Cogent Off-Net Revenue Falls Sharply as Dividend Suspended

The Tip Desk · November 11, 2026 · 4 min read

Service revenue was $231.2 million in the third quarter, down 1.8% from $235.6 million in the second quarter, as off-net sales fell 9.3% and the board suspended the dividend.

Cogent Communications Holdings (CCOI), a Tier 1 facilities-based internet service provider, reported service revenue of $231.2 million for the three months ended September 30, 2026, down 1.8% from $235.6 million in the prior quarter and 4.4% from a year earlier. Constant-currency sequential revenue fell 1.7%.

The sequential decline was steeper than the 1.5% drop recorded in the second quarter. Off-net revenue, which covers customers reached through other carriers’ last-mile facilities, fell 9.3% sequentially to $76.6 million and 19.5% from a year earlier. That sequential drop was sharper than the 5.1% decline in the second quarter. Off-net customer connections ended the period at 22,453, down 2.5% from June and 12.0% from a year earlier.

On-net revenue, including wavelengths, rose 2.4% sequentially to $153.9 million and 5.8% from the year-ago quarter, after a 0.7% sequential increase in the second quarter. On-net revenue excluding wavelengths was $137.9 million, up 1.9% sequentially and 1.9% year over year. On-net customer connections were 87,326, down 0.8% from June. Total customer connections were 114,678, down 1.0% sequentially and 3.0% from a year earlier.

Wavelength revenue increased 7.8% sequentially to $16.0 million and 57.0% from a year earlier, after a 9.2% sequential rise in the second quarter. Wavelength customer connections rose 11.3% sequentially to 2,722 and 55.5% from a year earlier. The company said it was offering optical wavelength services in 1,151 locations in the United States, Mexico and Canada as of September 30, 2026. Non-core revenue was $0.7 million.

Enterprise revenue fell 8.7% sequentially to $26.9 million, and enterprise customer connections fell 8.5% to 8,197. Net-centric revenue declined 0.3% sequentially to $107.2 million, with net-centric customer connections up 0.1% to 65,649. Corporate revenue decreased 1.6% sequentially to $97.1 million. IPv4 revenue, included in on-net, rose 1.8% sequentially to $18.4 million. IP network traffic increased 4% sequentially and 14% from a year earlier.

GAAP gross profit decreased 1.6% sequentially to $56.7 million; GAAP gross margin held at 24.5%. Non-GAAP gross profit decreased 0.4% sequentially to $110.2 million, and non-GAAP gross margin expanded to 47.6% from 47.0%. Network operations expenses excluding equity-based compensation were $121.0 million, down 3.1% sequentially. Selling, general and administrative expenses excluding equity-based compensation were $61.3 million, down 5.1%. Capital expenditures were $36.3 million, down 5.8%.

Reported EBITDA was $48.9 million, with a 21.1% margin, versus $46.1 million and 19.6% in the second quarter. EBITDA, as adjusted for cash payments under the T-Mobile IP Transit Services Agreement, was $73.9 million, up 3.9% sequentially from $71.1 million; the adjusted margin was 32.0% versus 30.2%. Cash payments under that agreement were $16.7 million in the third quarter versus $33.3 million in the second quarter, after an $8.3 million July payment was received on June 30, 2026.

Basic and diluted net loss was $0.62 a share. The second quarter had shown $1.39 and $1.38 a share, including a $130.7 million gain on the sale of ten owned data centers. Net cash provided by operating activities was $3.8 million. Total cash, including restricted cash, was $181.3 million at period end.

Cogent purchased $118.4 million par value of its 2032 secured notes for $106.7 million, a gain of $11.3 million, and $50.0 million par value of 2027 unsecured notes for $49.6 million, a gain of $0.1 million. Gross leverage declined to 7.41 from 8.02; net leverage was 6.79. Gross leverage adjusted for amounts due from T-Mobile was 6.94 versus 7.50.

The company said it had entered two non-binding letters of intent to sell four data centers acquired with Sprint for about $100.0 million in cash. On November 4, 2026, the board voted to suspend the quarterly dividend program.