Cogent Communications Reports $1.036 Billion Revenue, Net Loss of $204.1 Million for Fiscal Year 2024

Cogent Communications Holdings, Inc. reported a service revenue of $1.036 billion for the fiscal year ending December 31, 2024, marking a 10.1% increase from $940.9 million in 2023. The company attributed this growth primarily to the revenue generated from its acquisition of Sprint Communications, which was finalized on May 1, 2023. The acquisition added significant assets, including a long-haul fiber network and a customer base that includes larger enterprise clients. However, the company also faced increased operational costs, with network operations expenses rising by 17.9% to $641.8 million, driven by the integration of Sprint's operations and expansion activities.

In terms of profitability, Cogent reported a net loss of $204.1 million for 2024, a significant decline from a net income of $1.273 billion in the previous year, which included a one-time gain of $1.4 billion from the bargain purchase of Sprint. The loss was influenced by higher interest expenses, which increased by 32.1% to $123.3 million, and depreciation and amortization expenses that rose by 28.3% to $298 million. The company also incurred $21.4 million in acquisition-related costs associated with the Sprint acquisition.

Operationally, Cogent's customer base saw a shift, with corporate customer connections decreasing by 14.9% to 46,371, while enterprise customer connections increased by 26.2% to 14,776. The company reported a total of 3,453 on-net buildings connected to its network, up from 3,277 in 2023, reflecting its ongoing efforts to expand its geographic footprint. Additionally, the company has begun offering optical wavelength and optical transport services, which contributed to a 239.6% increase in wavelength revenue to $19.2 million.

Looking ahead, Cogent aims to leverage its expanded capabilities and customer base to enhance profitability and cash flow. The company plans to continue focusing on integrating Sprint's operations, optimizing costs, and expanding its service offerings. However, it also faces challenges, including ongoing market competition and the potential impact of economic conditions on customer demand. The company has indicated that it will monitor its liquidity and capital requirements closely, especially in light of its substantial debt obligations, which totaled $2 billion as of December 31, 2024.