Cogent Communications (CCOI) investor relations material

Executive summary

• Monetized 10 former Sprint data centers for $225M, generating a $130.7M GAAP gain and reducing net leverage to 6.23x EBITDA from 6.79x last quarter and 6.61x a year ago.

• Net income for Q2 2026 was $66.6 million, a significant turnaround from a net loss of $57.8 million in Q2 2025, driven by the data center sale gain.

• Continued progress on selling the remaining 14 data centers, with multiple parties interested and ongoing negotiations.

• Significant cost reductions achieved, including a 6% workforce reduction and completion of major integration projects.

• Focused on shifting revenue mix to more profitable on-net services, now representing nearly 64% of total revenues.

Financial highlights

• Total revenue for Q2 2026 was $235.6M, down 1.5% sequentially and 4.3% year-over-year, mainly due to declines in off-net and non-core revenues.

• Gross margin increased by 260 bps year-over-year and 90 bps sequentially to 47%; GAAP gross margin improved to 24.5% from 13.6% a year ago.

• Adjusted EBITDA rose sequentially by $0.9M to $71.1M, with adjusted EBITDA margin up 90 bps to 30.2%.

• Wavelength revenue reached $14.8M, up 63.8% year-over-year and 9.2% sequentially.

• On-net revenue (including WAVE) was $150.2M, up 6.2% year-over-year and 0.7% sequentially; off-net revenue was $84.5M, down 17.3% year-over-year and 5.1% sequentially.

Outlook and guidance

• Multi-year revenue growth expected at 6–8% annually, with EBITDA margins projected to expand by ~200 bps per year.

• Integration costs from the Sprint acquisition are expected to be fully eliminated by year-end 2026, likely ahead of schedule.

• CapEx is expected to decline further both sequentially and year-over-year in Q3, with moderation in equipment price increases.

• Board notes future dividends and capital returns will depend on financial position, cash flow, and other factors.

• Anticipates continued margin expansion as integration costs wind down and on-net sales increase.