Cogent Communications Reports First Quarter 2026 Results

Published: 2026-05-04 07:00:10 ET CCOI

Published on 05/04/2026 at 07:00 am EDT

Financial and Business Highlights

WASHINGTON, May 4, 2026 /PRNewswire/ -- Cogent Communications Holdings, Inc. (NASDAQ: CCOI) ("Cogent") today announced service revenue of $239.2 million for the three months ended March 31, 2026, a decrease of 0.6% from the three months ended December 31, 2025 and a decrease of 3.2% from the three months ended March 31, 2025.

Foreign exchange rates positively impacted service revenue growth from the three months ended December 31, 2025 to the three months ended March 31, 2026 by $0.3 million and positively impacted service revenue growth from the three months ended March 31, 2025 to the three months ended March 31, 2026 by $3.4 million. On a constant currency basis, service revenue decreased by 0.7% from the three months ended December 31, 2025 to the three months ended March 31, 2026 and decreased by 4.6% from the three months ended March 31, 2025 to the three months ended March 31, 2026.

On-net service is provided to customers located in buildings that are physically connected to Cogent's network by Cogent facilities. On-net revenue was $135.6 million for the three months ended March 31, 2026, an increase of 1.0% from the three months ended December 31, 2025 and an increase of 4.6% from the three months ended March 31, 2025.

Off-net customers are located in buildings directly connected to Cogent's network using other carriers' facilities and services to provide the last mile portion of the link from the customers' premises to Cogent's network. Off-net revenue was $89.0 million for the three months ended March 31, 2026, a decrease of 4.2% from the three months ended December 31, 2025 and a decrease of 17.0% from the three months ended March 31, 2025.

Wavelength revenue was $13.6 million for the three months ended March 31, 2026, an increase of 12.3% from the three months ended December 31, 2025 and an increase of 90.8% from the three months ended March 31, 2025.

Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell. Non-core revenue was $1.0 million for the three months ended March 31, 2026, $1.2 million for the three months ended December 31, 2025 and $3.0 million for the three months ended March 31, 2025.

GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity-based compensation included in network operations expense. GAAP gross margin is defined as GAAP gross profit divided by total service revenue. GAAP gross profit increased by 4.0% from the three months ended December 31, 2025 to $55.9 million for the three months ended March 31, 2026 and increased by 66.5% from the three months ended March 31, 2025.

GAAP gross margin was 23.4% for the three months ended March 31, 2026, 22.3% for the three months ended December 31, 2025 and 13.6% for the three months ended March 31, 2025.

Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as Non-GAAP gross profit divided by total service revenue. Non-GAAP gross profit decreased by 2.0% from the three months ended December 31, 2025 to $110.3 million for the three months ended March 31, 2026 and increased by 0.2% from the three months ended March 31, 2025.

Non-GAAP gross margin was 46.1% for the three months ended March 31, 2026, 46.8% for the three months ended December 31, 2025 and 44.6% for the three months ended March 31, 2025.

Net cash provided by (used in) operating activities was $14.8 million for the three months ended March 31, 2026, $(6.0) million for the three months ended December 31, 2025 and $36.4 million for the three months ended March 31, 2025.

IP Transit Services AgreementOn May 1, 2023, the closing date of the Sprint acquisition, Cogent and T-Mobile USA, Inc. ("TMUSA"), a Delaware corporation and direct subsidiary of T-Mobile US, Inc., a Delaware corporation ("T-Mobile"), entered into an agreement for IP transit services (the "IP Transit Services Agreement"), pursuant to which TMUSA will pay Cogent an aggregate of $700.0 million, consisting of (i) $350.0 million paid in equal monthly installments during the first year after the closing date of the Sprint acquisition and (ii) $350.0 million paid in equal monthly installments over the subsequent 42 months. Amounts paid under the IP Transit Services Agreement were $25.0 million for each of the three months ended March 31, 2025, December 31, 2025 and March 31, 2026.

Earnings before interest, taxes, depreciation and amortization (EBITDA), was $45.2 million for the three months ended March 31, 2026, $51.7 million for the three months ended December 31, 2025 and $43.8 million for the three months ended March 31, 2025.

EBITDA margin, was 18.9% for the three months ended March 31, 2026, 21.5% for the three months ended December 31, 2025 and 17.7% for the three months ended March 31, 2025.

Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, for cash paid under the IP Transit Services Agreement, was $70.2 million for the three months ended March 31, 2026, $76.7 million for the three months ended December 31, 2025 and $68.8 million for the three months ended March 31, 2025.

EBITDA margin, as adjusted for cash paid under the IP Transit Services Agreement, was 29.3% for the three months ended March 31, 2026, 31.9% for the three months ended December 31, 2025 and 27.8% for the three months ended March 31, 2025.

Basic and diluted net (loss) per share was $(0.83) for the three months ended March 31, 2026, $(0.64) for the three months ended December 31, 2025 and was $(1.09) for the three months ended March 31, 2025.

Total customer connections decreased by 3.2% from March 31, 2025 to 116,809 as of March 31, 2026 and decreased by 0.7% from December 31, 2025. On-net customer connections increased by 1.3% from March 31, 2025 to 87,899 as of March 31, 2026 and decreased by 0.1% from December 31, 2025. Off-net customer connections decreased by 12.7% from March 31, 2025 to 24,014 as of March 31, 2026 and decreased by 2.6% from December 31, 2025. Wavelength customer connections increased by 71.2% from March 31, 2025 to 2,263 as of March 31, 2026 and increased by 9.6% from December 31, 2025. Non-core customer connections were 2,633 as of March 31, 2026, 2,979 as of December 31, 2025 and 5,120 as of March 31, 2025.

The number of on-net buildings increased by 105 on-net buildings from March 31, 2025 to 3,605 as of March 31, 2026 and increased by 26 on-net buildings from December 31, 2025.

Optical Wave NetworkAcquiring the Sprint network has also allowed Cogent to construct a wavelength network using predominantly owned fiber. This enabled Cogent to expand its product offerings to include optical wavelength services. As of March 31, 2026, Cogent was offering optical wavelength services in 1,107 locations in the United States, Mexico and Canada.

Quarterly Dividend ApprovedOn May 1, 2026, Cogent's Board approved a regular quarterly dividend of $0.02 per share payable on June 2, 2026 to shareholders of record on May 18, 2026.

The payment of any future dividends and any other returns of capital will be at the discretion of the Board and may be reduced, eliminated or increased and will be dependent upon Cogent's financial position, results of operations, available cash, cash flow, capital requirements, limitations under Cogent's debt indentures and other factors deemed relevant by the Board.

Conference Call and Website InformationCogent will host a conference call with financial analysts at 8:30 a.m. (ET) on May 4, 2026 to discuss Cogent's operating results for the first quarter of 2026. Investors and other interested parties may access a live audio webcast of the earnings call in the "Events" section of Cogent's website at www.cogentco.com/events. A replay of the webcast, together with the press release, will be available on the website following the earnings call. A downloadable file of Cogent's "Summary of Financial and Operational Results" and a transcript of its conference call will also be available on Cogent's website following the conference call.

About Cogent Communications

Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1 facilities-based ISP. Cogent specializes in providing businesses with high-speed Internet access, Ethernet transport, optical wavelength, optical transport and colocation services. Cogent's facilities-based, all-optical IP network backbone provides services in 306 markets globally.

Cogent Communications is headquartered at 2450 N Street, NW, Washington, D.C. 20037. For more information, visit www.cogentco.com. Cogent Communications can be reached in the United States at (202) 295-4200 or via email at [email protected].

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

Summary of Financial and Operational Results

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Metric ($ in 000's, except share, per share, customer connectionsand network related data) – unaudited

On-Net revenue (13)

$129,628

$132,331

$135,267

$134,281

$135,568

% Change from previous Qtr.

0.7 %

2.1 %

2.2 %

-0.7 %

1.0 %

Off-Net revenue

$107,274

$102,177

$95,111

$92,909

$89,023

% Change from previous Qtr.

-5.2 %

-4.8 %

-6.9 %

-2.3 %

-4.2 %

Wavelength revenue (1)

$7,119

$9,057

$10,179

$12,097

$13,585

% Change from previous Qtr.

2.2 %

27.2 %

12.4 %

18.8 %

12.3 %

Non-Core revenue (2)

$3,027

$2,682

$1,392

$1,231

$1,011

% Change from previous Qtr.

-10.3 %

-11.4 %

-48.1 %

-11.6 %

-17.9 %

Service revenue – total (13)

$247,048

$246,247

$241,949

$240,518

$239,187

% Change from previous Qtr.

-2.1 %

-0.3 %

-1.7 %

-0.6 %

Constant currency total revenue quarterly growth rate – sequentialquarters (3) (13)

-1.9 %

-1.3 %

-2.1 %

-0.5 %

-0.7 %

Constant currency total revenue quarterly growth rate – year overyear quarters (3) (13)

-6.7 %

-6.0 %

-6.6 %

-5.7 %

-4.6 %

Constant currency and excise tax impact on total revenuequarterly growth rate – sequential quarters (3) (13)

-1.6 %

-1.2 %

-1.8 %

-0.8 %

-0.5 %

Constant currency and excise tax impact on total revenuequarterly growth rate – year over year quarters (3) (13)

-6.6 %

-6.3 %

-6.4 %

-5.3 %

-4.3 %

Excise Taxes included in service revenue (4)

$20,200

$19,998

$19,188

$19,786

$19,490

% Change from previous Qtr.

-3.6 %

-1.0 %

-4.1 %

3.1 %

-1.5 %

IPv4 Revenue, included in On-Net revenue

$14,413

$15,320

$17,475

$17,323

$17,992

% Change from previous Qtr.

14.8 %

6.3 %

14.1 %

-0.9 %

3.9 %

IPv4 Addresses Billed

12,879,749

13,187,109

14,600,974

15,274,488

15,203,726

% Change from previous Qtr.

-1.2 %

2.4 %

10.7 %

4.6 %

-0.5 %

Corporate revenue (5)

$110,686

$109,047

$105,201

$102,817

$101,041

% Change from previous Qtr.

-2.1 %

-1.5 %

-3.5 %

-2.3 %

-1.7 %

Net-centric revenue (5) (13)

$92,615

$97,309

$100,288

$103,353

$105,756

% Change from previous Qtr.

-1.1 %

5.1 %

3.1 %

2.3 %

Enterprise revenue (5)

$43,747

$39,891

$36,460

$34,348

$32,390

% Change from previous Qtr.

-4.1 %

-8.8 %

-8.6 %

-5.8 %

-5.7 %

Network operations expenses (4)

$136,949

$136,986

$131,107

$128,035

$128,910

% Change from previous Qtr.

-11.5 %

0.0 %

-4.3 %

-2.3 %

0.7 %

GAAP gross profit (6)

$33,571

$33,465

$49,843

$53,742

$55,903

% Change from previous Qtr.

12.5 %

-0.3 %

48.9 %

7.8 %

4.0 %

GAAP gross margin (6)

13.6 %

20.6 %

22.3 %

23.4 %

Non-GAAP gross profit (3) (7)

$110,099

$109,261

$110,842

$112,483

$110,277

% Change from previous Qtr.

12.8 %

-0.8 %

1.4 %

1.5 %

-2.0 %

Non-GAAP gross margin (3) (7)

44.6 %

44.4 %

45.8 %

46.8 %

46.1 %

Selling, general and administrative expenses (8)

$66,340

$60,766

$62,061

$60,740

$65,094

% Change from previous Qtr.

19.0 %

-8.4 %

2.1 %

-2.1 %

7.2 %

Depreciation and amortization expense

$76,038

$75,290

$60,429

$58,422

$54,055

% Change from previous Qtr.

13.0 %

-1.0 %

-19.7 %

-3.3 %

-7.5 %

Equity-based compensation expense

$8,013

$4,664

$8,932

$4,808

$7,563

% Change from previous Qtr.

9.1 %

-41.8 %

91.5 %

-46.2 %

57.3 %

Operating income (loss)

$(40,292)

$(31,459)

$(18,128)

$(11,329)

$(13,507)

% Change from previous Qtr.

23.0 %

21.9 %

42.4 %

37.5 %

-19.2 %

Interest expense (9)

$34,015

$48,688

$43,146

$54,135

$47,944

% Change from previous Qtr.

-25.0 %

43.1 %

-11.4 %

25.5 %

-11.4 %

Non-cash change in valuation – Swap Agreement (9)

$201

$(8,911)

$223

$(9,758)

$(4,069)

Net loss

$(52,042)

$(57,807)

$(41,544)

$(30,781)

$(39,542)

Basic net loss per common share

$(1.09)

$(1.21)

$(0.87)

$(0.64)

$(0.83)

Diluted net loss per common share

$(1.09)

$(1.21)

$(0.87)

$(0.64)

$(0.83)

Weighted average common shares – basic

47,676,735

47,592,836

47,603,287

47,724,101

47,774,617

% Change from previous Qtr.

0.3 %

-0.2 %

0.0 %

0.3 %

0.1 %

Weighted average common shares – diluted

47,676,735

47,592,836

47,603,287

47,724,101

47,774,617

% Change from previous Qtr.

0.3 %

-0.2 %

0.0 %

0.3 %

0.1 %

EBITDA (3)

$43,759

$48,495

$48,781

$51,743

$45,183

% Change from previous Qtr.

4.6 %

10.8 %

0.6 %

6.1 %

-12.7 %

EBITDA margin (3)

17.7 %

19.7 %

20.2 %

21.5 %

18.9 %

Cash payments under IP Transit Services Agreement (10)

$25,000

EBITDA, as adjusted for payments under IP Transit ServicesAgreement (3) (10)

$68,759

$73,495

$73,781

$76,743

$70,183

% Change from previous Qtr.

2.9 %

6.9 %

0.4 %

4.0 %

-8.5 %

EBITDA, as adjusted for cash payments under IP Transit ServicesAgreement, margin (3) (10)

27.8 %

29.8 %

30.5 %

31.9 %

29.3 %

Net cash provided by (used in) operating activities

$36,351

$(44,039)

$3,100

$(5,992)

$14,834

% Change from previous Qtr.

150.1 %

-221.1 %

107.0 %

-293.3 %

347.6 %

Capital expenditures

$58,088

$56,200

$36,250

$37,031

$46,239

% Change from previous Qtr.

26.0 %

-3.3 %

-35.5 %

2.2 %

24.9 %

Principal payments of capital (finance) lease obligations

$8,003

$8,520

$8,791

$8,528

$13,356

% Change from previous Qtr.

-71.4 %

6.5 %

3.2 %

-3.0 %

56.6 %

Dividends paid

$49,133

$49,560

$49,066

$2,304

$1,299

Gross Leverage Ratio (3)

6.69

8.65

8.24

8.04

8.02

Net Leverage Ratio (3)

6.08

7.52

7.44

7.34

7.41

Gross Leverage Ratio, adjusted for amounts Due from T-Mobile (3)(14)

5.81

7.74

7.45

7.35

7.40

Net Leverage Ratio, adjusted for amounts Due from T-Mobile (3)(14)

5.21

6.61

6.65

6.64

6.79

Gross Leverage Ratio under the Company's Indentures (3)

5.86

6.82

5.66

6.13

6.10

Secured Leverage Ratio under the Company's Indentures (3)

3.44

4.20

3.49

3.80

3.79

Interest Coverage Ratio under the Company's Indentures (3)

2.80

2.43

2.62

2.39

2.29

Customer Connections – end of period (13)

On-Net customer connections

86,781

87,407

87,767

87,944

87,899

% Change from previous Qtr.

-0.8 %

0.7 %

0.4 %

0.2 %

-0.1 %

Off-Net customer connections

27,508

26,239

25,518

24,656

24,014

% Change from previous Qtr.

-5.0 %

-4.6 %

-2.7 %

-3.4 %

-2.6 %

Wavelength customer connections (1)

1,322

1,469

1,750

2,064

2,263

% Change from previous Qtr.

18.2 %

11.1 %

19.1 %

17.9 %

9.6 %

Non-Core customer connections (2)

5,120

3,615

3,244

2,979

2,633

% Change from previous Qtr.

-11.8 %

-29.4 %

-10.3 %

-8.2 %

-11.6 %

Total customer connections (13)

120,731

118,730

118,279

117,643

116,809

% Change from previous Qtr.

-2.1 %

-1.7 %

-0.4 %

-0.5 %

-0.7 %

Corporate customer connections (5)

45,295

44,307

43,391

42,579

41,903

% Change from previous Qtr.

-2.3 %

-2.2 %

-2.1 %

-1.9 %

-1.6 %

Net-centric customer connections (5) (13)

61,795

62,659

63,875

64,551

65,098

% Change from previous Qtr.

-0.7 %

1.4 %

1.9 %

1.1 %

0.8 %

Enterprise customer connections (5)

13,641

11,764

11,013

10,513

9,808

% Change from previous Qtr.

-7.7 %

-13.8 %

-6.4 %

-4.5 %

-6.7 %

On-Net Buildings – end of period

Multi-Tenant office buildings

1,867

1,871

1,869

1,881

1,875

Carrier neutral data center buildings

1,453

1,471

1,482

1,511

1,545

Cogent data centers

101

100

Cogent edge data centers

Total on-net buildings

3,500

3,529

3,537

3,579

3,605

Total carrier neutral data center nodes

1,668

1,675

1,686

1,715

1,744

Wave enabled locations

883

938

996

1,068

1,107

Square feet – multi-tenant office buildings – on-net

1,015,459,520

1,017,918,826

1,017,433,216

1,025,139,485

1,024,433,714

Total Technical Buildings Owned (11)

482

Square feet – Technical Buildings Owned (11)

1,603,569

Network – end of period

Intercity route miles – Leased

79,867

73,075

72,955

73,218

73,769

Metro route miles – Leased

30,788

31,297

31,388

32,634

33,036

Metro fiber miles – Leased

90,696

92,631

93,338

96,663

97,916

Intercity route miles – Owned

21,883

Metro route miles – Owned

1,704

Connected networks – AS's

8,240

8,085

8,043

7,659

7,630

Headcount – end of period (12)

Sales force – quota bearing (12)

629

628

617

590

568

Sales force – total (12)

820

802

777

749

Total employees (12)

1,899

1,889

1,882

1,833

1,795

Sales rep productivity – units per full time equivalent sales rep("FTE") per month

3.8

4.8

4.6

4.1

FTE – sales reps

605

588

592

585

559

(1) In connection with the acquisition of the Wireline Business, Cogent began to provide optical wavelength services and optical transport services over its fiber network.

(2) Consists of legacy services of companies whose assets or businesses were acquired by Cogent.

(3) See Schedules of Non-GAAP measures below for definitions and reconciliations to GAAP measures.

(4) Network operations expense excludes equity-based compensation expense of $490, $506, $570, $319 and $319 in the three-month periods ended March 31, 2025 through March 31, 2026 respectively. Network operations expense includes excise taxes, including Universal Service Fund fees, of $20,200, $19,998, $19,188, $19,786 and $19,490 in the three-month periods ended March 31, 2025 through March 31, 2026, respectively.

(5) In connection with the acquisition of the Wireline Business, Cogent classified revenue and customer connections as follows:

(6) GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity-based compensation included in network operations expense. GAAP gross margin is defined as GAAP gross profit divided by total service revenue.

(7) Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as non-GAAP gross profit divided by total service revenue. Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant measures to provide investors. Management uses them to measure the margin available to the company after network service costs, in essence a measure of the efficiency of the Company's network.

(8) Excludes equity-based compensation expense of $7,523, $4,158, $8,362, $4,489 and $7,244 in the three-month periods ended March 31, 2025 through March 31, 2026, respectively.

(9) Through February 5, 2026, Cogent was party to an interest rate swap agreement (the "Swap Agreement") that has the economic effect of modifying the fixed interest rate obligation associated with its Senior Secured 2026 Notes to a variable interest rate obligation based on the Secured Overnight Financing Rate ("SOFR") so that the interest payable on Cogent's 2026 Notes effectively became variable based on overnight SOFR. Interest expense includes payments of $9,880 and $4,078 for the three-month periods ended December 31, 2025 and March 31, 2026, respectively, related to the Swap Agreement. Under GAAP, changes in the valuation of the Swap Agreement are classified with interest expense in the condensed consolidated statements of comprehensive (loss) income.

(10) Includes cash payments under the IP Transit Services Agreement, as discussed above, of

(11) In connection with the acquisition of the Wireline Business, Cogent acquired 482 technical buildings. Cogent converted 52 of those buildings to Cogent Data Centers and 87 into Cogent Edge Data Centers.

(12) In connection with the acquisition of the Wireline Business, Cogent hired 942 total employees, including 75 quota bearing sales employees and 114 sales employees.

(13) Net-centric revenue under the CSA (predominantly on-net revenue) was

Net-centric customer connections under the CSA were:

(14) Amounts Due from T-Mobile include 1) Due from T-Mobile, IP Transit Services Agreement, current portion, 1) Due from T-Mobile, IP Transit Services Agreement, long-term portion and 3) Due from T-Mobile, Purchase Agreement, all amounts net of their applicable discounts. These amounts totaled $265,090, $244,821, $224,167, $203,120 and $181,670 as of March 31, 2025 to March 31, 2026, respectively.

NM Not meaningful

Schedules of Non-GAAP Measures

EBITDA, EBITDA, as adjusted for cash payments made to the Company under the IP Transit Services Agreement, EBITDA margin and EBITDA, as adjusted for cash payments made to the Company under the IP Transit Services Agreement, marginEBITDA represents net cash flows provided by operating activities plus changes in operating assets and liabilities, cash interest expense and cash income tax expense. Management believes the most directly comparable measure to EBITDA calculated in accordance with generally accepted accounting principles in the United States, or GAAP, is net cash provided by operating activities. The Company also believes that EBITDA is a measure frequently used by securities analysts, investors, and other interested parties in their evaluation of issuers. EBITDA, as adjusted for cash payments under the IP Transit Services Agreement with T-Mobile, represents EBITDA and cash payments made to the Company under the IP Transit Agreement. EBITDA margin is defined as EBITDA divided by total service revenue. EBITDA, as adjusted for cash payments made to the Company under the IP Transit Agreement margin is defined as EBITDA, as adjusted for cash payments made to the Company under the IP Transit Agreement, divided by total service revenue.

The Company believes that EBITDA, EBITDA, as adjusted for cash payments made to the Company under the IP Transit Services Agreement, EBITDA margin and EBITDA as adjusted for cash payments made to the Company under the IP Transit Services Agreement margin are useful measures of its ability to service debt, fund capital expenditures, pay dividends and expand its business. The company believes its EBITDA, as adjusted for cash payments made to the Company under the IP Transit Services Agreement, is a useful measure because it includes recurring cash flows stemming from the IP Transit Services Agreement that are of the same type as contracted payments under commercial contracts. The measurements are an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. EBITDA, EBITDA, as adjusted for cash payments made to the Company under the IP Transit Agreement, EBITDA margin and EBITDA as adjusted for cash payments made to the Company under the IP Transit Agreement margin are not recognized terms under GAAP and accordingly, should not be viewed in isolation or as a substitute for the analysis of results as reported under GAAP, but rather as a supplemental measure to GAAP. For example, these measures are not intended to reflect the Company's free cash flow, as they do not consider certain current or future cash requirements, such as capital expenditures, contractual commitments, and changes in working capital needs, interest expenses and debt service requirements. The Company's calculations of these measures may also differ from the calculations performed by its competitors and other companies and as such, their utility as a comparative measure is limited.

EBITDA, and EBITDA, as adjusted cash payments made to the Company under the IP Transit Services Agreement, are reconciled to net cash provided by operating activities in the table below.

Q1 2025

Q22025

Q32025

Q42025

Q12026

($ in 000's) – unaudited

Net cash provided by (used in) operating activities

$36,351

$(44,039)

$3,100

$(5,992)

$14,834

Changes in operating assets and liabilities

$(26,614)

$42,244

$8,941

$7,795

$(13,375)

Cash interest expense and income tax expense

34,022

50,290

36,740

49,940

43,724

EBITDA

$43,759

$48,495

$48,781

$51,743

$45,183

PLUS: Cash payments made to the Company under IP Transit Services Agreement

25,000

EBITDA, as adjusted for cash payments made to the Company under IP Transit Services Agreement

$68,759

$73,495

$73,781

$76,743

$70,183

EBITDA margin

17.7 %

19.7 %

20.2 %

21.5 %

18.9 %

EBITDA, as adjusted for cash payments made to the Company under IP Transit Services Agreement, margin

27.8 %

29.8 %

30.5 %

31.9 %

29.3 %

Constant currency revenue is reconciled to service revenue as reported in the tables below.

Constant currency impact on revenue changes – sequential periods

($ in 000's) – unaudited

2025

2026

Service revenue, as reported – current period

$247,048

$246,247

$241,949

$240,518

$239,187

Impact of foreign currencies on service revenue

542

(2,419)

(938)

191

(253)

Service revenue - as adjusted for currency impact (1)

$247,590

$243,828

$241,011

$240,709

$238,934

Service revenue, as reported – prior sequential period

$252,291

$247,048

$246,247

$241,949

$240,518

Constant currency revenue increase (decrease)

$(4,701)

$(3,220)

$(5,236)

$(1,240)

$(1,584)

Constant currency revenue percent increase (decrease)

-1.9 %

-1.3 %

-2.1 %

-0.5 %

-0.7 %

(1)

Service revenue, as adjusted for currency impact, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior sequential period. The Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for currency impact, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.

Constant currency impact on revenue changes – prior year periods

($ in 000's) – unaudited

2025

2026

Service revenue, as reported – current period

$247,048

$246,247

$241,949

$240,518

$239,187

Impact of foreign currencies on service revenue

1,258

(1,507)

(1,806)

(2,659)

(3,420)

Service revenue - as adjusted for currency impact (2)

$248,306

$244,740

$240,143

$237,859

$235,767

Service revenue, as reported – prior year period

$266,168

$260,443

$257,202

$252,291

$247,048

Constant currency revenue increase

$(17,862)

$(15,703)

$(17,059)

$(14,432)

$(11,281)

Constant currency percent revenue increase

-6.7 %

-6.0 %

-6.6 %

-5.7 %

-4.6 %

(2)

Service revenue, as adjusted for currency impact, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the comparable prior year period. The Company believes that disclosing year over year revenue growth without the impact of foreign currencies on service revenue is a useful measure of revenue growth. Service revenue, as adjusted for currency impact, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.

Revenue on a constant currency basis and adjusted for the impact of excise taxes is reconciled to service revenue as reported in the tables below.

Constant currency and excise tax impact on revenue changes – sequential periods

($ in 000's) – unaudited

2025

2026

Service revenue, as reported – current period

$247,048

$246,247

$241,949

$240,518

$239,187

Impact of foreign currencies on service revenue

542

(2,419)

(938)

191

(253)

Impact of excise taxes on service revenue

760

202

832

(598)

296

Service revenue - as adjusted for currency and excise taxes impact (3)

$248,350

$244,030

$241,843

$240,111

$239,230

Service revenue, as reported – prior sequential period

$252,291

$247,048

$246,247

$241,949

$240,518

Constant currency and excise taxes revenue increase (decrease)

$(3,941)

$(3,018)

$(4,404)

$(1,838)

$(1,288)

Constant currency and excise tax revenue percent increase (decrease)

-1.6 %

-1.2 %

-1.8 %

-0.8 %

-0.5 %

(3)

Service revenue, as adjusted for currency impact and the impact of excise taxes, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior sequential period and adjusting for the changes in excise taxes recorded as revenue between the periods presented. The Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies and excise taxes on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for the impact of foreign currency and excise taxes, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.

Constant currency and excise tax impact on revenue changes – prior year periods

($ in 000's) – unaudited

2025

2026

Service revenue, as reported – current period

$247,048

$246,247

$241,949

$240,518

$239,187

Impact of foreign currencies on service revenue

1,258

(1,507)

(1,806)

(2,659)

(3,420)

Impact of excise taxes on service revenue

349

(816)

586

1,174

710

Service revenue - as adjusted for currency and excise taxes impact (4)

$248,655

$243,924

$240,729

$239,033

$236,477

Service revenue, as reported – prior year period

$266,168

$260,443

$257,202

$252,291

$247,048

Constant currency and excise taxes revenue increase

$(17,513)

$(16,519)

$(16,473)

$(13,258)

$(10,571)

Constant currency and excise tax percent revenue increase

-6.6 %

-6.3 %

-6.4 %

-5.3 %

-4.3 %

(4)

Service revenue, as adjusted for currency impact and the impact of excise taxes, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior year period and adjusting for the changes in excise taxes recorded as revenue between the periods presented. The Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies and excise taxes on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for the impact of foreign currency and excise taxes, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.

Non-GAAP gross profit and non-GAAP gross margin

Non-GAAP gross profit and non-GAAP gross margin are reconciled to GAAP gross profit and GAAP gross margin in the table below.

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

($ in 000's) – unaudited

Service revenue total

$247,048

$246,247

$241,949

$240,518

$239,187

Minus - Network operations expense including equity-based compensation and depreciation andamortization expense

213,477

212,782

192,106

186,776

183,284

GAAP Gross Profit (5)

$33,571

$33,465

$49,843

$53,742

$55,903

Plus - Equity-based compensation – networkoperations expense

490

506

570

319

Plus – Depreciation and amortization expense

$76,038

$75,290

$60,429

$58,422

$54,055

Non-GAAP Gross Profit (6)

$110,099

$109,261

$110,842

$112,483

$110,277

GAAP Gross Margin (5)

13.6 %

20.6 %

22.3 %

23.4 %

Non-GAAP Gross Margin (6)

44.6 %

44.4 %

45.8 %

46.8 %

46.1 %

(5)

(6)

Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as non-GAAP gross profit divided by total service revenue. Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant measures for investors, as they are metrics that management uses to measure the margin and amount available to the Company after network service costs, in essence, these are measures of the efficiency of the Company's network.

Gross and Net Leverage Ratios

Gross leverage ratio is defined as total debt divided by the trailing 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement. Net leverage ratio is defined as total net debt (total debt minus cash and cash equivalents) divided by the last 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement. Gross leverage, adjusted for amounts Due from T-Mobile, is defined as total debt minus amounts due from T-Mobile divided by the last 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement. Net leverage, adjusted for amounts Due from T-Mobile, is defined as total net debt (total debt minus cash and cash equivalents) minus amounts due from T-Mobile divided by the last 12 months EBITDA, as adjusted for cash payments under the IP Transit Services Agreement.

Cogent's gross leverage ratios and net leverage ratios are shown below.

($ in 000's) – unaudited

As of March 31,2025

As of June 30,2025

As of September 30,2025

As of December 31,2025

As of March 31,2026

Cash and cash equivalents & restricted cash

$183,970

$306,725

$226,294

$205,112

$179,265

Debt

Capital (finance) leases – current portion

24,685

26,523

24,990

26,112

23,967

Capital (finance) leases – long term

543,852

578,634

576,851

597,239

604,981

Senior Secured 2032 Notes

600,000

Senior Secured 2026 Notes

500,000

Secured IPv4 Notes

206,000

380,400

Senior Unsecured 2027 Notes

750,000

Total debt

2,024,537

2,335,557

2,332,241

2,353,751

2,359,348

Total net debt

1,840,567

2,028,832

2,105,947

2,148,639

2,180,083

Trailing 12 months EBITDA, as adjusted for cashpayments from the IP Transit Services Agreement

302,636

269,968

282,888

292,785

294,202

Gross leverage ratio

6.69

8.65

8.24

8.04

8.02

Net leverage ratio

6.08

7.52

7.44

7.34

7.41

Total amounts Due from T-Mobile

$265,090

$244,821

$224,167

$203,120

$181,670

Total debt, adjusted for amounts Due from T-Mobile

1,759,447

2,090,736

2,108,074

2,150,631

2,177,678

Total net debt, adjusted for amounts Due from T-Mobile

1,575,477

1,784,011

1,881,780

1,945,519

1,998,413

Gross leverage ratio, adjusted for amounts Due from T-Mobile

5.81

7.74

7.45

7.35

7.40

Net leverage ratio, adjusted for amounts Due from T-Mobile

5.21

6.61

6.65

6.64

6.79

Ratios under the Company's indentures

Consolidated Leverage Ratio is defined in the Company's Indentures as total debt divided by Consolidated Cash Flow (as defined in the Company's Indentures) for the most recently completed period of four consecutive fiscal quarters of the Company (the "Reference Period"), subject to certain adjustments provided for in the Company's Indentures. Secured Leverage Ratio is defined in the Company's Indentures as total secured debt divided by Consolidated Cash Flow for the Reference Period, subject to certain adjustments provided for in the Company's Indentures. Net leverage ratio is presented as total net debt (total debt minus cash and cash equivalents) divided by the last 12 months Consolidated Cash Flow. Net leverage ratio is not a defined term in the Company's Indentures. Fixed Charge Coverage Ratio is defined in the Company's Indentures as Consolidated Cash Flow for the Reference Period divided by Fixed Charges (as defined in the Company's Indentures) for the Reference Period, which largely consist of interest expense, subject to certain adjustments provided for in the Company's Indentures. Cogent's ratios are shown in the table below.

($ in 000's) – unaudited

As of March 31,2025

As of June 30, 2025(2)

As of September 30,2025 (2)

As of December 31,2025 (2)

As of March 31,2026 (2)

Cash and cash equivalents & restricted cash

$165,676

$195,165

$136,513

$135,410

$127,334

Debt

Capital (finance) leases – current portion

24,685

26,523

24,990

26,112

23,967

Capital (finance) leases – long term

543,852

578,634

576,851

597,239

604,981

Letters of credit

124

130

Senior Secured 2026 Notes

500,000

Senior Secured 2032 Notes

600,000

Senior Unsecured 2027 Notes

750,000

Total debt

1,818,661

1,955,287

1,951,971

1,973,481

1,979,078

Total net debt

1,652,985

1,760,122

1,815,458

1,838,071

1,851,744

Total secured debt

1,068,661

1,205,287

1,201,971

1,223,481

1,229,078

Consolidated Cash Flow (2)

310,345

286,881

344,739

322,154

324,405

Consolidated Leverage Ratio for the Reference Period

5.86

6.82

5.66

6.13

6.10

Net leverage ratio (1)

5.33

6.14

5.27

5.71

Secured Leverage Ratio for the Reference Period (2)

3.44

4.20

3.49

3.80

3.79

Fixed Charges for the Reference Period (2)

110,704

118,290

131,688

134,836

141,394

Fixed Charge Coverage Ratio for the Reference Period (2)

2.80

2.43

2.62

2.39

2.29

(1)

Net leverage ratio is not a defined term under the Company's Indentures.

(2)

Consolidated Cash Flow as defined in the Company's $600.0 million Secured 2032 Notes issued in June 2025, includes cash payments under the IP Transit Services Agreement with TMUSA. Cash payments under the IP Transit Services Agreement with TMUSA for the for the most recently completed period of four consecutive fiscal quarters of the Company were $100.0 million.

Ratios under the Company's $600 million 2032 Secured Notes

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Consolidated Cash Flow under the Indentures

286,881

344,739

322,154

324,405

PLUS: Cash Payments under IP Transit Services Agreement with TMUSA

100,000

Consolidated Cash Flow - $600.0 million Secured 2032 Notes

386,881

444,739

422,154

424,405

Consolidated Leverage Ratio for the Reference Period - $600.0 million Secured 2032 Notes

5.05

4.39

4.67

4.66

Net leverage ratio - $600.0 million Secured 2032 Notes (1)

4.55

4.08

4.35

4.36

Secured Leverage Ratio for the Reference Period - $600.0 million 2032 Notes

3.12

2.70

2.90

Fixed Charges for the Reference Period

118,290

131,688

134,836

141,394

Fixed Charge Coverage Ratio for the Reference Period - $600.0 million 2032 Notes

3.27

3.38

3.13

3.00

Cogent's SEC filings are available online via the Investor Relations section of www.cogentco.com or on the Securities and Exchange Commission's website at www.sec.gov.

COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2026 AND DECEMBER 31, 2025

(IN THOUSANDS, EXCEPT SHARE DATA)

March 31,

2026

December 31,

2025

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

140,265

148,515

Restricted cash

39,000

56,597

Accounts receivable, net of allowance for credit losses of $5,271 and $4,610, respectively

91,096

88,050

Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of $8,695 and $10,401, respectively

91,305

89,599

Prepaid expenses and other current assets

68,610

67,820

Total current assets

430,276

450,581

Property and equipment:

Property and equipment

3,696,974

3,642,906

Accumulated depreciation and amortization

(1,964,092)

(1,921,832)

Total property and equipment, net

1,732,882

1,721,074

Right-of-use leased assets

303,051

310,523

IPv4 intangible assets

458,000

Other intangible assets, net

10,813

11,251

Deposits and other assets

31,179

34,834

Due from T-Mobile, IP Transit Services Agreement, net of discount of $869 and $2,255, respectively

65,798

89,412

Due from T-Mobile, Purchase Agreement, net of discount of $3,548 and $4,006, respectively

24,567

24,109

Total assets

3,056,566

3,099,784

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

36,095

30,571

Accrued and other current liabilities

112,345

109,582

Current maturities, operating lease liabilities

53,665

54,576

Finance lease obligations, current maturities

23,967

26,112

Total current liabilities

226,072

220,841

Senior secured 2032 notes, net of unamortized debt costs of $1,957 and $2,020, respectively

598,043

597,980

Senior unsecured 2027 notes, net of unamortized debt costs of $1,034 and $1,236, respectively, and discounts of $3,633 and $4,344, respectively

745,333

744,420

Secured IPv4 notes, net of debt costs of $8,339 and $8,863, respectively

372,061

371,537

Operating lease liabilities, net of current maturities

263,698

269,753

Finance lease obligations, net of current maturities

604,981

597,239

Deferred income tax liabilities

321,724

333,294

Other long-term liabilities

28,816

28,568

Total liabilities

3,160,728

3,163,632

Commitments and contingencies:

Stockholders' deficit:

Common stock, $0.001 par value; 75,000,000 shares authorized; 50,077,663 and 50,062,158 shares issued and outstanding, respectively

Additional paid-in capital

651,538

643,256

Accumulated other comprehensive (loss) income

(6,327)

1,428

Accumulated deficit

(749,423)

(708,582)

Total stockholders' deficit

(104,162)

(63,848)

Total liabilities and stockholders' deficit

3,056,566

3,099,784

COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Three Months Ended

March 31, 2026

Three Months Ended

March 31, 2025

(Unaudited)

Service revenue

239,187

247,048

Operating expenses:

Network operations (including $319 and $490 of equity-based compensation expense, respectively, exclusive of depreciation and amortization shown separately below)

129,229

137,439

Selling, general, and administrative (including $7,244 and $7,523 of equity-based compensation expense, respectively)

72,338

73,863

Depreciation and amortization

54,055

76,038

Total operating expenses

255,622

287,340

Gains on lease terminations and other

2,928

—

Operating loss

(13,507)

(40,292)

Interest expense, including change in valuation interest rate swap agreement

(43,875)

(34,216)

Interest income – IP Transit Services Agreement

3,093

4,686

Interest income (loss) – Purchase Agreement

458

425

Interest income (loss) and other, net

2,852

(865)

Loss before income taxes

(50,979)

(70,262)

Income tax benefit

11,437

18,220

Net loss

(39,542)

(52,042)

Comprehensive loss:

Net loss

(39,542)

(52,042)

Foreign currency translation adjustment

(7,755)

11,752

Comprehensive loss

(47,297)

(40,290)

Net loss per common share:

Basic net loss per common share

(0.83)

(1.09)

Diluted net loss per common share

(0.83)

(1.09)

Dividends declared per common share

0.02

1.005

Weighted-average common shares - basic

47,774,617

47,676,735

Weighted-average common shares - diluted

47,774,617

47,676,735

COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025

(IN THOUSANDS)

Three Months Ended

March 31, 2026

Three Months Ended

March 31, 2025

(Unaudited)

Cash flows from operating activities:

Net loss

(39,542)

(52,042)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

54,055

76,038

Amortization of debt costs and discounts

1,501

1,192

Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements

(3,551)

(5,111)

Equity-based compensation expense (net of amounts capitalized)

7,563

8,013

Gains on lease terminations and other

(2,928)

—

Deferred income taxes

(11,570)

(18,554)

Changes in operating assets and liabilities:

Accounts receivable

(3,046)

8,979

Prepaid expenses and other current assets

(790)

2,261

Accounts payable, accrued liabilities and other long-term liabilities

9,501

17,903

Deposits and other assets

3,641

(2,328)

Net cash provided by operating activities

14,834

36,351

Cash flows from investing activities:

Cash receipts - IP Transit Services Agreement – T-Mobile

25,000

Purchases of property and equipment

(46,239)

(58,088)

Net cash used in investing activities

(21,239)

(33,088)

Cash flows from financing activities:

Dividends paid

(1,299)

(49,133)

Proceeds from exercises of stock options

—

121

Principal payments of finance lease obligations

(13,356)

(8,003)

Net cash used in financing activities

(14,655)

(57,015)

Effect of exchange rates changes on cash

(4,787)

9,806

Net decrease in cash, cash equivalents and restricted cash

(25,847)

(43,946)

Cash, cash equivalents and restricted cash, beginning of period

205,112

227,916

Cash, cash equivalents and restricted cash, end of period

179,265

183,970

Except for historical information and discussion contained herein, statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions. The statements in this release are based upon the current beliefs and expectations of Cogent's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Numerous factors could cause or contribute to such differences, including the impact of our acquisition of the Wireline Business, including our difficulties integrating our business with the acquired Wireline Business, which may result in the combined company not operating as effectively or efficiently as expected; transition services required to support the acquired Wireline Business and the related costs continuing for a longer period than expected; transition related costs associated with the acquisition; the COVID-19 pandemic and the related government policies; delays in the delivery of network equipment or optical fiber; loss of key right-of-way agreements; future economic instability in the global economy, including the risk of economic recession, recent bank failures and liquidity concerns at certain other banks or a contraction of the capital markets, which could affect spending on Internet services and our ability to engage in financing activities; the impact of changing foreign exchange rates (in particular the Euro to USD and Canadian dollar to USD exchange rates) on the translation of our non-USD denominated revenues, expenses, assets and liabilities; legal and operational difficulties in new markets; the imposition of a requirement that we contribute to the US Universal Service Fund on the basis of our Internet revenue; changes in government policy and/or regulation, including net neutrality rules by the United States Federal Communications Commission and in the area of data protection; cyber-attacks or security breaches of our network; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering arrangements and right-of-way agreements on favorable terms; our reliance on a few equipment vendors, and the potential for hardware or software problems associated with such equipment; the dependence of our network on the quality and dependability of third-party fiber and right-of-way providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; our ability to make payments on our indebtedness as they become due and outcomes in litigation and outcomes in litigation as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year December 31, 2025 and our Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, September 30, 2025 and March 31, 2026. Cogent undertakes no duty to update any forward-looking statement or any information contained in this press release or in other public disclosures at any time.

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SOURCE Cogent Communications Holdings, Inc.