Cogent Communications (CCOI) Q2 2026 earnings summary

Executive summary

• Monetized ten former Sprint data centers for $224.2M–$225M, generating a $130.7M GAAP gain and reducing net leverage to 6.23x EBITDA from 6.79x last quarter.

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

• Service 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.

• 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 and wavelength services, with On-Net now 57.4%–64% of total revenues and wavelength revenue up 63.8% year-over-year.

Financial highlights

• Q2 2026 total revenue: $235.6M, down 1.5% sequentially and 4.3% year-over-year.

• Gross margin increased to 47.0% (non-GAAP), up 2.6% year-over-year; GAAP gross margin improved to 24.5% from 13.6% a year ago.

• Adjusted EBITDA was $71.1M, up 1.3% sequentially, with margin at 30.2%.

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

• CapEx declined 16.7% sequentially and 31.4% year-over-year to $38.5M.

Outlook and guidance

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

• Management expects to refinance 2027 Notes and 2027 Mirror Notes in Q3 2026, subject to market conditions.

• Dividend payments reduced to $0.02 per share per quarter, with future dividends subject to board discretion and financial performance.

• CapEx expected to continue declining both sequentially and year-over-year.

• Continued focus on deleveraging through asset sales, EBITDA growth, and cost reductions.