Cogent Communications Holdings, Inc. ( CCOI Quick Quote CCOI - Free Report) reported relatively healthy fourth-quarter 2021 results, wherein the bottom line surpassed the Zacks Consensus Estimate, but the top line missed the same. Top-line expansion on the back of higher on-net revenues and accretive customer connections drove Cogent’s quarterly performance. Bottom Line
Net income in the December quarter was $18.5 million or 39 cents per share against a net loss of $6.6 million or a loss of 14 cents per share in the prior-year quarter. The year-over-year improvement was primarily driven by unrealized foreign exchange gain on 2024 euro notes in the reported quarter. Adjusted net income in the quarter was 24 cents per share, which beat the Zacks Consensus Estimate by 4 cents.
In 2021, Cogent recorded GAAP net income of $48.2 million or $1.03 per share compared with $6.2 million or 13 cents per share in 2020. Revenues
Quarterly service revenues increased to $147.2 million from $143.9 million in the year-ago quarter, driven by higher on-net revenues. The top line, however, missed the consensus estimate of $149 million. In 2021, total revenues were $589.8 million compared with $568.1 million in 2020.
On-net revenues in the reported quarter grew 3.4% year over year to $110.7 million, reflecting an increase in on-net customer connections. On-net service is provided to customers located in buildings physically connected to Cogent’s network by its facilities. Off-net revenues declined 1% to $36.3 million. Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities. Other Details
GAAP gross profit was $68.2 million, up from $66.6 million for margins of 46.3% each. Total operating expenses were $118.4 million compared with $116.5 million in the prior-year quarter. Operating income was $36.2 million, up from $27.4 million. EBITDA totaled $57.4 million compared with $55.7 million in the year-ago quarter for respective margins of 39% and 38.7%. Total customer connections grew 4.6% to 93,726 on Dec 31, 2021.
Cogent increased its dividend for the 38th consecutive quarter. It increased its quarterly dividend by 2.5 cents per share to 85.5 cents for the first quarter of 2022. Cash Flow & Liquidity
In 2021, Cogent generated $170.3 million of net cash from operating activities compared with $140.3 million in 2020. As of Dec 31, 2021, the company had $319.6 million in cash and cash equivalents with $17 million of finance lease obligations compared with respective tallies of $371.3 million and $15.7 million in the prior-year period.
Zacks Rank & Stocks to Consider
Cogent currently has a Zacks Rank #4 (Sell).
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