Cogent Communications Reports 5.5% Revenue Decline in Q2 2025

Cogent Communications Holdings, Inc. reported a decline in financial performance for the second quarter of 2025, with service revenue totaling $246.2 million, a decrease of 5.5% from $260.4 million in the same period last year. For the first half of 2025, total service revenue was $493.3 million, down 6.3% from $526.6 million in the first half of 2024. The company experienced an operating loss of $31.5 million for the quarter, an improvement from a loss of $47.1 million in the prior year, while the net loss for the quarter was $57.8 million, compared to a net loss of $32.3 million in Q2 2024. The decline in revenue was attributed to the cancellation of low-margin customers acquired through the acquisition of the Cogent Fiber Business and a reduction in revenue from the IP Transit Services Agreement with T-Mobile.

In terms of operational metrics, the company reported a total of 44,307 corporate customer connections as of June 30, 2025, a decrease of 9% from the previous year. The number of net-centric customer connections increased slightly to 62,659, while enterprise customer connections fell significantly by 35.9% to 11,764. The company’s on-net revenue decreased by 6.0% to $132.3 million, while off-net revenue also saw a decline of 8.3% to $102.2 million. However, revenue from wavelength services surged by 149.8% to $9.1 million, reflecting the successful integration of new offerings following the acquisition.

Strategically, Cogent has focused on integrating the Cogent Fiber Business, which was acquired in May 2023 for a nominal fee of $1, with additional working capital adjustments totaling $61.1 million. The acquisition has allowed the company to expand its service offerings, particularly in optical wavelength and optical transport services, which are now available in 938 wave-enabled data centers across North America, Mexico, and Canada. The company aims to leverage these new capabilities to attract larger enterprise customers and enhance its competitive position in the market.

Financially, Cogent's total assets increased to $3.27 billion as of June 30, 2025, up from $3.17 billion at the end of 2024. The company’s cash and cash equivalents rose to $213.7 million, alongside restricted cash of $93.1 million. However, total liabilities also increased significantly to $3.22 billion, primarily due to the issuance of new debt, including $600 million in senior secured notes due in 2032. The company reported a loss on debt extinguishment of $5.6 million related to the redemption of its existing 2026 notes.

Looking ahead, Cogent Communications remains focused on improving its profitability and cash flow while continuing to expand its network and customer base. The company plans to maintain its dividend policy, with a quarterly dividend of $1.015 per share approved for payment in September 2025. Management is optimistic about the potential for revenue growth through the integration of the Cogent Fiber Business and the expansion of its service offerings, despite ongoing challenges in the market and the impact of economic conditions on customer demand.