Cogent Communications Reports Q3 Results and Dividend Increase

Cogent Communications ( (CCOI) ) has released its Q3 earnings. Here is a breakdown of the information Cogent Communications presented to its investors.

Cogent Communications is a multinational, Tier 1 facilities-based internet service provider (ISP) specializing in high-speed Internet access, Ethernet transport, and colocation services, known for its all-optical IP network backbone serving 260 markets globally.

In the latest earnings report for the third quarter of 2024, Cogent Communications reported a service revenue of $257.2 million, representing a slight decrease from the previous quarter and the same quarter last year. Despite a challenging revenue environment, Cogent increased its quarterly dividend, marking its forty-ninth consecutive increase, a testament to its commitment to returning value to shareholders.

The company’s financial performance showed a notable increase in EBITDA by 32.2% to $35.9 million, with an improved EBITDA margin of 13.9%. Wavelength revenue saw a significant rise by 45.8%, reaching $5.3 million. However, there were declines in both on-net and off-net revenues, and the net cash used in operating activities decreased slightly to $20.2 million from the previous quarter.

Cogent’s strategic move to terminate an uneconomic resale agreement, along with its ongoing focus on high-capacity internet connections, reflects its adaptation to changing market conditions. The impact of foreign exchange rates was modest, contributing to a slight positive shift in service revenue.

Looking forward, Cogent’s management remains cautiously optimistic about future growth, citing opportunities for increased sales if office occupancy rates improve. The company continues to adapt to the evolving work-from-home dynamics, which may serve as a potential catalyst for demand in higher capacity internet services.