Cogent Communications (NASDAQ:CCOI) Posts Earnings Results, Beats Expectations By $2.38 EPS

Cogent Communications (NASDAQ:CCOI) issued its quarterly earnings results on Thursday. The technology company reported $1.38 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($1.00) by $2.38, FiscalAI reports. The business had revenue of $235.56 million during the quarter, compared to analyst estimates of $239.55 million. Cogent Communications had a negative net margin of 4.73% and a negative return on equity of 842.48%. The business’s revenue was down 4.4% compared to the same quarter last year. During the same quarter in the previous year, the firm 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 Stock Down 9.1%

Cogent Communications stock traded down $0.99 during midday trading on Friday, hitting $9.92. The company’s stock had a trading volume of 4,209,069 shares, compared to its average volume of 1,220,302. The stock’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 company has a market capitalization of $496.79 million, a PE ratio of -10.33 and a beta of 0.80.

Cogent Communications Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, September 4th. Shareholders of record on Friday, August 21st will be given a $0.02 dividend. The ex-dividend date is Friday, August 21st. This represents a $0.08 annualized dividend and a yield of 0.8%. Cogent Communications’s payout ratio is -2.25%.

Cogent Communications News Roundup

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

Analysts Set New Price Targets

CCOI has been the topic of several research analyst reports. Wall Street Zen raised shares of Cogent Communications from a “strong sell” rating to a “sell” rating in a research report on Saturday, June 27th. Royal Bank Of Canada cut their price objective on Cogent Communications from $22.00 to $18.00 and set a “sector perform” rating on the stock in a research note on Wednesday, May 6th. UBS Group reduced their price objective on Cogent Communications from $21.00 to $17.00 and set a “neutral” rating on the stock in a research note on Tuesday, May 5th. Citigroup decreased their target price on Cogent Communications from $22.00 to $20.00 and set a “neutral” rating for the company in a research note on Tuesday, May 19th. Finally, Weiss Ratings downgraded shares of Cogent Communications from a “sell (d+)” rating to a “sell (d)” rating in a report on Wednesday, May 20th. Three analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the stock currently has a consensus rating of “Hold” and an average target price of $23.10.

Insiders Place Their Bets

In other news, CFO Thaddeus Gerard Weed sold 4,850 shares of the stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $16.79, for a total transaction of $81,431.50. Following the completion of the sale, the chief financial officer owned 197,900 shares in the company, valued at approximately $3,322,741. This represents a 2.39% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, VP Henry W. Kilmer sold 2,400 shares of the stock in a transaction on Monday, June 15th. The shares were sold at an average price of $17.01, for a total value of $40,824.00. Following the completion of the transaction, the vice president owned 38,600 shares of the company’s stock, 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 currently owned by corporate insiders.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of CCOI. Quarry LP acquired a new stake in Cogent Communications during the 3rd quarter worth about $27,000. Kestra Advisory Services LLC acquired a new position in shares of Cogent Communications in the 4th quarter valued at about $43,000. Federation des caisses Desjardins du Quebec increased its holdings in shares of Cogent Communications by 17.5% in the 4th quarter. Federation des caisses Desjardins du Quebec now owns 2,850 shares of the technology company’s stock valued at $61,000 after purchasing an additional 425 shares during the period. Inspire Investing LLC purchased a new stake in shares of Cogent Communications in the fourth quarter worth approximately $63,000. Finally, Aquatic Capital Management LLC acquired a new stake in shares of Cogent Communications during the third quarter worth approximately $79,000. 92.45% of the stock is owned by institutional investors and hedge funds.

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.