3 2025.
On-net revenue (including wavelengths) was $153.9 million, up 2.4% sequentially and 5.8% year-over-year.
Wavelength revenue was $16.0 million, up 7.8% sequentially and 57.0% year-over-year.
Off-net revenue was $76.6 million, down 9.3% sequentially and 19.5% year-over-year.
Non-core revenue was $0.7 million, down 22.2% sequentially and 50.0% year-over-year.
Adjusted EBITDA was $73.9 million, up 3.9% sequentially and 0.1% year-over-year, with an adjusted EBITDA margin of 32.0%.
GAAP gross profit was $56.7 million, down 1.6% sequentially and up 13.7% year-over-year, with a GAAP gross margin of 24.5%.
Non-GAAP gross profit was $110.2 million, down 0.4% sequentially and down 0.6% year-over-year, with a Non-GAAP gross margin of 47.6%.
Net cash provided by operating activities was $3.8 million for Q3 2026.
Total cash and restricted cash at period end was $181.3 million.
Net loss per diluted share was $(0.62) for Q3 2026.
Foreign exchange rates negatively impacted service revenue by $0.3 million sequentially and $0.5 million year-over-year.

No forward guidance or future financial outlook was provided in the press release.

Cogent offers optical wavelength services in 1,151 locations across the United States, Mexico, and Canada, enabled by the Sprint network acquisition.
Total customer connections decreased to 114,678 as of September 30, 2026 (down 3.0% year-over-year).
On-net customer connections were 87,326 (down 0.5% year-over-year).
Off-net customer connections were 22,453 (down 12.0% year-over-year).
Wavelength customer connections increased to 2,722 (up 55.5% year-over-year).
Non-core customer connections were 2,177 (down 32.9% year-over-year).
On-net buildings increased to 3,665 as of September 30, 2026 (up 128 year-over-year).
IP Network traffic increased 4% sequentially and 14% year-over-year.
Network operations expenses (excluding equity-based compensation) were $121.0 million, down 3.1% sequentially.
Selling, general and administrative expenses (excluding equity-based compensation) were $61.3 million, down 5.1% sequentially.
Capital expenditures were $36.3 million, down 5.8% sequentially.

The document does not contain specific information regarding market share, specific competitors, or broader market trends beyond the growth in wavelength services and traffic volume.

Risks include difficulties integrating the acquired Wireline Business, potential delays in network equipment delivery, loss of right-of-way agreements, and economic instability affecting customer spending.
Risks include changing foreign exchange rates, regulatory changes (net neutrality, data protection), cyber-attacks, and increasing competition leading to lower prices.
Risks include reliance on a few equipment vendors, dependence on third-party fiber providers, and the ability to retain key customers.
Risks include the ability to make debt payments, specifically regarding the 2027 unsecured notes due June 2027.

Management highlighted the expansion of optical wavelength services and the continued reduction in capital expenditures and operating expenses.
The Board voted to suspend the quarterly dividend program on November 4, 2026, citing the need to evaluate financial position, cash flow, and capital requirements.
Future dividends and capital returns will be at the discretion of the Board and may be reduced, eliminated, or increased.

Cogent purchased $118.4 million par value of its 2032 secured notes for $106.7 million, resulting in a $11.3 million gain during Q3 2026.
Cogent purchased $50.0 million par value of its 2027 unsecured notes for $49.6 million, resulting in a $0.1 million gain during Q3 2026.
Total purchases of 2032 notes in 2026 reached $138.8 million par value for $125.4 million, with a total gain of $12.9 million.
Cogent entered into two non-binding letters of intent to sell four data centers acquired from the Sprint acquisition for approximately $100.0 million in cash.
Cash payments under the IP Transit Services Agreement with T-Mobile were $16.7 million for Q3 2026.
The company reported a gain of $2.3 million on asset sales and $2.9 million on finance lease terminations in Q3 2026.
Gross leverage ratio (adjusted for T-Mobile receivables) was 6.94 as of September 30, 2026.
Net leverage ratio (adjusted for T-Mobile receivables) was 6.32 as of September 30, 2026.