Cogent Communications Holdings Inc

Latest Results (26.11.2025):

Cogent Communications Holdings, Inc. — Third Quarter 2025: Revenue of $241.9 million and adjusted EBITDA of $73.8 million (30.5% adjusted margin). Management cut the quarterly dividend to $0.02 and paused buybacks to accelerate deleveraging, while highlighting strong wavelength and IPv4 leasing growth and a $144 million LOI to sell two repurposed data centers as part of a broader monetization plan.

Quarterly financials

Revenue: $241.9 million (Q3 2025). EBITDA as reported: $48.8 million (20.2% margin). EBITDA as adjusted: $73.8 million (30.5% adjusted margin).

Capital allocation & leverage

Dividend reduced to $0.02 per share per quarter and stock buybacks temporarily suspended until leverage improves; target net leverage = 4.0x LTM EBITDA. Management says gross-debt-adjusted LTM EBITDA ratio improved to 7.45 (from 7.74 prior quarter); net leverage was ~6.65 this quarter.

Debt covenant metrics

Reported total gross debt at par (incl. $601.8M finance leases): ~$2.3 billion. Under the $750M 2027 notes definition: leverage 5.66x, secured leverage 3.49x, fixed coverage 2.62. Under the $600M 2032 notes definition (includes T‑Mobile cash flows): leverage 4.39x, secured leverage 2.70x, fixed coverage 3.38.

T‑Mobile payments and adjustments

T‑Mobile IP Transit-related cash: $25 million per quarter through Q4 2027 (received $25M in this quarter). Company includes these amounts in adjusted EBITDA and in some leverage calculations; additional related lease‑obligation cash payments total at least $28M, payable in four equal payments Dec 2027–Mar 2028.

Wavelengths — growth & pipeline

Wavelength revenue: $10.2 million in Q3 2025 (≈+93% YoY, +12% sequential). Capable of provisioning 10G/100G/400G in 996 carrier-neutral data centers with a 30‑day window. Sold/provisioned waves in 454 locations (vs. 418 at Q2 end) and a funnel/backlog of 5,221 opportunities; management reiterated a multi‑year goal to capture ~25% of the North American long‑haul wavelength market.

IPv4 leasing

IPv4 leasing revenue: $17.5 million in Q3 2025 (+14.1% sequential, +55.5% YoY). Leased addresses: 14.6 million (sequential +10.7%); inventory ~38 million addresses. Average revenue per leased address: $0.31 in the quarter; management is pursuing more flexible wholesale leasing agreements.

Data center monetization

Entered a non‑binding LOI (early October) to sell 2 repurposed data centers for $144 million in cash; company intends to monetize all 24 repurposed facilities via sales or wholesale leases and is negotiating additional LOIs.

Revenue mix and trends

On‑net revenue: $135.3 million (serving 3,537 on‑net buildings), sequential +$2.9M. Off‑net (lower‑margin) revenue: $95.1 million, down 14.5% YoY and 6.9% sequentially as company grooms low‑margin Sprint‑acquired contracts. Total revenue declined $4.3M (‑1.7%) sequentially.

Pricing, ARPUs and churn

Average price per megabit (installed base): $0.16 (‑10% seq, ‑31% YoY). New‑contract price/megabit: $0.07. ARPUs — on‑net $515, off‑net $1,225, wavelength $2,108; IPv4 $0.31 per address. Unit churn improved: on‑net 1.3% (from 1.4%), off‑net 2.1% (from 2.3%).

CapEx, cash flow & other ops

CapEx: $36.3 million in Q3 2025 (‑35.5% sequential), reflecting Sprint integration completion and repurposing of facilities. Network traffic: +5% sequential, +9% YoY. DSO 30 days (improved); bad debt ~0.5% of revenues this quarter.

Guidance and strategic outlook

Management expects long‑term annual revenue growth of 6–8% and adjusted EBITDA margin expansion of ~200 bps per year (multiyear goals). Company emphasizes deleveraging, monetization of noncore data centers, wavelength scale‑up, and continued emphasis on higher‑margin products.