Cogent Communications — Third Quarter 2026 Earnings Summary

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 increased 1.9% sequentially to $137.9 million and 1.9% year-over-year.
• Off-net revenue decreased 9.3% sequentially to $76.6 million and 19.5% year-over-year.
• Wavelength revenue increased 7.8% sequentially to $16.0 million and 57.0% year-over-year.
• Non-core revenue decreased to $0.7 million from $0.9 million in Q2 2026 and $1.4 million in Q3 2025.
• EBITDA, as adjusted, was $73.9 million for Q3 2026, an increase of 3.9% from Q2 2026 and 3.9% from Q3 2025.
• EBITDA, as adjusted, margin was 32.0% for Q3 2026, up from 30.2% in Q2 2026 and 30.5% in Q3 2025.
• GAAP gross profit was $56.7 million, a decrease of 1.6% from Q2 2026 but an increase of 13.7% from Q3 2025.
• GAAP gross margin was 24.5% for Q3 2026, flat from Q2 2026 and up from 20.6% in Q3 2025.
• Non-GAAP gross profit was $110.2 million, a decrease of 0.4% from Q2 2026 and 0.6% from Q3 2025.
• Non-GAAP gross margin was 47.6% for Q3 2026, up from 47.0% in Q2 2026 and 45.8% in Q3 2025.
• Net cash provided by operating activities was $3.8 million for Q3 2026, compared to $3.2 million in Q2 2026 and $3.1 million in Q3 2025.
• Network operations expenses (excluding equity-based compensation) were $121.0 million, a decrease of 3.1% from Q2 2026.
• Selling, general and administrative expenses (excluding equity-based compensation) were $61.3 million, a decrease of 5.1% from Q2 2026.
• Capital expenditures were $36.3 million, a decrease of 5.8% from Q2 2026.
• Total cash and restricted cash at the end of Q3 2026 was $181.3 million.
• Basic and diluted net loss per share was $(0.62) for Q3 2026, compared to a profit of $1.39/$1.38 in Q2 2026 and a loss of $(0.87) in Q3 2025.
• Gross leverage ratio was 7.41 as of September 30, 2026, down from 8.02 in Q2 2026.
• Net leverage ratio was 6.79 as of September 30, 2026, down from 6.75 in Q2 2026.
• Consolidated Leverage Ratio under indentures was 5.35 as of September 30, 2026.
• Secured Leverage Ratio under indentures was 3.25 as of September 30, 2026.
• Fixed Charge Coverage Ratio under indentures was 2.32 as of September 30, 2026.

Guidance and Future Outlook:

• No forward guidance or specific future growth targets were provided in the press release.
• Management stated that future dividends and returns of capital will be at the discretion of the Board and dependent on financial position, results of operations, cash flow, capital requirements, and debt indenture limitations.

Business Segments and Product Lines:

• Cogent offers optical wavelength services in 1,151 locations across the United States, Mexico, and Canada.
• Total customer connections decreased 1.0% sequentially to 114,678 and 3.0% year-over-year.
• On-net customer connections decreased 0.8% sequentially to 87,326 and 0.5% year-over-year.
• Off-net customer connections decreased 2.5% sequentially to 22,453 and 12.0% year-over-year.
• Wavelength customer connections increased 11.3% sequentially to 2,722 and 55.5% year-over-year.
• Non-core customer connections decreased 7.3% sequentially to 2,177.
• The number of on-net buildings increased 38 sequentially to 3,665 and 128 year-over-year.
• IP Network traffic increased 4% sequentially and 14% year-over-year.
• Sales force headcount decreased to 635 total employees (471 quota-bearing) at the end of Q3 2026.
• Total employee headcount decreased to 1,603 at the end of Q3 2026.

Market and Competitive Landscape:

• Foreign exchange rates negatively impacted service revenue growth by $0.3 million sequentially and $0.5 million year-over-year.
• On a constant currency basis, service revenue decreased 1.7% sequentially and 4.2% year-over-year.
• The company noted increasing competition leading to lower prices for services as a risk factor.

Risks and Challenges:

• Risks include difficulties integrating the acquired Wireline Business, transition service costs, delays in network equipment delivery, loss of right-of-way agreements, and global economic instability.
• Risks also include changing foreign exchange rates, regulatory changes (net neutrality, data protection), cyber-attacks, and reliance on third-party fiber providers.
• The company faces risks regarding its ability to make payments on indebtedness, specifically the 2027 unsecured notes due June 2027.

Management Commentary and Tone:

• Management highlighted the expansion of optical wavelength services following the Sprint acquisition.
• The Board voted to suspend the dividend program on November 4, 2026.
• The tone reflects a focus on cost management (decreases in opex and capex) and debt reduction through note purchases, despite revenue declines.

Analyst Questions and Answers:

• No analyst questions or answers were included in the press release text.

Other Key Points:

• Cogent purchased $118.4 million par value of its 2032 secured notes for $106.7 million, resulting in a gain of $11.3 million during Q3 2026.
• Total purchases of 2032 secured notes through Q3 2026 were $138.8 million par value for $125.4 million, resulting in a total gain of $12.9 million.
• Cogent purchased $50.0 million par value of its 2027 unsecured notes for $49.6 million, resulting in a gain of $0.1 million during Q3 2026.
• Cogent entered into two non-binding letters of intent to sell four data centers acquired and repurposed from the Sprint acquisition for approximately $100.0 million in cash.
• The IP Transit Services Agreement with T-Mobile generated $16.7 million in payments during Q3 2026.
• Gains on debt extinguishments totaled $11.3 million for Q3 2026.
• Gains on asset sales and finance lease terminations totaled $5.2 million for Q3 2026.