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

Cogent Communications (NASDAQ:CCOI) issued its quarterly earnings data on Thursday. The technology company reported $1.38 EPS for the quarter, beating the consensus estimate of ($1.00) by $2.38, FiscalAI reports. The firm had revenue of $235.56 million during the quarter, compared to the consensus estimate of $239.55 million. Cogent Communications had a negative net margin of 4.73% and a negative return on equity of 842.48%. The company’s quarterly revenue was down 4.4% compared to the same quarter last year. During the same period in the prior year, the firm posted ($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 Price Performance

CCOI stock traded down $0.99 during midday trading on Friday, hitting $9.92. The stock had a trading volume of 4,209,069 shares, compared to its average volume of 1,220,302. The firm has a market cap of $496.79 million, a price-to-earnings ratio of -10.33 and a beta of 0.80. The business has a 50-day moving average of $13.69 and a two-hundred day moving average of $18.56. Cogent Communications has a 52-week low of $9.00 and a 52-week high of $45.69.

Cogent Communications Dividend Announcement

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

Cogent Communications News Summary

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

Insider Buying and Selling at Cogent Communications

In other Cogent Communications news, VP Henry W. Kilmer sold 2,400 shares of the firm’s stock in a transaction on Monday, June 15th. The stock was sold at an average price of $17.01, for a total transaction of $40,824.00. Following the completion of the transaction, the vice president owned 38,600 shares of the company’s stock, valued at approximately $656,586. This trade represents a 5.85% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, CFO Thaddeus Gerard Weed sold 4,850 shares of the business’s 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 sale, the chief financial officer owned 197,900 shares in the company, valued at approximately $3,322,741. This trade represents a 2.39% decrease in their position. The disclosure for this sale is available in the SEC filing. Company insiders own 4.20% of the company’s stock.

Hedge Funds Weigh In On Cogent Communications

Large investors have recently made changes to their positions in the business. Quarry LP purchased a new stake in shares of Cogent Communications in the 3rd quarter worth approximately $27,000. Kestra Advisory Services LLC bought a new stake in Cogent Communications in the fourth quarter worth $43,000. Federation des caisses Desjardins du Quebec boosted its holdings in Cogent Communications by 17.5% in the fourth quarter. Federation des caisses Desjardins du Quebec now owns 2,850 shares of the technology company’s stock worth $61,000 after acquiring an additional 425 shares in the last quarter. Inspire Investing LLC purchased a new stake in shares of Cogent Communications in the fourth quarter worth $63,000. Finally, Aquatic Capital Management LLC purchased a new stake in shares of Cogent Communications in the third quarter worth $79,000. 92.45% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of research analysts recently issued reports on CCOI shares. Wall Street Zen upgraded Cogent Communications from a “strong sell” rating to a “sell” rating in a report on Saturday, June 27th. UBS Group dropped their price objective on Cogent Communications from $21.00 to $17.00 and set a “neutral” rating for the company in a report on Tuesday, May 5th. KeyCorp cut their price objective on Cogent Communications from $25.00 to $15.00 and set an “overweight” rating on the stock in a research report on Friday. Royal Bank Of Canada reduced their target price 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. Finally, Citigroup decreased their target price on Cogent Communications from $22.00 to $20.00 and set a “neutral” rating for the company in a report on Tuesday, May 19th. Three equities research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has a consensus rating of “Hold” and an average price target of $23.10.

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.