Cogent Communications (CCOI) investor relations material

Executive summary

• Q3 service revenue was $231.2M, down 1.8% QoQ and 4.4% YoY; adjusted EBITDA rose 3.9% QoQ to $73.9M, with a 32.0% margin.

• On-net and wavelength growth was offset by declining off-net revenue and acquired customer cancellations; total customer connections fell 3.0% YoY to 114,678.

• The dividend was suspended, and substantial doubt about the ability to continue as a going concern over the next 12 months remains amid June 2027 maturities and financing uncertainty.

Financial highlights

• Q3 net loss narrowed to $29.8M from $41.5M; operating loss narrowed to $6.9M from $18.1M.

• Non-GAAP gross margin was 47.6%, up 60 bps QoQ and 180 bps YoY; network services costs fell 3.1% QoQ and 7.7% YoY.

• Adjusted EBITDA was $73.9M versus $71.1M QoQ and $73.8M YoY; adjusted margin expanded to 32.0% from 30.2% QoQ.

• Nine-month revenue declined 4.0% YoY to $705.9M; net loss narrowed to $2.7M from $151.4M, including $134.9M of asset-sale and lease-termination gains and $12.9M of debt-extinguishment gains.

• SG&A excluding equity compensation fell 5.1% QoQ; headcount ended Q3 at 1,603, down 79 sequentially and 279 YoY.

Outlook and guidance

• Long-term targets remain 6%–8% revenue growth and ~200 bps annual EBITDA margin expansion; management described these as multi-year targets, not quarterly or annual guidance.

• Growth is expected from organic on-net services, NetCentric, wavelengths, IPv4 leasing and IP transit as acquired Sprint revenue declines moderate.

• Wavelength demand and backlog remain strong, but data-center readiness, power and equipment availability delay activations; management expects growth to accelerate as constraints ease.

• Financing sources are being evaluated for $435.0M of 2027 Notes and $265.0M of 2027 Mirror Notes due June 2027; additional debt is expected, but financing is not assured.