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Cogent Q1 Loss Wider Than Expected, Revenues Decline Y/Y
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Cogent Communications Inc. (CCOI - Free Report) reported soft first-quarter 2025 results, with the bottom and top lines missing the Zacks Consensus Estimate. The Washington, DC-based leading Internet service provider reported a top-line decline year over year, owing to weakness in enterprise and corporate business.
CCOI’s Net Income
The company reported a net loss of $52 million or a loss of $1.09 per share compared with a net loss of $65.3 million or a loss of $1.38 in the year-ago quarter. Despite top-line decline, lower operating expenses led to a narrower loss year over year. However, the bottom line fell short of the Zacks Consensus Estimate by 4 cents.
Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise
Service revenues decreased to $247.1 million from $266.2 million in the year-earlier quarter, owing to a decline in On-Net and Off-Net revenues. The top line missed the consensus estimate by $3 million. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
On-Net revenues in the quarter were $129.6 million, down from $138.6 million in the year-ago quarter. The top line missed our estimate of $130.5 million. Customer connections of On-Net declined 0.9% year over year to 86,781.
Off-Net revenues were $107.3 million compared with $118.2 million in the year-earlier quarter. The segment's customer connections decreased to 27,508 from 34,579 in the year-ago quarter. Net sales missed our revenue estimate of $109.2 million.
Wavelength revenues were $7.1 million in the quarter, up from $3.3 million in the year-ago quarter. The segment's customer connections were 1,322, up from 693 in the prior-year quarter.
Non-core revenues were $3 million, down from $6 million in the year-ago quarter.
The company’s net-centric customer connections increased to 61,795 from 61,599 a year ago. Enterprise customer connections decreased to 13,641 from 19,463 a year ago.
Other Details of CCOI
GAAP gross profit was $33.57 million, up from $26.4 million a year ago, with respective margins of 13.6% and 9.9%. Operating loss was $40.3 million compared with a loss of $59.4 million a year ago.
EBITDA totaled $43.8 million compared with $18.5 million in the year-ago quarter, with respective margins of 17.7% and 6.9%. Cogent raised its quarterly dividend by $0.005 to $1.01 per share for the second quarter of 2025. This was the 51st consecutive quarterly dividend increase from the company.
Cash Flow & Liquidity of CCOI
In the first quarter of 2025, Cogent generated $36.4 million in cash from operations compared with $19.2 million in the year-ago quarter. As of March 31, 2025, the company had $153.8 million in cash and cash equivalents with $543.9 million of finance lease obligations (net of current maturities).
CCOI’s Zacks Rank & Stocks to Consider
Cogent currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks that investors may consider.
In the trailing four quarters, InterDigital delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.
T-Mobile US, Inc. (TMUS - Free Report) carries a Zacks Rank #2 at present. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. It continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint. The 2.5 GHz 5G delivers superfast speeds and extensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives T-Mobile a competitive edge over AT&T and Verizon.
Juniper Networks, Inc. (JNPR - Free Report) sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 4.88%.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators.
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Cogent Q1 Loss Wider Than Expected, Revenues Decline Y/Y
Cogent Communications Inc. (CCOI - Free Report) reported soft first-quarter 2025 results, with the bottom and top lines missing the Zacks Consensus Estimate. The Washington, DC-based leading Internet service provider reported a top-line decline year over year, owing to weakness in enterprise and corporate business.
CCOI’s Net Income
The company reported a net loss of $52 million or a loss of $1.09 per share compared with a net loss of $65.3 million or a loss of $1.38 in the year-ago quarter. Despite top-line decline, lower operating expenses led to a narrower loss year over year. However, the bottom line fell short of the Zacks Consensus Estimate by 4 cents.
Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise
Cogent Communications Holdings, Inc. price-consensus-eps-surprise-chart | Cogent Communications Holdings, Inc. Quote
CCOI’s Revenues
Service revenues decreased to $247.1 million from $266.2 million in the year-earlier quarter, owing to a decline in On-Net and Off-Net revenues. The top line missed the consensus estimate by $3 million. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
On-Net revenues in the quarter were $129.6 million, down from $138.6 million in the year-ago quarter. The top line missed our estimate of $130.5 million. Customer connections of On-Net declined 0.9% year over year to 86,781.
Off-Net revenues were $107.3 million compared with $118.2 million in the year-earlier quarter. The segment's customer connections decreased to 27,508 from 34,579 in the year-ago quarter. Net sales missed our revenue estimate of $109.2 million.
Wavelength revenues were $7.1 million in the quarter, up from $3.3 million in the year-ago quarter. The segment's customer connections were 1,322, up from 693 in the prior-year quarter.
Non-core revenues were $3 million, down from $6 million in the year-ago quarter.
The company’s net-centric customer connections increased to 61,795 from 61,599 a year ago. Enterprise customer connections decreased to 13,641 from 19,463 a year ago.
Other Details of CCOI
GAAP gross profit was $33.57 million, up from $26.4 million a year ago, with respective margins of 13.6% and 9.9%. Operating loss was $40.3 million compared with a loss of $59.4 million a year ago.
EBITDA totaled $43.8 million compared with $18.5 million in the year-ago quarter, with respective margins of 17.7% and 6.9%. Cogent raised its quarterly dividend by $0.005 to $1.01 per share for the second quarter of 2025. This was the 51st consecutive quarterly dividend increase from the company.
Cash Flow & Liquidity of CCOI
In the first quarter of 2025, Cogent generated $36.4 million in cash from operations compared with $19.2 million in the year-ago quarter. As of March 31, 2025, the company had $153.8 million in cash and cash equivalents with $543.9 million of finance lease obligations (net of current maturities).
CCOI’s Zacks Rank & Stocks to Consider
Cogent currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks that investors may consider.
InterDigital (IDCC - Free Report) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the trailing four quarters, InterDigital delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.
T-Mobile US, Inc. (TMUS - Free Report) carries a Zacks Rank #2 at present. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. It continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint. The 2.5 GHz 5G delivers superfast speeds and extensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives T-Mobile a competitive edge over AT&T and Verizon.
Juniper Networks, Inc. (JNPR - Free Report) sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 4.88%.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators.