Cogent Communications Reports 3.2% Revenue Decline and $39.5 Million Net Loss in Q1 2026

Cogent Communications Holdings, Inc. reported a decline in service revenue for the first quarter of 2026, totaling $239.2 million, down 3.2% from $247.0 million in the same period last year. The company experienced a net loss of $39.5 million, an improvement from a loss of $52.0 million in the prior year. This resulted in a basic and diluted net loss per share of $0.83, compared to $1.09 in the previous year. The decrease in revenue was attributed to the cancellation of low-margin and non-core customers acquired through the recent acquisition of the Cogent Fiber Business, partially offset by growth in customer numbers and increased revenue from wavelength services.

In terms of operational metrics, Cogent's customer connections showed mixed results. The number of corporate customer connections decreased by 7.5% to 41,903, while net-centric connections increased by 5.3% to 65,098. The company also reported a significant increase in wavelength revenue, which rose by 90.8% to $13.6 million, reflecting the successful integration of the acquired fiber network. The total number of on-net buildings connected to Cogent's network increased to 3,605, up from 3,500 a year earlier, indicating ongoing geographic expansion.

Cogent's operational expenses decreased significantly, with total operating expenses falling to $255.6 million from $287.3 million in the previous year, primarily due to reduced depreciation and amortization costs. The company reported a 28.9% decrease in depreciation and amortization expenses, which was attributed to the full depreciation of certain acquired assets. Interest expenses rose by 28.2% to $43.9 million, driven by the issuance of new debt instruments, including the 2032 Notes and the New IPv4 Notes.

Looking ahead, Cogent remains focused on leveraging its recent acquisition of the Cogent Fiber Business to enhance its service offerings and improve profitability. The company anticipates achieving significant cost and revenue synergies from the integration of the acquired network. Additionally, management is optimistic about expanding its customer base, particularly among enterprise clients, and increasing its share in the optical wavelength market. The company has also approved a quarterly dividend of $0.02 per share, reflecting its commitment to returning capital to shareholders while navigating the challenges posed by the current economic environment.