Financial and Business Highlights

Cogent sold ten of its owned data centers for net proceeds of $224.2 million resulting in a gain of $130.7 million in Q2 2026.Service revenue was $235.6 million for Q2 2026 and was $239.2 million for Q1 2026.On-net revenue, including wavelengths, increased by 0.7% sequentially from Q1 2026 to $150.2 million for Q2 2026 and increased by 6.2% from Q2 2025.EBITDA, as adjusted, was $71.1 million for Q2 2026 and increased by 1.3% from Q1 2026.EBITDA, as adjusted, margin was 30.2% for Q2 2026 and was 29.3% for Q1 2026.IP Network traffic for Q2 2026 increased by 2% from Q1 2026 and increased by 16% from Q2 2025.Total cash and restricted cash at the end of Q2 2026 was $369.7 million.Cogent approved a quarterly dividend of $0.02 per share for Q2 2026.Cogent purchased $20.4 million par value of its 2032 secured notes at a discount for a gain of $1.6 million during Q2 2026.Cogent purchased an additional $118.4 million of its 2032 secured notes at a discount for a gain of $11.8 million during the month of July 2026.Cogent's net leverage ratio, adjusted for amounts due from T-Mobile, declined to 6.23 for Q2 2026 compared to 6.79 for Q1 2026 and 6.61 for Q2 2025.WASHINGTON, Aug. 6, 2026 /PRNewswire/ -- Cogent Communications Holdings, Inc. ( CCOI ) ("Cogent") today announced service revenue of $235.6 million for the three months ended June 30, 2026, a decrease of 1.5% from the three months ended March 31, 2026 and a decrease of 4.3% from the three months ended June 30, 2025.

Foreign exchange rates negatively impacted service revenue growth from the three months ended March 31, 2026 to the three months ended June 30, 2026 by $0.3 million and positively impacted service revenue growth from the three months ended June 30, 2025 to the three months ended June 30, 2026 by $0.7 million. On a constant currency basis, service revenue decreased by 1.4% from the three months ended March 31, 2026 to the three months ended June 30, 2026 and decreased by 4.6% from the three months ended June 30, 2025 to the three months ended June 30, 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 $135.4 million for the three months ended June 30, 2026, a decrease of 0.1% from the three months ended March 31, 2026 and an increase of 2.3% from the three months ended June 30, 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 $84.5 million for the three months ended June 30, 2026, a decrease of 5.1% from the three months ended March 31, 2026 and a decrease of 17.3% from the three months ended June 30, 2025.

Wavelength revenue was $14.8 million for the three months ended June 30, 2026, an increase of 9.2% from the three months ended March 31, 2026 and an increase of 63.8% from the three months ended June 30, 2025.

Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell. Non-core revenue was $0.9 million for the three months ended June 30, 2026, $1.0 million for the three months ended March 31, 2026 and $2.7 million for the three months ended June 30, 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 3.0% from the three months ended March 31, 2026 to $57.6 million for the three months ended June 30, 2026 and increased by 72.1% from the three months ended June 30, 2025. 

GAAP gross margin was 24.5% for the three months ended June 30, 2026, 23.4% for the three months ended March 31, 2026 and 13.6% for the three months ended June 30, 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 increased by 0.3% from the three months ended March 31, 2026 to $110.7 million for the three months ended June 30, 2026 and increased by 1.3% from the three months ended June 30, 2025.

Non-GAAP gross margin was 47.0% for the three months ended June 30, 2026, 46.1% for the three months ended March 31, 2026 and 44.4% for the three months ended June 30, 2025.

Net cash provided by (used in) operating activities was $3.2 million for the three months ended June 30, 2026, $14.8 million for the three months ended March 31, 2026 and ($44.0) million for the three months ended June 30, 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, 2026 and June 30, 2025 and $33.3 million for the three months ended June 30, 2026. The $8.3 million monthly payment for July 2026 was paid to Cogent on June 30, 2026.

Earnings before interest, taxes, depreciation and amortization (EBITDA), was $46.1 million for the three months ended June 30, 2026, $45.2 million for the three months ended March 31, 2026 and $48.5 million for the three months ended June 30, 2025.

EBITDA margin, was 19.6% for the three months ended June 30, 2026, 18.9% for the three months ended March 31, 2026 and 19.7% for the three months ended June 30, 2025. 

EBITDA, as adjusted, for cash paid under the IP Transit Services Agreement, was $71.1 million for the three months ended June 30, 2026, $70.2 million for the three months ended March 31, 2026 and $73.5 million for the three months ended June 30, 2025. The $8.3 million monthly payment for July 2026 paid to Cogent on June 30, 2026 was not included in EBITDA, as adjusted for the three months ended June 30, 2026.

EBITDA margin, as adjusted for cash paid under the IP Transit Services Agreement, was 30.2% for the three months ended June 30, 2026, 29.3% for the three months ended March 31, 2026 and 29.8% for the three months ended June 30, 2025. 

Basic and diluted net earnings (loss) per share was $1.39 and $1.38 for the three months ended June 30, 2026, $(0.83) for the three months ended March 31, 2026 and was $(1.21) for the three months ended June 30, 2025. The gain on the sale of ten owned data centers was $130.7 million and included in earnings per share for the three months ended June 30, 2026.

Total customer connections decreased by 2.4% from June 30, 2025 to 115,839 as of June 30, 2026 and decreased by 0.8% from March 31, 2026. On-net customer connections increased by 0.7% from June 30, 2025 to 88,013 as of June 30, 2026 and increased by 0.1% from March 31, 2026. Off-net customer connections decreased by 12.2% from June 30, 2025 to 23,033 as of June 30, 2026 and decreased by 4.1% from March 31, 2026. Wavelength customer connections increased by 66.4% from June 30, 2025 to 2,445 as of June 30, 2026 and increased by 8.0% from March 31, 2026. Non-core customer connections were 2,348 as of June 30, 2026, 2,633 as of March 31, 2026 and 3,615 as of June 30, 2025. 

The number of on-net buildings increased by 98 on-net buildings from June 30, 2025 to 3,627 as of June 30, 2026 and increased by 22 on-net buildings from March 31, 2026.

Amendment to 2032 Secured Notes

In the three months ended June 30, 2026, Cogent began to solicit consents from the holders of its 2032 secured notes to amend the indenture for its 2032 secured notes. In June 2026, Cogent obtained approval from a majority of the holders of its 2032 secured notes and the First Supplemental Indenture became effective. 

The First Supplemental Indenture includes, among other provisions, the following:An increase to the maximum secured debt leverage ratio from 4.00 to 4.75.A commitment to use at least $175.0 million of the proceeds from the sale of data centers to repurchase its debt obligations at a discount.Purchases of 2032 Secured Notes

During the three months ended June 30, 2026, Cogent purchased $20.4 million par value of its 2032 secured notes at an average price of $91.955, resulting in a gain of $1.6 million. 

In July 2026, Cogent purchased an additional $118.4 million par value of its 2032 secured notes at an average price of $90.071 resulting in a gain of $11.8 million.

Total purchases of Cogent's 2032 secured notes through July 31, 2026, were $138.8 million at an average price of $90.348, for a total gain of $13.4 million.

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 June 30, 2026, Cogent was offering optical wavelength services in 1,137 locations in the United States, Mexico and Canada.

Quarterly Dividend Approved

On August 5, 2026, Cogent's Board approved a regular quarterly dividend of $0.02 per share payable on September 4, 2026 to shareholders of record on August 21, 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 August 6, 2026 to discuss Cogent's operating results for the second 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 ( CCOI )

Cogent Communications ( 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 308 markets globally.

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

(1) In connection with the acquisition of the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications (now Cogent Fiber LLC) and its subsidiaries (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, $319 and $97 in the three-month periods ended March 31, 2025 through June 30, 2026 respectively.  Network operations expense includes excise taxes, including Universal Service Fund fees, of $20,200, $19,998, $19,188, $19,786, $19,490 and $18,889 in the three-month periods ended March 31, 2025 through June 30, 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, $7,244 and $7,545 in the three-month periods ended March 31, 2025 through June 30, 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 income (loss).

(10) Includes cash payments under the IP Transit Services Agreement, as discussed above, of $25.0 million for each of the periods from March 31, 2025 to June 30, 2026. The $8.3 million monthly payment for July 2026 was received on June 30, 2026 and excluded from EBITDA, as adjusted for the three months ended June 30, 2026 since it relates to the three months ended September 30, 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.As of June 30, 2026, there were 506 employees remaining from the original Wireline Business employees.(13) Net-centric revenue under the commercial agreement (the "CSA") with TMUSA for colocation and connectivity services(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,$0.5 million for the three months ended March 31, 2026, and$0.9 million for the three months ended June 30, 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, 2025,1,676 as of March 31, 2026, and1,803 as of June 30, 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, $181,670 and $151,479 as of March 31, 2025 to June 30, 2026, respectively.

(15) The $8.3 million cash payment under the IP Transit Services Agreement for July 2026 was received on June 30, 2026 and excluded from EBITDA, as adjusted for the three months ended June 30, 2026 since it relates to the three months ended September 30, 2026.

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.

Constant currency revenue is reconciled to service revenue as reported in the tables below.

Constant currency impact on revenue changes – sequential periods

Constant currency impact on revenue changes – prior year periods

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

Constant currency and excise tax impact on revenue changes – prior year periods

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.

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.

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:

Ratios under the Company's $600 million 2032 Secured Notes (2)

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.

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;; 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, 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 rules by 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, March 31, 2026 and June 30, 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.

View original content to download multimedia:https://www.prnewswire.com/news-releases/cogent-communications-reports-second-quarter-2026-results-302844087.html

SOURCE Cogent Communications Holdings, Inc. ( CCOI )