Cogent’s first quarter results were met with a significant negative market reaction, as the company’s revenue fell short of Wall Street expectations and declined year over year. Management attributed the underperformance primarily to ongoing declines in the acquired Sprint wireline customer base, particularly among corporate and enterprise segments. CEO Dave Schaeffer acknowledged these pressures, noting that “the decline in revenues from acquired Sprint customers is moderating,” while the core Cogent on-net business showed resilience. The quarter also saw higher seasonal expenses and persistent supply chain cost pressures.
Is now the time to buy CCOI? Find out in our full research report (it’s free for active Edge members).
Cogent (CCOI) Q1 CY2026 Highlights:
- Revenue: $239.2 million vs analyst estimates of $241.3 million (3.2% year-on-year decline, 0.9% miss)
- Adjusted EPS: -$0.47 vs analyst estimates of -$0.98 (52.1% beat)
- Adjusted EBITDA: $45.18 million vs analyst estimates of $73.35 million (18.9% margin, 38.4% miss)
- Operating Margin: -5.6%, up from -16.3% in the same quarter last year
- Total Connections: 116.8 million, down 3.92 million year on year
- Market Capitalization: $795.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cogent’s Q1 Earnings Call
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Gregory Williams (TD Cowen) asked about the seasonality of EBITDA and the timeline for data center divestitures. CEO Dave Schaeffer clarified that most of the recent SG&A increase was seasonal and expects margin expansion to resume, while the data center sale is on track for early summer.
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Sebastiano Petti (JPMorgan) questioned whether the inflection point for organic growth had been reached. Schaeffer noted growth in the core on-net business, but acknowledged that larger enterprise customer churn and customer-side constraints delayed top-line improvement.
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Christopher Schoell (UBS) inquired about capital expenditure trends and declining sales headcount. Schaeffer attributed higher CapEx to vendor price hikes and preordering due to longer lead times, and said sales rep consolidation should drive higher productivity without limiting growth.
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Ana Goshko (Bank of America) pressed on the specifics and timing of data center transactions and their impact on debt reduction. Schaeffer confirmed most proceeds will go toward deleveraging and expects to disclose final terms in an upcoming 8-K filing once the agreement is binding.
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Frank Louthan (Raymond James) asked about the mix shift in wavelength services and IPv4 leasing trends. Schaeffer explained that sales are moving toward larger, higher-capacity wavelengths, with 100 gig waves comprising about 75% of new sales and a growing share of 400 gig waves.
Catalysts in Upcoming Quarters
In the coming quarters, our team will watch (1) progress on closing and monetizing additional Sprint-acquired data centers, (2) evidence of sustained on-net and wavelength revenue growth despite ongoing Sprint customer attrition, and (3) normalization of equipment costs and supply chain pressures that have affected capital spending. The pace of deleveraging and refinancing will also serve as important markers of execution.
Cogent currently trades at $16.70, down from $23.16 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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