Cogent Incurs Narrower-Than-Expected Q4 Loss Despite Lower Revenues

Cogent Communications Holdings, Inc. CCOI reported mixed fourth-quarter 2025 results, with the bottom line beating the Zacks Consensus Estimate while the top line missing the same. 

This Washington, DC-based Internet service provider recorded lower revenues year over year, mainly due to the continued weakness in legacy Sprint and off-net revenues offsetting gains in on-net and wavelength services.

Net Income

During the quarter, the company reported a net loss of $30.8 million or a loss of 64 cents per share compared with a net loss of $43.3 million or a loss of 91 cents per share in the year-ago quarter. Lower operating costs improved the bottom line and beat the Zacks Consensus Estimate by 45 cents.

For 2025, Cogent reported a net loss of $182.2 million or a loss of $3.80 per share compared with a net loss of $204.1 million or a loss of $4.28 per share in 2024.

Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise

Cogent Communications Holdings, Inc. price-consensus-eps-surprise-chart | Cogent Communications Holdings, Inc. Quote

Revenues

Service revenues decreased to $240.5 million from $252.3 million in the year-earlier quarter, owing to a decline in Off-Net revenues. The top line fell short of the Zacks consensus estimate of $243.01 million. For 2025, revenues decreased to $975.8 million from $1.04 billion in 2024.

On-Net revenues in the quarter were $134.3 million, up from $128.8 million in the year-ago quarter. Revenues beat our estimate of $130.9 million. Customer connections of On-Net rose to 87,944 from 87,500.

Off-Net revenues were $92.9 million compared with $113.2 million in the year-earlier quarter. The segment's customer connections decreased to 24,656 from 28,963 in the year-ago quarter. Net sales miss our revenue estimate of $99 million.

Wavelength revenues were $12.1 million in the quarter, up from $7 million in the year-ago quarter. The segment's customer connections were 2,064, up from 1,118 in the prior-year quarter. Revenues beat our estimate of $11.8 million.

Non-core revenues were $1.2 million, down from $3.4 million in the year-ago quarter. The segment's customer connections were 2,979, down from 5,802 in the prior-year quarter. The company’s net-centric customer connections increased to 64,551 from 62,236 a year ago. Enterprise customer connections decreased to 10,513 from 14,776 a year ago.

Other Details

GAAP gross profit was $53.7 million, up from $29.8 million a year ago, with respective margins of 22.3% and 11.8%. Non-GAAP gross profit aggregated $112.5 million compared with $97.6 million in the year-ago quarter, with respective margins of 46.8% and 38.7%. Operating loss was $11.3 million compared with a loss of $32.8 million a year ago.

During the quarter, EBITDA was $51.7 million compared with $41.9 million a year ago, with respective margins of 21.5% and 16.6%. Adjusted EBITDA increased to $76.7 million from $66.9 million in the year-ago quarter, with respective margins of 31.9% and 26.5%.

Cash Flow & Liquidity

In the fourth quarter of 2025, Cogent utilized $6 million in cash for operations against a cash generation of $14.5 million in the year-ago quarter. For 2025, the company utilized $10.6 million of cash for operating activities compared with $8.6 million cash utilization in 2024.

As of Dec. 31, 2025, the company had $205.1 million in cash and cash equivalents & restricted cash with $597.2 million of finance lease obligations (net of current maturities) compared with respective tallies of $227.9 million and $517.2 million a year ago.

CCOI’s Zacks Rank

Cogent currently carries a Zacks Rank #3 (Hold). 

Stocks to Consider

Celestica Inc. CLS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 8.62%. With rising demand for AI and cloud infrastructure, Celestica is well-positioned to benefit. Its focus on higher-margin markets, diversified portfolio, and strong engineering capabilities support scalable production of complex electronic and data-center solutions. Its strong research and development capabilities enable it to produce high-volume electronics manufacturing across multiple industries.

Ericsson ERIC carries a Zacks Rank #2 (Buy) at present. It delivered an earnings surprise of 17.39% in the last reported quarter.

Ericsson is likely to gain from steady global 5G investments. Its competitive 5G portfolio and disciplined cost focus support network leadership, while expanding enterprise and private-network offerings create new growth opportunities. The company continues to execute its plan to become a leading mobile infrastructure provider. Ongoing innovation and partnerships should further strengthen its position in the wireless infrastructure market.

Ubiquiti Inc. UI currently holds a Zacks Rank #2. It delivered an earnings surprise of 38.08% in the last reported quarter.

It offers a broad portfolio of networking solutions for enterprises and service providers. Its efficient and flexible business model supports healthy margins and scalable expansion. The company continues to invest in research and development to launch innovative networking products and advanced technologies. Strong channel management and a wide global distributor network improve demand visibility and inventory control.

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