Financial and Business Highlights
- Service revenue was $239.2 million for Q1 2026 and was $240.5 million for Q4 2025.
- Wavelength revenue increased by 12.3% sequentially from Q4 2025 to $13.6 million for Q1 2026 and increased by 90.8% from Q1 2025.
- Wavelength customer connections increased by 9.6% sequentially from Q4 2025 to 2,263 connections for Q1 2026 and increased by 71.2% from Q1 2025.
- On-net revenue increased by 1.0% sequentially from Q4 2025 to $135.6 million for Q1 2026 and increased by 4.6% from Q1 2025.
- Revenue from leasing IPv4 addresses increased by 3.9% sequentially from Q4 2025 to $18.0 million for Q1 2026 and increased by 24.8% from Q1 2025.
- EBITDA, as adjusted, was $70.2 million for Q1 2026 and increased by 2.1% from Q1 2025.
- EBITDA, as adjusted, margin was 29.3% for Q1 2026 and was 27.8% for Q1 2025.
- IP Network traffic for Q1 2026 increased by 4% from Q4 2025 and increased by 14% from Q1 2025.
- Cogent approved a quarterly dividend of $0.02 per share for Q2 2026.
WASHINGTON, May 4, 2026 /PRNewswire/ -- Cogent Communications Holdings, Inc. (NASDAQ: CCOI) ("Cogent") today announced service revenue of $239.2 million for the three months ended March 31, 2026, a decrease of 0.6% from the three months ended December 31, 2025 and a decrease of 3.2% from the three months ended March 31, 2025.
Foreign exchange rates positively impacted service revenue growth from the three months ended December 31, 2025 to the three months ended March 31, 2026 by $0.3 million and positively impacted service revenue growth from the three months ended March 31, 2025 to the three months ended March 31, 2026 by $3.4 million. On a constant currency basis, service revenue decreased by 0.7% from the three months ended December 31, 2025 to the three months ended March 31, 2026 and decreased by 4.6% from the three months ended March 31, 2025 to the three months ended March 31, 2026.
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 $135.6 million for the three months ended March 31, 2026, an increase of 1.0% from the three months ended December 31, 2025 and an increase of 4.6% from the three months ended March 31, 2025.
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 $89.0 million for the three months ended March 31, 2026, a decrease of 4.2% from the three months ended December 31, 2025 and a decrease of 17.0% from the three months ended March 31, 2025.
Wavelength revenue was $13.6 million for the three months ended March 31, 2026, an increase of 12.3% from the three months ended December 31, 2025 and an increase of 90.8% from the three months ended March 31, 2025.
Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell. Non-core revenue was $1.0 million for the three months ended March 31, 2026, $1.2 million for the three months ended December 31, 2025 and $3.0 million for the three months ended March 31, 2025.
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 4.0% from the three months ended December 31, 2025 to $55.9 million for the three months ended March 31, 2026 and increased by 66.5% from the three months ended March 31, 2025.
GAAP gross margin was 23.4% for the three months ended March 31, 2026, 22.3% for the three months ended December 31, 2025 and 13.6% for the three months ended March 31, 2025.
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 decreased by 2.0% from the three months ended December 31, 2025 to $110.3 million for the three months ended March 31, 2026 and increased by 0.2% from the three months ended March 31, 2025.
Non-GAAP gross margin was 46.1% for the three months ended March 31, 2026, 46.8% for the three months ended December 31, 2025 and 44.6% for the three months ended March 31, 2025.
Net cash provided by (used in) operating activities was $14.8 million for the three months ended March 31, 2026, $(6.0) million for the three months ended December 31, 2025 and $36.4 million for the three months ended March 31, 2025.
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 for each of the three months ended March 31, 2025, December 31, 2025 and March 31, 2026.
Earnings before interest, taxes, depreciation and amortization (EBITDA), was $45.2 million for the three months ended March 31, 2026, $51.7 million for the three months ended December 31, 2025 and $43.8 million for the three months ended March 31, 2025.
EBITDA margin, was 18.9% for the three months ended March 31, 2026, 21.5% for the three months ended December 31, 2025 and 17.7% for the three months ended March 31, 2025.
Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, for cash paid under the IP Transit Services Agreement, was $70.2 million for the three months ended March 31, 2026, $76.7 million for the three months ended December 31, 2025 and $68.8 million for the three months ended March 31, 2025.
EBITDA margin, as adjusted for cash paid under the IP Transit Services Agreement, was 29.3% for the three months ended March 31, 2026, 31.9% for the three months ended December 31, 2025 and 27.8% for the three months ended March 31, 2025.
Basic and diluted net (loss) per share was $(0.83) for the three months ended March 31, 2026, $(0.64) for the three months ended December 31, 2025 and was $(1.09) for the three months ended March 31, 2025.
Total customer connections decreased by 3.2% from March 31, 2025 to 116,809 as of March 31, 2026 and decreased by 0.7% from December 31, 2025. On-net customer connections increased by 1.3% from March 31, 2025 to 87,899 as of March 31, 2026 and decreased by 0.1% from December 31, 2025. Off-net customer connections decreased by 12.7% from March 31, 2025 to 24,014 as of March 31, 2026 and decreased by 2.6% from December 31, 2025. Wavelength customer connections increased by 71.2% from March 31, 2025 to 2,263 as of March 31, 2026 and increased by 9.6% from December 31, 2025. Non-core customer connections were 2,633 as of March 31, 2026, 2,979 as of December 31, 2025 and 5,120 as of March 31, 2025.
The number of on-net buildings increased by 105 on-net buildings from March 31, 2025 to 3,605 as of March 31, 2026 and increased by 26 on-net buildings from December 31, 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 March 31, 2026, Cogent was offering optical wavelength services in 1,107 locations in the United States, Mexico and Canada.
Quarterly Dividend Approved
On May 1, 2026, Cogent's Board approved a regular quarterly dividend of $0.02 per share payable on June 2, 2026 to shareholders of record on May 18, 2026.
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.
Conference Call and Website Information
Cogent will host a conference call with financial analysts at 8:30 a.m. (ET) on May 4, 2026 to discuss Cogent's operating results for the first quarter of 2026. 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 306 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.
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
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Summary of Financial and Operational Results
Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026
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Metric ($ in 000's, except share, per share, customer connections
and network related data) - unaudited
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On-Net revenue (13) $129,628 $132,331 $135,267 $134,281 $135,568
% Change from previous Qtr. 0.7 % 2.1 % 2.2 % -0.7 % 1.0 %
Off-Net revenue $107,274 $102,177 $95,111 $92,909 $89,023
% Change from previous Qtr. -5.2 % -4.8 % -6.9 % -2.3 % -4.2 %
Wavelength revenue (1) $7,119 $9,057 $10,179 $12,097 $13,585
% Change from previous Qtr. 2.2 % 27.2 % 12.4 % 18.8 % 12.3 %
Non-Core revenue (2) $3,027 $2,682 $1,392 $1,231 $1,011
% Change from previous Qtr. -10.3 % -11.4 % -48.1 % -11.6 % -17.9 %
Service revenue - total (13) $247,048 $246,247 $241,949 $240,518 $239,187
% Change from previous Qtr. -2.1 % -0.3 % -1.7 % -0.6 % -0.6 %
Constant currency total revenue quarterly growth rate - sequential -1.9 % -1.3 % -2.1 % -0.5 % -0.7 %
quarters (3) (13)
Constant currency total revenue quarterly growth rate - year over -6.7 % -6.0 % -6.6 % -5.7 % -4.6 %
year quarters (3) (13)
Constant currency and excise tax impact on total revenue -1.6 % -1.2 % -1.8 % -0.8 % -0.5 %
quarterly growth rate - sequential quarters (3) (13)
Constant currency and excise tax impact on total revenue -6.6 % -6.3 % -6.4 % -5.3 % -4.3 %
quarterly growth rate - year over year quarters (3) (13)
Excise Taxes included in service revenue (4) $20,200 $19,998 $19,188 $19,786 $19,490
% Change from previous Qtr. -3.6 % -1.0 % -4.1 % 3.1 % -1.5 %
IPv4 Revenue, included in On-Net revenue $14,413 $15,320 $17,475 $17,323 $17,992
% Change from previous Qtr. 14.8 % 6.3 % 14.1 % -0.9 % 3.9 %
IPv4 Addresses Billed 12,879,749 13,187,109 14,600,974 15,274,488 15,203,726
% Change from previous Qtr. -1.2 % 2.4 % 10.7 % 4.6 % -0.5 %
Corporate revenue (5) $110,686 $109,047 $105,201 $102,817 $101,041
% Change from previous Qtr. -2.1 % -1.5 % -3.5 % -2.3 % -1.7 %
Net-centric revenue (5) (13) $92,615 $97,309 $100,288 $103,353 $105,756
% Change from previous Qtr. -1.1 % 5.1 % 3.1 % 3.1 % 2.3 %
Enterprise revenue (5) $43,747 $39,891 $36,460 $34,348 $32,390
% Change from previous Qtr. -4.1 % -8.8 % -8.6 % -5.8 % -5.7 %
Network operations expenses (4) $136,949 $136,986 $131,107 $128,035 $128,910
% Change from previous Qtr. -11.5 % 0.0 % -4.3 % -2.3 % 0.7 %
GAAP gross profit (6) $33,571 $33,465 $49,843 $53,742 $55,903
% Change from previous Qtr. 12.5 % -0.3 % 48.9 % 7.8 % 4.0 %
GAAP gross margin (6) 13.6 % 13.6 % 20.6 % 22.3 % 23.4 %
Non-GAAP gross profit (3) (7) $110,099 $109,261 $110,842 $112,483 $110,277
% Change from previous Qtr. 12.8 % -0.8 % 1.4 % 1.5 % -2.0 %
Non-GAAP gross margin (3) (7) 44.6 % 44.4 % 45.8 % 46.8 % 46.1 %
Selling, general and administrative expenses (8) $66,340 $60,766 $62,061 $60,740 $65,094
% Change from previous Qtr. 19.0 % -8.4 % 2.1 % -2.1 % 7.2 %
Depreciation and amortization expense $76,038 $75,290 $60,429 $58,422 $54,055
% Change from previous Qtr. 13.0 % -1.0 % -19.7 % -3.3 % -7.5 %
Equity-based compensation expense $8,013 $4,664 $8,932 $4,808 $7,563
% Change from previous Qtr. 9.1 % -41.8 % 91.5 % -46.2 % 57.3 %
Operating income (loss) $(40,292) $(31,459) $(18,128) $(11,329) $(13,507)
% Change from previous Qtr. 23.0 % 21.9 % 42.4 % 37.5 % -19.2 %
Interest expense (9) $34,015 $48,688 $43,146 $54,135 $47,944
% Change from previous Qtr. -25.0 % 43.1 % -11.4 % 25.5 % -11.4 %
Non-cash change in valuation - Swap Agreement (9) $201 $(8,911) $223 $(9,758) $(4,069)
Net loss $(52,042) $(57,807) $(41,544) $(30,781) $(39,542)
Basic net loss per common share $(1.09) $(1.21) $(0.87) $(0.64) $(0.83)
Diluted net loss per common share $(1.09) $(1.21) $(0.87) $(0.64) $(0.83)
Weighted average common shares - basic 47,676,735 47,592,836 47,603,287 47,724,101 47,774,617
% Change from previous Qtr. 0.3 % -0.2 % 0.0 % 0.3 % 0.1 %
Weighted average common shares - diluted 47,676,735 47,592,836 47,603,287 47,724,101 47,774,617
% Change from previous Qtr. 0.3 % -0.2 % 0.0 % 0.3 % 0.1 %
EBITDA (3) $43,759 $48,495 $48,781 $51,743 $45,183
% Change from previous Qtr. 4.6 % 10.8 % 0.6 % 6.1 % -12.7 %
EBITDA margin (3) 17.7 % 19.7 % 20.2 % 21.5 % 18.9 %
Cash payments under IP Transit Services Agreement (10) $25,000 $25,000 $25,000 $25,000 $25,000
EBITDA, as adjusted for payments under IP Transit Services $68,759 $73,495 $73,781 $76,743 $70,183
Agreement (3) (10)
% Change from previous Qtr. 2.9 % 6.9 % 0.4 % 4.0 % -8.5 %
EBITDA, as adjusted for cash payments under IP Transit Services 27.8 % 29.8 % 30.5 % 31.9 % 29.3 %
Agreement, margin (3) (10)
Net cash provided by (used in) operating activities $36,351 $(44,039) $3,100 $(5,992) $14,834
% Change from previous Qtr. 150.1 % -221.1 % 107.0 % -293.3 % 347.6 %
Capital expenditures $58,088 $56,200 $36,250 $37,031 $46,239
% Change from previous Qtr. 26.0 % -3.3 % -35.5 % 2.2 % 24.9 %
Principal payments of capital (finance) lease obligations $8,003 $8,520 $8,791 $8,528 $13,356
% Change from previous Qtr. -71.4 % 6.5 % 3.2 % -3.0 % 56.6 %
Dividends paid $49,133 $49,560 $49,066 $2,304 $1,299
Gross Leverage Ratio (3) 6.69 8.65 8.24 8.04 8.02
Net Leverage Ratio (3) 6.08 7.52 7.44 7.34 7.41
Gross Leverage Ratio, adjusted for amounts Due from T-Mobile (3) 5.81 7.74 7.45 7.35 7.40
(14)
Net Leverage Ratio, adjusted for amounts Due from T-Mobile (3) 5.21 6.61 6.65 6.64 6.79
(14)
Gross Leverage Ratio under the Company's Indentures (3) 5.86 6.82 5.66 6.13 6.10
Secured Leverage Ratio under the Company's Indentures (3) 3.44 4.20 3.49 3.80 3.79
Interest Coverage Ratio under the Company's Indentures (3) 2.80 2.43 2.62 2.39 2.29
Customer Connections - end of period (13)
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On-Net customer connections 86,781 87,407 87,767 87,944 87,899
% Change from previous Qtr. -0.8 % 0.7 % 0.4 % 0.2 % -0.1 %
Off-Net customer connections 27,508 26,239 25,518 24,656 24,014
% Change from previous Qtr. -5.0 % -4.6 % -2.7 % -3.4 % -2.6 %
Wavelength customer connections (1) 1,322 1,469 1,750 2,064 2,263
% Change from previous Qtr. 18.2 % 11.1 % 19.1 % 17.9 % 9.6 %
Non-Core customer connections (2) 5,120 3,615 3,244 2,979 2,633
% Change from previous Qtr. -11.8 % -29.4 % -10.3 % -8.2 % -11.6 %
Total customer connections (13) 120,731 118,730 118,279 117,643 116,809
% Change from previous Qtr. -2.1 % -1.7 % -0.4 % -0.5 % -0.7 %
Corporate customer connections (5) 45,295 44,307 43,391 42,579 41,903
% Change from previous Qtr. -2.3 % -2.2 % -2.1 % -1.9 % -1.6 %
Net-centric customer connections (5) (13) 61,795 62,659 63,875 64,551 65,098
% Change from previous Qtr. -0.7 % 1.4 % 1.9 % 1.1 % 0.8 %
Enterprise customer connections (5) 13,641 11,764 11,013 10,513 9,808
% Change from previous Qtr. -7.7 % -13.8 % -6.4 % -4.5 % -6.7 %
On-Net Buildings - end of period
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Multi-Tenant office buildings 1,867 1,871 1,869 1,881 1,875
Carrier neutral data center buildings 1,453 1,471 1,482 1,511 1,545
Cogent data centers 101 101 100 100 99
Cogent edge data centers 79 86 86 87 86
Total on-net buildings 3,500 3,529 3,537 3,579 3,605
Total carrier neutral data center nodes 1,668 1,675 1,686 1,715 1,744
Wave enabled locations 883 938 996 1,068 1,107
Square feet - multi-tenant office buildings - on-net 1,015,459,520 1,017,918,826 1,017,433,216 1,025,139,485 1,024,433,714
Total Technical Buildings Owned (11) 482 482 482 482 482
Square feet - Technical Buildings Owned (11) 1,603,569 1,603,569 1,603,569 1,603,569 1,603,569
Network - end of period
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Intercity route miles - Leased 79,867 73,075 72,955 73,218 73,769
Metro route miles - Leased 30,788 31,297 31,388 32,634 33,036
Metro fiber miles - Leased 90,696 92,631 93,338 96,663 97,916
Intercity route miles - Owned 21,883 21,883 21,883 21,883 21,883
Metro route miles - Owned 1,704 1,704 1,704 1,704 1,704
Connected networks - AS's 8,240 8,085 8,043 7,659 7,630
Headcount - end of period (12)
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Sales force - quota bearing (12) 629 628 617 590 568
Sales force - total (12) 820 820 802 777 749
Total employees (12) 1,899 1,889 1,882 1,833 1,795
Sales rep productivity - units per full time equivalent sales rep 3.8 4.8 4.6 4.1 4.1
("FTE") per month
FTE - sales reps 605 588 592 585 559
(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 $490, $506, $570, $319 and $319 in the three-month periods ended March 31, 2025 through March 31, 2026 respectively. Network operations expense includes excise taxes, including Universal Service Fund fees, of $20,200, $19,998, $19,188, $19,786 and $19,490 in the three-month periods ended March 31, 2025 through March 31, 2026, 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 $7,523, $4,158, $8,362, $4,489 and $7,244 in the three-month periods ended March 31, 2025 through March 31, 2026, respectively.
(9) Through February 5, 2026, 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 Cogent's 2026 Notes effectively became variable based on overnight SOFR. Interest expense includes payments of $9,880 and $4,078 for the three-month periods ended December 31, 2025 and March 31, 2026, 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) Includes cash payments under the IP Transit Services Agreement, as discussed above, of
- $25.0 million for the three months ended March 31, 2025, and
- $25.0 million for the three months ended June 30, 2025,
- $25.0 million for the three months ended September 30, 2025,
- $25.0 million for the three months ended December 31, 2025, and
- $25.0 million for the three months ended March 31, 2026.
(11) 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 87 into Cogent Edge Data Centers.
(12) 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, 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.
- As of December 31, 2025, there were 569 employees remaining from the original Wireline Business employees.
- As of March 31, 2026, there were 559 employees remaining from the original Wireline Business employees.
(13) Net-centric revenue under the CSA (predominantly on-net revenue) was
- $0.7 million for the three months ended March 31, 2025,
- $1.1 million for the three months ended June 30, 2025,
- $0.4 million for the three months ended September 30, 2025,
- $0.4 million for the three months ended December 31, 2025, and
- $0.5 million for the three months ended March 31, 2026.
Net-centric customer connections under the CSA were:
- 1,478 as of March 31, 2025,
- 1,595 as of June 30, 2025,
- 1,666 as of September 30, 2025,
- 1,676 as of December 31, 2025, and
- 1,676 as of March 31, 2026.
(14) 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 $265,090, $244,821, $224,167, $203,120 and $181,670 as of March 31, 2025 to March 31, 2026, respectively.
NM Not meaningful
Schedules of Non-GAAP Measures
EBITDA, EBITDA, as adjusted for cash payments made to the Company under the IP Transit Services Agreement, EBITDA margin and EBITDA, as adjusted for 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 cash payments under the IP Transit Services Agreement with T-Mobile, represents EBITDA 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 cash payments made to the Company under the IP Transit Agreement margin is defined as EBITDA, as adjusted for 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 cash payments made to the Company under the IP Transit Services Agreement, EBITDA margin and EBITDA as adjusted for 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 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 cash payments made to the Company under the IP Transit Agreement, EBITDA margin and EBITDA as adjusted for 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 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.
Q1 Q2 Q3 Q4 Q1
2025 2025 2025 2025 2026
($ in 000's) - unaudited
Net cash provided by (used in) operating activities $36,351 $(44,039) $3,100 $(5,992) $14,834
Changes in operating assets and liabilities $(26,614) $42,244 $8,941 $7,795 $(13,375)
Cash interest expense and income tax expense 34,022 50,290 36,740 49,940 43,724
EBITDA $43,759 $48,495 $48,781 $51,743 $45,183
PLUS: Cash payments made to the Company under IP Transit Services Agreement 25,000 25,000 25,000 25,000 25,000
EBITDA, as adjusted for cash payments made to the Company under IP Transit Services Agreement $68,759 $73,495 $73,781 $76,743 $70,183
EBITDA margin 17.7 % 19.7 % 20.2 % 21.5 % 18.9 %
EBITDA, as adjusted for cash payments made to the Company under IP Transit Services Agreement, margin 27.8 % 29.8 % 30.5 % 31.9 % 29.3 %
Constant currency revenue is reconciled to service revenue as reported in the tables below.
Constant currency impact on revenue changes - sequential periods
($ in 000's) - unaudited Q1 Q2 Q3 Q4 Q1
2025 2025 2025 2025 2026
Service revenue, as reported - current period $247,048 $246,247 $241,949 $240,518 $239,187
Impact of foreign currencies on service revenue 542 (2,419) (938) 191 (253)
Service revenue - as adjusted for currency impact (1) $247,590 $243,828 $241,011 $240,709 $238,934
Service revenue, as reported - prior sequential period $252,291 $247,048 $246,247 $241,949 $240,518
Constant currency revenue increase (decrease) $(4,701) $(3,220) $(5,236) $(1,240) $(1,584)
Constant currency revenue percent increase (decrease) -1.9 % -1.3 % -2.1 % -0.5 % -0.7 %
(1) Service revenue, as adjusted for currency impact, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior sequential period. The
Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted
for currency impact, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.
Constant currency impact on revenue changes - prior year periods
($ in 000's) - unaudited Q1 Q2 Q3 Q4 Q1
2025 2025 2025 2025 2026
Service revenue, as reported - current period $247,048 $246,247 $241,949 $240,518 $239,187
Impact of foreign currencies on service revenue 1,258 (1,507) (1,806) (2,659) (3,420)
Service revenue - as adjusted for currency impact (2) $248,306 $244,740 $240,143 $237,859 $235,767
Service revenue, as reported - prior year period $266,168 $260,443 $257,202 $252,291 $247,048
Constant currency revenue increase $(17,862) $(15,703) $(17,059) $(14,432) $(11,281)
Constant currency percent revenue increase -6.7 % -6.0 % -6.6 % -5.7 % -4.6 %
(2) Service revenue, as adjusted for currency impact, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the comparable prior year period.
The Company believes that disclosing year over year revenue growth without the impact of foreign currencies on service revenue is a useful measure of revenue growth. Service revenue, as adjusted for currency
impact, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.
Revenue on a constant currency basis and adjusted for the impact of excise taxes is reconciled to service revenue as reported in the tables below.
Constant currency and excise tax impact on revenue changes - sequential periods
($ in 000's) - unaudited Q1 Q2 Q3 Q4 Q1
2025 2025 2025 2025 2026
Service revenue, as reported - current period $247,048 $246,247 $241,949 $240,518 $239,187
Impact of foreign currencies on service revenue 542 (2,419) (938) 191 (253)
Impact of excise taxes on service revenue 760 202 832 (598) 296
Service revenue - as adjusted for currency and excise taxes impact (3) $248,350 $244,030 $241,843 $240,111 $239,230
Service revenue, as reported - prior sequential period $252,291 $247,048 $246,247 $241,949 $240,518
Constant currency and excise taxes revenue increase (decrease) $(3,941) $(3,018) $(4,404) $(1,838) $(1,288)
Constant currency and excise tax revenue percent increase (decrease) -1.6 % -1.2 % -1.8 % -0.8 % -0.5 %
(3) Service revenue, as adjusted for currency impact and the impact of excise taxes, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the
prior sequential period and adjusting for the changes in excise taxes recorded as revenue between the periods presented. The Company believes that disclosing quarterly sequential revenue growth without the
impact of foreign currencies and excise taxes on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for the impact of foreign currency and excise taxes, is an
integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.
Constant currency and excise tax impact on revenue changes - prior year periods
($ in 000's) - unaudited Q1 Q2 Q3 Q4 Q1
2025 2025 2025 2025 2026
Service revenue, as reported - current period $247,048 $246,247 $241,949 $240,518 $239,187
Impact of foreign currencies on service revenue 1,258 (1,507) (1,806) (2,659) (3,420)
Impact of excise taxes on service revenue 349 (816) 586 1,174 710
Service revenue - as adjusted for currency and excise taxes impact (4) $248,655 $243,924 $240,729 $239,033 $236,477
Service revenue, as reported - prior year period $266,168 $260,443 $257,202 $252,291 $247,048
Constant currency and excise taxes revenue increase $(17,513) $(16,519) $(16,473) $(13,258) $(10,571)
Constant currency and excise tax percent revenue increase -6.6 % -6.3 % -6.4 % -5.3 % -4.3 %
(4) Service revenue, as adjusted for currency impact and the impact of excise taxes, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the
prior year period and adjusting for the changes in excise taxes recorded as revenue between the periods presented. The Company believes that disclosing quarterly sequential revenue growth without the impact
of foreign currencies and excise taxes on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for the impact of foreign currency and excise taxes, is an integral
part of the internal reporting and planning system used by management as a supplement to GAAP financial information.
Non-GAAP gross profit and non-GAAP gross margin
Non-GAAP gross profit and non-GAAP gross margin are reconciled to GAAP gross profit and GAAP gross margin in the table below.
Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026
($ in 000's) - unaudited
Service revenue total $247,048 $246,247 $241,949 $240,518 $239,187
Minus - Network operations expense including equity- 213,477 212,782 192,106 186,776 183,284
based compensation and depreciation and
amortization expense
GAAP Gross Profit (5) $33,571 $33,465 $49,843 $53,742 $55,903
Plus - Equity-based compensation - network 490 506 570 319 319
operations expense
Plus - Depreciation and amortization expense $76,038 $75,290 $60,429 $58,422 $54,055
Non-GAAP Gross Profit (6) $110,099 $109,261 $110,842 $112,483 $110,277
GAAP Gross Margin (5) 13.6 % 13.6 % 20.6 % 22.3 % 23.4 %
Non-GAAP Gross Margin (6) 44.6 % 44.4 % 45.8 % 46.8 % 46.1 %
(5) GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity-based compensation included in network operations expense. GAAP gross margin is
defined as GAAP gross profit divided by total service revenue.
(6) Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross
margin is defined as non-GAAP gross profit divided by total service revenue. Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant measures for investors, as they are
metrics that management uses to measure the margin and amount available to the Company after network service costs, in essence, these are measures of the efficiency of the Company's network.
Gross and Net Leverage Ratios
Gross leverage ratio is defined as total debt divided by the trailing 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement. Net leverage ratio is defined as total net debt (total debt minus cash and cash equivalents) divided by the last 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement. Gross leverage, adjusted for amounts Due from T-Mobile, is defined as total debt minus amounts due from T-Mobile divided by the last 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement. Net leverage, adjusted for amounts Due from T-Mobile, is defined as total net debt (total debt minus cash and cash equivalents) minus amounts due from T-Mobile divided by the last 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement.
Cogent's gross leverage ratios and net leverage ratios are shown below.
($ in 000's) - unaudited As of As of As of As of As of
March 31, June 30, September 30, December 31, March 31,
2025 2025 2025 2025 2026
Cash and cash equivalents & restricted cash $183,970 $306,725 $226,294 $205,112 $179,265
Debt
---
Capital (finance) leases - current portion 24,685 26,523 24,990 26,112 23,967
Capital (finance) leases - long term 543,852 578,634 576,851 597,239 604,981
Senior Secured 2032 Notes 600,000 600,000 600,000 600,000
Senior Secured 2026 Notes 500,000
Secured IPv4 Notes 206,000 380,400 380,400 380,400 380,400
Senior Unsecured 2027 Notes 750,000 750,000 750,000 750,000 750,000
Total debt 2,024,537 2,335,557 2,332,241 2,353,751 2,359,348
Total net debt 1,840,567 2,028,832 2,105,947 2,148,639 2,180,083
Trailing 12 months EBITDA, as adjusted for cash 302,636 269,968 282,888 292,785 294,202
payments from the IP Transit Services Agreement
Gross leverage ratio 6.69 8.65 8.24 8.04 8.02
Net leverage ratio 6.08 7.52 7.44 7.34 7.41
Total amounts Due from T-Mobile $265,090 $244,821 $224,167 $203,120 $181,670
Total debt, adjusted for amounts Due from T-Mobile 1,759,447 2,090,736 2,108,074 2,150,631 2,177,678
Total net debt, adjusted for amounts Due from T-Mobile 1,575,477 1,784,011 1,881,780 1,945,519 1,998,413
Gross leverage ratio, adjusted for amounts Due from T-Mobile 5.81 7.74 7.45 7.35 7.40
Net leverage ratio, adjusted for amounts Due from T-Mobile 5.21 6.61 6.65 6.64 6.79
Ratios under the Company's indentures
Consolidated Leverage Ratio is defined in the Company's Indentures as total debt divided by Consolidated Cash Flow (as defined in the Company's Indentures) for the most recently completed period of four consecutive fiscal quarters of the Company (the "Reference Period"), subject to certain adjustments provided for in the Company's Indentures. Secured Leverage Ratio is defined in the Company's Indentures as total secured debt divided by Consolidated Cash Flow for the Reference Period, subject to certain adjustments provided for in the Company's Indentures. Net leverage ratio is presented as total net debt (total debt minus cash and cash equivalents) divided by the last 12 months Consolidated Cash Flow. Net leverage ratio is not a defined term in the Company's Indentures. Fixed Charge Coverage Ratio is defined in the Company's Indentures as Consolidated Cash Flow for the Reference Period divided by Fixed Charges (as defined in the Company's Indentures) for the Reference Period, which largely consist of interest expense, subject to certain adjustments provided for in the Company's Indentures. Cogent's ratios are shown in the table below.
($ in 000's) - unaudited As of As of As of As of As of
March 31, June 30, 2025 September 30, December 31, March 31,
2025 (2) 2025 (2) 2025 (2) 2026 (2)
Cash and cash equivalents & restricted cash $165,676 $195,165 $136,513 $135,410 $127,334
Debt
---
Capital (finance) leases - current portion 24,685 26,523 24,990 26,112 23,967
Capital (finance) leases - long term 543,852 578,634 576,851 597,239 604,981
Letters of credit 124 130 130 130 130
Senior Secured 2026 Notes 500,000
Senior Secured 2032 Notes 600,000 600,000 600,000 600,000
Senior Unsecured 2027 Notes 750,000 750,000 750,000 750,000 750,000
Total debt 1,818,661 1,955,287 1,951,971 1,973,481 1,979,078
Total net debt 1,652,985 1,760,122 1,815,458 1,838,071 1,851,744
Total secured debt 1,068,661 1,205,287 1,201,971 1,223,481 1,229,078
Consolidated Cash Flow (2) 310,345 286,881 344,739 322,154 324,405
Consolidated Leverage Ratio for the Reference Period 5.86 6.82 5.66 6.13 6.10
Net leverage ratio (1) 5.33 6.14 5.27 5.71 5.71
Secured Leverage Ratio for the Reference Period (2) 3.44 4.20 3.49 3.80 3.79
Fixed Charges for the Reference Period (2) 110,704 118,290 131,688 134,836 141,394
Fixed Charge Coverage Ratio for the Reference Period (2) 2.80 2.43 2.62 2.39 2.29
(1)
Net leverage ratio is not a defined term under the Company's Indentures.
(2) Consolidated Cash Flow as defined in the Company's $600.0 million Secured 2032 Notes issued in June 2025, includes cash payments under the IP Transit Services Agreement with TMUSA. Cash payments under the IP
Transit Services Agreement with TMUSA for the for the most recently completed period of four consecutive fiscal quarters of the Company were $100.0 million.
Ratios under the Company's $600 million 2032 Secured Notes
---
Q2 2025 Q3 2025 Q4 2025 Q1 2026
Consolidated Cash Flow under the Indentures 286,881 344,739 322,154 324,405
PLUS: Cash Payments under IP Transit Services Agreement with TMUSA 100,000 100,000 100,000 100,000
Consolidated Cash Flow - $600.0 million Secured 2032 Notes 386,881 444,739 422,154 424,405
Consolidated Leverage Ratio for the Reference Period - $600.0 million Secured 2032 Notes 5.05 4.39 4.67 4.66
Net leverage ratio - $600.0 million Secured 2032 Notes (1) 4.55 4.08 4.35 4.36
Secured Leverage Ratio for the Reference Period - $600.0 million 2032 Notes 3.12 2.70 2.90 2.90
Fixed Charges for the Reference Period 118,290 131,688 134,836 141,394
Fixed Charge Coverage Ratio for the Reference Period - $600.0 million 2032 Notes 3.27 3.38 3.13 3.00
Cogent's SEC filings are available online via the Investor Relations section of www.cogentco.com or on the Securities and Exchange Commission's website at www.sec.gov.
COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2026 AND DECEMBER 31, 2025
(IN THOUSANDS, EXCEPT SHARE DATA)
March 31, December 31,
2026 2025
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $
140,265 $
148,515
Restricted cash 39,000 56,597
Accounts receivable, net of allowance for credit losses of $5,271 and $4,610, respectively 91,096 88,050
Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of $8,695 and $10,401, 91,305 89,599
respectively
Prepaid expenses and other current assets 68,610 67,820
Total current assets 430,276 450,581
Property and equipment:
Property and equipment 3,696,974 3,642,906
Accumulated depreciation and amortization (1,964,092) (1,921,832)
Total property and equipment, net 1,732,882 1,721,074
Right-of-use leased assets 303,051 310,523
IPv4 intangible assets 458,000 458,000
Other intangible assets, net 10,813 11,251
Deposits and other assets 31,179 34,834
Due from T-Mobile, IP Transit Services Agreement, net of discount of $869 and $2,255, respectively 65,798 89,412
Due from T-Mobile, Purchase Agreement, net of discount of $3,548 and $4,006, respectively 24,567 24,109
Total assets $
3,056,566 $
3,099,784
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $
36,095 $
30,571
Accrued and other current liabilities 112,345 109,582
Current maturities, operating lease liabilities 53,665 54,576
Finance lease obligations, current maturities 23,967 26,112
Total current liabilities 226,072 220,841
Senior secured 2032 notes, net of unamortized debt costs of $1,957 and $2,020, respectively 598,043 597,980
Senior unsecured 2027 notes, net of unamortized debt costs of $1,034 and $1,236, respectively, and 745,333 744,420
discounts of $3,633 and $4,344, respectively
Secured IPv4 notes, net of debt costs of $8,339 and $8,863, respectively 372,061 371,537
Operating lease liabilities, net of current maturities 263,698 269,753
Finance lease obligations, net of current maturities 604,981 597,239
Deferred income tax liabilities 321,724 333,294
Other long-term liabilities 28,816 28,568
Total liabilities 3,160,728 3,163,632
Commitments and contingencies:
Stockholders' deficit:
Common stock, $0.001 par value; 75,000,000 shares authorized; 50,077,663 and 50,062,158 shares issued and 50 50
outstanding, respectively
Additional paid-in capital 651,538 643,256
Accumulated other comprehensive (loss) income (6,327) 1,428
Accumulated deficit (749,423) (708,582)
Total stockholders' deficit (104,162) (63,848)
Total liabilities and stockholders' deficit $
3,056,566 $
3,099,784
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COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025
(IN THOUSANDS)
Three Months Ended Three Months Ended
March 31, 2026 March 31, 2025
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $
(39,542) $
(52,042)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 54,055 76,038
Amortization of debt costs and discounts 1,501 1,192
Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements (3,551) (5,111)
Equity-based compensation expense (net of amounts capitalized) 7,563 8,013
Gains on lease terminations and other (2,928)
Deferred income taxes (11,570) (18,554)
Changes in operating assets and liabilities:
Accounts receivable (3,046) 8,979
Prepaid expenses and other current assets (790) 2,261
Accounts payable, accrued liabilities and other long-term liabilities 9,501 17,903
Deposits and other assets 3,641 (2,328)
Net cash provided by operating activities 14,834 36,351
Cash flows from investing activities:
Cash receipts - IP Transit Services Agreement - T-Mobile 25,000 25,000
Purchases of property and equipment (46,239) (58,088)
Net cash used in investing activities (21,239) (33,088)
Cash flows from financing activities:
Dividends paid (1,299) (49,133)
Proceeds from exercises of stock options 121
Principal payments of finance lease obligations (13,356) (8,003)
Net cash used in financing activities (14,655) (57,015)
Effect of exchange rates changes on cash (4,787) 9,806
Net decrease in cash, cash equivalents and restricted cash (25,847) (43,946)
Cash, cash equivalents and restricted cash, beginning of period 205,112 227,916
Cash, cash equivalents and restricted cash, end of period $
179,265 $
183,970
Except for historical information and discussion contained herein, statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Such statements include, but are not limited to statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions.The statements in this release are based upon the current beliefs and expectations of Cogent's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Numerous factors could cause or contribute to such differences, including the impact of our acquisition of the Wireline Business, including our difficulties integrating our business with the acquired Wireline Business, which may result in the combined company not operating as effectively or efficiently as expected; transition services required to support the acquired Wireline Business and the related costs continuing for a longer period than expected; transition related costs associated with the acquisition; the COVID-19 pandemic and the related government policies; delays in the delivery of network equipment or optical fiber; loss of key right-of-way agreements; future economic instability in the global economy, including the risk of economic recession, recent bank failures and liquidity concerns at certain other banks or a contraction of the capital markets, which could affect spending on Internet services and our ability to engage in financing activities; the impact of changing foreign exchange rates (in particular the Euro to USD and Canadian dollar to USD exchange rates) on the translation of our non-USD denominated revenues, expenses, assets and liabilities; legal and operational difficulties in new markets; the imposition of a requirement that we contribute to the US Universal Service Fund on the basis of our Internet revenue; changes in government policy and/or regulation, including net neutrality rulesby the United States Federal Communications Commission and in the area of data protection; cyber-attacks or security breaches of our network; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering arrangements and right-of-way agreements on favorable terms; our reliance on a few equipment vendors, and the potential for hardware or software problems associated with such equipment; the dependence of our network on the quality and dependability of third-party fiber and right-of-way providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; our ability to make payments on our indebtedness as they become due and outcomes in litigation and outcomes in litigation as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year December 31, 2025 and our Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, September 30, 2025 and March 31, 2026.Cogent undertakes no duty to update any forward-looking statement or any information contained in this press release or in other public disclosures at any time.
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SOURCE Cogent Communications Holdings, Inc.
For Public Relations: Jocelyn Johnson, + 1 (202) 295-4299, jajohnson@cogentco.com; For Investor Relations: John Chang, + 1 (202) 295-4212, investor.relations@cogentco.com