Cogent Communications (CCOI) Q1 2026 earnings summary

Executive summary

• Service revenue for Q1 2026 was $239.2M, down 0.6% sequentially and 3.2% year-over-year, with declines driven by cancellations of low-margin and non-core customers and ongoing Sprint wireline declines, partially offset by growth in legacy and wavelength services.

• Wavelength revenue surged 12.3% sequentially and 90.8% year-over-year to $13.6M, with customer connections up 71.2% year-over-year.

• Adjusted EBITDA was $70.2M, up 2.1% year-over-year, with an adjusted margin of 29.3%.

• Net loss improved to $39.5M from $52.0M year-over-year, reflecting lower depreciation and amortization expenses.

• The company continues to integrate acquired businesses, focusing on cost reductions, network expansion, and monetizing acquired assets.

Financial highlights

• On-net revenue grew 1.0% sequentially and 4.6% year-over-year to $135.6M; off-net revenue declined 4.2% sequentially and 17.0% year-over-year to $89.0M.

• Non-core revenue fell 17.9% sequentially and 66.6% year-over-year to $1.0M.

• Non-GAAP gross margin was 46.1%, up 1.5% year-over-year due to cost reductions and product optimization.

• Net cash from operating activities was $14.8M, up from $(6.0)M in Q4 2025.

• Cash, cash equivalents, and restricted cash: $179.3M as of March 31, 2026.

Outlook and guidance

• Management expects continued cost reduction synergies and revenue growth from integration of acquired businesses, with a focus on expanding wavelength and optical transport services and increasing on-net buildings.

• Long-term average revenue growth rate expected at 6%-8%, with EBITDA margin expansion of ~200 bps per year.

• Dividend policy remains subject to board discretion and financial conditions.

• Guidance targets are multi-year and not specific to quarters or years.

• On-net and wavelength services remain the primary growth drivers; off-net and non-core revenues expected to continue declining.