Cogent Communications (NASDAQ:CCOI – Get Free Report) announced its quarterly earnings results on Thursday. The technology company reported $1.38 EPS for the quarter, beating analysts’ consensus estimates of ($1.00) by $2.38, FiscalAI reports. The company had revenue of $235.56 million during the quarter, compared to analyst estimates of $239.55 million. Cogent Communications had a negative return on equity of 842.48% and a negative net margin of 4.73%.The firm’s revenue was down 4.4% on a year-over-year basis. During the same period in the prior year, the company earned ($1.21) earnings per share.
Here are the key takeaways from Cogent Communications’ conference call:
- Deleveraging accelerated: Cogent sold 10 former Sprint data centers for $225 million and reduced adjusted net leverage to 6.23x EBITDA from 6.79x in the prior quarter. The company repurchased $138.8 million of 2032 notes at a discount and expects to use additional asset-sale proceeds to reduce debt.
- Margins improved despite lower revenue. Gross margin expanded 260 basis points year over year to 47%, while adjusted EBITDA rose sequentially to $71.1 million and adjusted EBITDA margin increased to 30.2%, supported by cost reductions and a shift toward higher-margin on-net services.
- Wavelength momentum remained strong, with revenue up 63.8% year over year to $14.8 million and customer connections up 66.4% to 2,445. However, 77 existing wavelengths were upgraded during the quarter, and management said customer equipment, power, and data-center constraints are delaying some new installations.
- Consolidated revenue declined 1.5% sequentially to $235.6 million, primarily because lower-margin off-net and acquired Sprint revenues continued to contract. Sprint-related quarterly revenue has fallen 71% since the acquisition, from $118 million to $34 million.
- Liquidity and refinancing remain key risks. The $750 million of 2027 unsecured notes are current and expected to be refinanced in the third quarter, likely at a higher cost of capital; management also acknowledged that achieving sustained positive free cash flow without T-Mobile subsidy payments will require further EBITDA growth, cost reductions, and lower capital expenditures.
Cogent Communications Trading Down 9.1%
Shares of NASDAQ CCOI traded down $0.99 during trading hours on Friday, hitting $9.92. 4,209,069 shares of the company traded hands, compared to its average volume of 1,220,302. The company’s 50 day moving average price is $13.69 and its 200 day moving average price is $18.56. Cogent Communications has a 12 month low of $9.00 and a 12 month high of $45.69. The stock has a market capitalization of $496.79 million, a price-to-earnings ratio of -10.33 and a beta of 0.80.
Cogent Communications Announces Dividend
Analyst Upgrades and Downgrades
Several analysts have recently issued reports on CCOI shares. KeyCorp decreased their price objective on Cogent Communications from $25.00 to $15.00 and set an “overweight” rating on the stock in a report on Friday. Weiss Ratings cut shares of Cogent Communications from a “sell (d+)” rating to a “sell (d)” rating in a research report on Wednesday, May 20th. Citigroup decreased their price target on shares of Cogent Communications from $22.00 to $20.00 and set a “neutral” rating on the stock in a research note on Tuesday, May 19th. Royal Bank Of Canada lowered their price objective on shares of Cogent Communications from $22.00 to $18.00 and set a “sector perform” rating for the company in a research report on Wednesday, May 6th. Finally, UBS Group dropped their price objective on shares of Cogent Communications from $21.00 to $17.00 and set a “neutral” rating for the company in a research note on Tuesday, May 5th. Three research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus target price of $23.10.
View Our Latest Stock Report on CCOI
Insiders Place Their Bets
In other Cogent Communications news, CFO Thaddeus Gerard Weed sold 4,850 shares of Cogent Communications stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $16.79, for a total transaction of $81,431.50. Following the completion of the transaction, the chief financial officer directly owned 197,900 shares of the company’s stock, valued at $3,322,741. The trade was a 2.39% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, VP Henry W. Kilmer sold 2,400 shares of the business’s stock in a transaction on Monday, June 15th. The shares were sold at an average price of $17.01, for a total transaction of $40,824.00. Following the transaction, the vice president owned 38,600 shares in the company, valued at $656,586. This trade represents a 5.85% decrease in their position. The disclosure for this sale is available in the SEC filing. 4.20% of the stock is owned by company insiders.
Institutional Trading of Cogent Communications
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. AQR Capital Management LLC bought a new position in shares of Cogent Communications during the first quarter valued at approximately $202,000. Goldman Sachs Group Inc. grew its position in Cogent Communications by 26.9% in the 1st quarter. Goldman Sachs Group Inc. now owns 476,513 shares of the technology company’s stock valued at $29,215,000 after acquiring an additional 100,969 shares during the last quarter. Empowered Funds LLC grew its position in Cogent Communications by 10.3% in the 1st quarter. Empowered Funds LLC now owns 5,466 shares of the technology company’s stock valued at $335,000 after acquiring an additional 510 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its position in Cogent Communications by 23.4% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 161,791 shares of the technology company’s stock valued at $9,919,000 after acquiring an additional 30,630 shares during the last quarter. Finally, Strs Ohio purchased a new stake in Cogent Communications in the first quarter worth $104,000. 92.45% of the stock is owned by hedge funds and other institutional investors.
Key Stories Impacting Cogent Communications
Here are the key news stories impacting Cogent Communications this week:
- Positive Sentiment: Cogent’s second-quarter loss was narrower than expected on an adjusted basis, with a loss of approximately $0.80 per share versus the $1.12 consensus estimate. The company also benefited from selling 10 data centers for $224.2 million, generating a $130.7 million gain. Cogent Incurs Narrower-Than-Expected Q2 Loss Despite Lower Revenues
- Positive Sentiment: TD Cowen maintained a “buy” rating, although it reduced its price target from $34 to $30. KeyCorp also kept an “overweight” rating, implying substantial upside from current levels. Analyst price-target updates
- Neutral Sentiment: Cogent declared a $0.02 quarterly dividend, payable September 4 to shareholders of record August 21. The payment provides a modest income return, but the small dividend is unlikely to offset broader concerns about the business.
- Negative Sentiment: Second-quarter service revenue of $235.6 million missed the $239.6 million consensus and declined 4.4% year over year. Weakness in Sprint Wireline and off-net services offset growth in on-net and wavelength offerings, raising questions about near-term demand and backlog conversion. Cogent Communications Reports Second Quarter 2026 Results
- Negative Sentiment: Wells Fargo lowered its target from $18 to $14 and assigned an “equal weight” rating. KeyCorp cut its target from $25 to $15, while TD Cowen also reduced its target, indicating analysts are recalibrating expectations despite some remaining bullish views. Analyst price-target updates
- Negative Sentiment: Multiple law firms publicized a securities class action covering investors who purchased CCOI shares between February 29, 2024, and May 1, 2026. The claims reportedly concern undisclosed demand and backlog problems and alleged overly optimistic growth and dividend statements. The lead-plaintiff deadline is September 21, 2026, increasing legal and reputational risk. Cogent securities-fraud class-action notice
About Cogent Communications
Cogent Communications (NASDAQ:CCOI) is a multinational Internet service provider specializing in high-speed Internet access and data transport services. The company operates one of the largest Tier 1 IP networks in the world, offering wholesale and enterprise customers reliable, low-latency connectivity. Cogent’s core services include dedicated Internet access, Ethernet transport, wavelength services, and MPLS-based IP Virtual Private Networks, all delivered over its privately owned, fiber-optic backbone.
In addition to network connectivity, Cogent provides data center colocation and managed services designed to support businesses with demanding bandwidth and redundancy requirements.
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