Cogent Communications Reports Third Quarter 2025 Results

WASHINGTON, Nov. 6, 2025

On-net service is provided to customers located in buildings that are physically connected to Cogent's network by Cogent facilities. On-net revenue was $135.3 million for the three months ended September 30, 2025, an increase of 2.2% from the three months ended June 30, 2025 and a decrease of 0.9% from the three months ended September 30, 2024.

Off-net customers are located in buildings directly connected to Cogent's network using other carriers' facilities and services to provide the last mile portion of the link from the customers' premises to Cogent's network. Off-net revenue was $95.1 million for the three months ended September 30, 2025, a decrease of 6.9% from the three months ended June 30, 2025 and a decrease of 14.5% from the three months ended September 30, 2024.

Wavelength revenue was $10.2 million for the three months ended September 30, 2025, an increase of 12.4% from the three months ended June 30, 2025 and an increase of 92.5% from the three months ended September 30, 2024.

Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell.  Non-core revenue was $1.4 million for the three months ended September 30, 2025, $2.7 million for the three months ended June 30, 2025 and was $4.1 million for the three months ended September 30, 2024. 

GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity-based compensation included in network operations expense.  GAAP gross margin is defined as GAAP gross profit divided by total service revenue. GAAP gross profit increased by 48.9% from the three months ended June 30, 2025 to $49.8 million for the three months ended September 30, 2025 and increased by 406.8% from the three months ended September 30, 2024.

GAAP gross margin was 20.6% for the three months ended September 30, 2025, 13.6% for the three months ended June 30, 2025 and 3.8% for the three months ended September 30, 2024.

Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as Non-GAAP gross profit divided by total service revenue.  Non-GAAP gross profit increased by 1.4% from the three months ended June 30, 2025 to $110.8 million for the three months ended September 30, 2025 and increased by 15.3% from the three months ended September 30, 2024.

Non-GAAP gross margin was 45.8% for the three months ended September 30, 2025, 44.4% for the three months ended June 30, 2025 and 37.4% for the three months ended September 30, 2024.

Net cash provided by operating activities was $3.1 million for the three months ended September 30, 2025. Net cash used in operating activities was $44.0 million for the three months ended June 30, 2025 and was $20.2 million for the three months ended September 30, 2024.

Potential Sale of Acquired Data Centers

In October 2025, Cogent entered into a non-binding letter of intent "(LOI") for the sale of two data center facilities (the "Facilities") and the associated land for $144.0 million in cash.  The LOI includes certain contingencies, including the completion of further due diligence by the prospective buyer and negotiation and execution of a definitive purchase and sale agreement. The Facilities are owned real estate acquired and repurposed by Cogent in the Sprint acquisition.

IP Transit Services Agreement

On May 1, 2023, the closing date of the Sprint acquisition, Cogent and T-Mobile USA, Inc. ("TMUSA"), a Delaware corporation and direct subsidiary of T-Mobile US, Inc., a Delaware corporation ("T-Mobile"), entered into an agreement for IP transit services (the "IP Transit Services Agreement"), pursuant to which TMUSA will pay Cogent an aggregate of $700.0 million, consisting of (i) $350.0 million paid in equal monthly installments during the first year after the closing date of the Sprint acquisition and (ii) $350.0 million paid in equal monthly installments over the subsequent 42 months. Amounts paid under the IP Transit Services Agreement were $25.0 million, $25.0 million and $25.0 million in the three months ended September 30, 2024, June 30, 2025 and September 30, 2025, respectively.

Earnings before interest, taxes, depreciation and amortization (EBITDA), was $48.8 million for the three months ended September 30, 2025, $48.5 million for the three months ended June 30, 2025 and $35.9 million for the three months ended September 30, 2024.

EBITDA margin, was 20.2% for the three months ended September 30, 2025, 19.7% for the three months ended June 30, 2025 and 13.9% for the three months ended September 30, 2024. 

Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, for Sprint acquisition costs and cash paid under the IP Transit Services Agreement, was $73.8 million for the three months ended September 30, 2025, $73.5 million for the three months ended June 30, 2025 and $60.9 million for the three months ended September 30, 2024.

EBITDA margin, as adjusted for Sprint acquisition costs and cash paid under the IP Transit Services Agreement, was 30.5% for the three months ended September 30, 2025, 29.8% for the three months ended June 30, 2025 and 23.7% for the three months ended September 30, 2024. 

Basic and diluted net loss per share was $(0.87) for the three months ended September 30, 2025, $(1.21) for the three months ended June 30, 2025 and was $(1.33) for the three months ended September 30, 2024. 

Total customer connections decreased by 6.4% from September 30, 2024 to 118,279 as of September 30, 2025 and decreased by 0.4% from June 30, 2025.  On-net customer connections increased by 0.1% from September 30, 2024 to 87,767 as of September 30, 2025 and increased by 0.4% from June 30, 2025. Off-net customer connections decreased by 21.3% from September 30, 2024 to 25,518 as of September 30, 2025 and decreased by 2.7% from June 30, 2025. Wavelength customer connections increased by 68.1% from September 30, 2024 to 1,750 as of September 30, 2025 and increased by 19.1% from June 30, 2025. Non-core customer connections were 3,244 as of September 30, 2025, 3,615 as of June 30, 2025 and 5,217 as of September 30, 2024. 

The number of on-net buildings increased by 113 from September 30, 2024 to 3,537 as of September 30, 2025 and increased by 8 from June 30, 2025.

Optical Wave Network 

Acquiring the Sprint network has also allowed Cogent to construct a wavelength network using predominantly owned fiber. This enabled Cogent to expand its product offerings to include optical wavelength services.  As of September 30, 2025, Cogent was offering optical wavelength services in 996 data centers in the United States, Mexico and Canada.

Quarterly Dividend Approved

On November 5, 2025, Cogent's Board approved a regular quarterly dividend of $0.02 per share payable on December 8, 2025 to shareholders of record on November 21, 2025. 

The payment of any future dividends and any other returns of capital will be at the discretion of the Board and may be reduced, eliminated or increased and will be dependent upon Cogent's financial position, results of operations, available cash, cash flow, capital requirements, limitations under Cogent's debt indentures and other factors deemed relevant by the Board.

Stock Buyback Program

Cogent will be temporarily pausing its stock buyback program.

Conference Call and Website Information

Cogent will host a conference call with financial analysts at 8:30 a.m. (ET) on November 6, 2025 to discuss Cogent's operating results for the third quarter of 2025.  Investors and other interested parties may access a live audio webcast of the earnings call in the "Events" section of Cogent's website at www.cogentco.com/events. A replay of the webcast, together with the press release, will be available on the website following the earnings call.  A downloadable file of Cogent's "Summary of Financial and Operational Results" and a transcript of its conference call will also be available on Cogent's website following the conference call. 

About Cogent Communications

Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1 facilities-based ISP.  Cogent specializes in providing businesses with high-speed Internet access, Ethernet transport, optical wavelength, optical transport and colocation services. Cogent's facilities-based, all-optical IP network backbone provides services in 302 markets globally.

Cogent Communications is headquartered at 2450 N Street, NW, Washington, D.C. 20037. For more information, visit www.cogentco.com. Cogent Communications can be reached in the United States at (202) 295-4200 or via email at info@cogentco.com.

(1) In connection with the acquisition of the Wireline Business, Cogent began to provide optical wavelength services and optical transport services over its fiber network. 

(2) Consists of legacy services of companies whose assets or businesses were acquired by Cogent.

(3) See Schedules of Non-GAAP measures below for definitions and reconciliations to GAAP measures.

(4) Network operations expense excludes equity-based compensation expense of $385, $350, $469, $477, $490, $506 and $570 in the three-month periods ended March 31, 2024 through September 30, 2025 respectively.  Network operations expense includes excise taxes, including Universal Service Fund fees, of $20,549, $19,182, $19,752, $20,960, $20,200, $19,998 and $19,166 in the three-month periods ended March 31, 2024 through September 30, 2025, respectively. 

(5) In connection with the acquisition of the Wireline Business, Cogent classified revenue and customer connections as follows:

• $12.9 million of the Wireline Business monthly recurring revenue and 17,823 customer connections as corporate revenue and corporate customer connections, respectively,
• $6.5 million of monthly recurring revenue and 5,711 customer connections as net-centric revenue and net-centric customer connections, respectively, and
• $20.1 million of monthly recurring revenue and 23,209 customer connections as enterprise revenue and enterprise customer connections, respectively.
• Conversely, Cogent reclassified $0.3 million of monthly recurring revenue and 387 customer connections of legacy Cogent monthly recurring revenue to enterprise revenue and enterprise customer connections, respectively.

(6) GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity-based compensation included in network operations expense.  GAAP gross margin is defined as GAAP gross profit divided by total service revenue.

(7) Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as non-GAAP gross profit divided by total service revenue.  Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant measures to provide investors. Management uses them to measure the margin available to the company after network service costs, in essence a measure of the efficiency of the Company's network.

(8) Excludes equity-based compensation expense of $6,565, $3,215, $7,406, $6,871, $7,523, $4,158 and $8,362 in the three-month periods ended March 31, 2024 through September 30, 2025, respectively and excludes $9,037 and $12,370 of Sprint acquisition costs for the three-month periods ended March 31, 2024 and June 30, 2024, respectively.  There were no Sprint acquisition costs for the three months ended September 30, 2024, December 31, 2024, March 31, 2025, June 30, 2025 or September 30, 2025. 

(9) As of September 30, 2025, Cogent was party to an interest rate swap agreement (the "Swap Agreement") that has the economic effect of modifying the fixed interest rate obligation associated with its Senior Secured 2026 Notes to a variable interest rate obligation based on the Secured Overnight Financing Rate ("SOFR") so that the interest payable on the 2026 Notes effectively became variable based on overnight SOFR. Interest expense includes payments of $12,122, $12,081 and $9,769 for the three-month periods ended June 30, 2024, December 31, 2024 and June 30, 2025, respectively, related to the Swap Agreement. Under GAAP, changes in the valuation of the Swap Agreement are classified with interest expense in the condensed consolidated statements of comprehensive (loss) income.

(10) The gain on bargain purchase from the Sprint acquisition was $1.4 billion as shown below.

(11) Includes cash payments under the IP Transit Services Agreement, as discussed above, of

• $87.5 million for the three months ended March 31, 2024,
• $66.7 million for the three months ended June 30, 2024,
• $25.0 million for the three months ended September 30, 2024,
• $25.0 million for the three months ended December 31, 2024,
• $25.0 million for the three months ended March 31, 2025, and
• $25.0 million for the three months ended June 30, 2025, and
• $25.0 million for the three months ended September 30, 2025.

(12) In connection with the acquisition of the Wireline Business, Cogent acquired 482 technical buildings.  Cogent converted 52 of those buildings to Cogent Data Centers and 86 into Cogent Edge Data Centers.

(13) In connection with the acquisition of the Wireline Business, Cogent hired 942 total employees, including 75 quota bearing sales employees and 114 sales employees.

• As of March 31, 2024, there were 718 employees remaining from the original Wireline Business employees.
• As of June 30, 2024, there were 655 employees remaining from the original Wireline Business employees.
• As of September 30, 2024, there were 635 employees remaining from the original Wireline Business employees.
• As of December 31, 2024, there were 624 employees remaining from the original Wireline Business employees.
• As of March 31, 2025, there were 618 employees remaining from the original Wireline Business employees.
• As of June 30, 2025, there were 603 employees remaining from the original Wireline Business employees.
• As of September 30, 2025, there were 588 employees remaining from the original Wireline Business employees.

(14) In connection with the acquisition of the Wireline Business the Company incurred the following Sprint acquisition costs:

• $9.0 million in the three months ended March 31, 2024, and
• $12.4 million in the three months ended June 30, 2024.

Included in Sprint acquisition costs were the following reimbursable severance costs:

• • $4.3 million of reimbursable severance costs in the three months ended March 31, 2024, and
  • $8.0 million of reimbursable severance costs in the three months ended June 30, 2024.

(15) Net-centric revenue under the CSA (predominantly on-net revenue) was

• $3.2 million for the three months ended March 31, 2024,
• $5.9 million for the three months ended June 30, 2024,
• $4.1 million for the three months ended September 30, 2024,
• $1.5 million for the three months ended December 31, 2024,
• $0.7 million for the three months ended March 31, 2025,
• $1.1 million for the three months ended June 30, 2025, and
• $0.4 million for the three months ended September 30, 2025.

Net-centric customer connections under the CSA were:

• 2,658 as of March 31, 2024,
• 2,117 as of June 30, 2024,
• 2,053 as of September 30, 2024,
• 1,776 as of December 31, 2024,
• 1,478 as of March 31, 2025,
• 1,595 as of June 30, 2025, and
• 1,666 as of September 30, 2025.

 (16) The first quarter 2024 dividend totaling $45.8 million was declared on February 28, 2024, and paid on April 9, 2024.

(17) Included in on-net revenue and enterprise revenue from May 2023 to July 2024 was $1.9 million of monthly revenue from an uneconomic resale customer acquired in connection with the Wireline Business.  The service was cancelled on July 31, 2024.

(18) On July 1, 2024, Cogent changed its estimated useful life of its owned fiber from an average of 14 years to an average of 40 years.

(19) Amounts previously reported and adjusted in our Q4 2024 earnings release were $10,201, $11,469 and $12,822 for the three-month periods March 31, 2024, June 30, 2024 and September 30, 2024, respectively.

(20) Amounts Due from T-Mobile include 1) Due from T-Mobile, IP Transit Services Agreement, current portion, 1) Due from T-Mobile, IP Transit Services Agreement, long-term portion and 3) Due from T-Mobile, Purchase Agreement, all amounts net of their applicable discounts. These amounts totaled $383,981, $323,650, $304,497, $284,979, $265,090, $244,821 and $224,167 as of March 31, 2024 to September 30, 2025, respectively.

NM  Not meaningful

Schedules of Non-GAAP Measures 

EBITDA, EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, EBITDA margin and EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, margin

EBITDA represents net cash flows provided by operating activities plus changes in operating assets and liabilities, cash interest expense and cash income tax expense.  Management believes the most directly comparable measure to EBITDA calculated in accordance with generally accepted accounting principles in the United States, or GAAP, is net cash provided by operating activities. The Company also believes that EBITDA is a measure frequently used by securities analysts, investors, and other interested parties in their evaluation of issuers.  EBITDA, as adjusted for Sprint acquisition costs and cash payments under the IP Transit Services Agreement with T-Mobile, represents EBITDA plus costs related to the Company's acquisition of the Wireline Business and cash payments made to the Company under the IP Transit Agreement. EBITDA margin is defined as EBITDA divided by total service revenue. EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Agreement margin is defined as EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Agreement, divided by total service revenue.

The Company believes that EBITDA, EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, EBITDA margin and EBITDA as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement margin are useful measures of its ability to service debt, fund capital expenditures, pay dividends and expand its business.  The company believes its EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, is a useful measure because it includes recurring cash flows stemming from the IP Transit Services Agreement that are of the same type as contracted payments under commercial contracts.  The measurements are an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. EBITDA, EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Agreement, EBITDA margin and EBITDA as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Agreement margin are not recognized terms under GAAP and accordingly, should not be viewed in isolation or as a substitute for the analysis of results as reported under GAAP, but rather as a supplemental measure to GAAP. For example, these measures are not intended to reflect the Company's free cash flow, as they do not consider certain current or future cash requirements, such as capital expenditures, contractual commitments, and changes in working capital needs, interest expenses and debt service requirements. The Company's calculations of these measures may also differ from the calculations performed by its competitors and other companies and as such, their utility as a comparative measure is limited.

EBITDA, and EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, are reconciled to net cash provided by operating activities in the table below.