Cogent Communications Reports 7.2% Revenue Decline and $52M Net Loss in Q1 2025

Cogent Communications Holdings, Inc. reported a decline in service revenue for the first quarter of 2025, totaling $247.0 million, down 7.2% from $266.2 million in the same period last year. The company attributed this decrease to the cancellation of low-margin customers acquired through its acquisition of Sprint Communications, as well as a reduction in revenue from its commercial agreement with T-Mobile. Despite the revenue drop, Cogent's operating expenses decreased significantly by 11.7% to $287.3 million, primarily due to reduced network operations costs and the absence of acquisition-related expenses that were present in the previous year.

The company’s net loss for the quarter was $52.0 million, an improvement from a net loss of $65.3 million in the prior year. This reduction in losses was supported by a decrease in operating expenses, particularly in network operations, which fell by 18.6% to $137.4 million. Additionally, interest income from the IP Transit Services Agreement with T-Mobile decreased to $4.7 million from $7.3 million, reflecting the impact of the agreement's structure and the company's ongoing integration of the Sprint Business.

In terms of operational metrics, Cogent reported a total of 45,295 corporate customer connections, a decrease of 12.6% from the previous year, while net-centric connections remained stable at 61,795. The company also saw a significant increase in wavelength service revenue, which rose 114% to $7.1 million, indicating a successful expansion of its product offerings following the Sprint acquisition. As of March 31, 2025, Cogent's total assets stood at $3.1 billion, with cash and cash equivalents totaling $153.8 million, down from $198.5 million at the end of 2024.

Looking ahead, Cogent plans to continue focusing on integrating the Sprint Business and optimizing its operations to enhance profitability. The company expects to leverage its expanded network and customer base to drive future growth, particularly in the enterprise segment. Additionally, Cogent has maintained its dividend policy, declaring a quarterly dividend of $1.01 per share, reflecting its commitment to returning capital to shareholders while managing its liquidity and capital requirements effectively. The company remains cautious about potential economic uncertainties and their impact on customer demand and operational performance.