WASHINGTON – November 05, 2026 -- Cogent Communications Holdings (NASDAQ: CCOI) reported third-quarter 2026 service revenue of $231.2 million, down 1.8% from Q2 and 4.4% from Q3 2025, while cost cuts lifted its adjusted EBITDA margin to 32.0% from 30.2% in the prior quarter.
Adjusted EBITDA rises 3.9% to $73.9 million on lower operating costs
EBITDA, as adjusted for cash payments under the T-Mobile IP transit agreement, reached $73.9 million, up from $71.1 million in Q2 and $73.8 million a year earlier. Network operations expenses, excluding equity-based compensation, fell 3.1% sequentially to $121.0 million. Selling, general and administrative expenses, on the same basis, declined 5.1% to $61.3 million. Capital expenditures fell 5.8% to $36.3 million.
Unadjusted EBITDA was $48.9 million, a 21.1% margin, compared with $46.1 million and 19.6% in Q2. Non-GAAP gross margin rose to 47.6% from 47.0% in Q2 and 45.8% in Q3 2025. Net cash from operating activities was $3.8 million.
Wavelength revenue climbs 57.0% year on year to $16.0 million
On-net revenue, including wavelengths, rose 2.4% sequentially to $153.9 million and 5.8% year on year. Wavelength revenue grew 7.8% from Q2. Wavelength connections increased 55.5% year on year to 2,722. Cogent added 38 on-net buildings in the quarter, bringing the total to 3,665.
Off-net revenue fell 9.3% sequentially to $76.6 million and 19.5% year on year. Off-net connections dropped 12.0% year on year to 22,453. Total connections declined 3.0% year on year to 114,678. IP network traffic grew 4% sequentially and 14% year on year.
Foreign exchange reduced year-on-year service revenue growth by $0.5 million. On a constant-currency basis, revenue fell 4.2% year on year.
Cogent retires $168.4 million of notes at a discount and plans a $100 million data center sale
In Q3, Cogent bought back $118.4 million par value of its 2032 secured notes for $106.7 million, booking an $11.3 million gain. Year-to-date repurchases of the 2032 notes total $138.8 million par for $125.4 million, a $12.9 million gain. The company also bought $50.0 million par value of its 2027 unsecured notes for $49.6 million, a $0.1 million gain. Cash, including restricted cash, stood at $181.3 million at quarter-end.
Cogent has signed two non-binding letters of intent with two counterparties to sell four data centers for roughly $100.0 million in cash. The company acquired and repurposed the facilities in connection with its Sprint acquisition.
Net loss of $0.62 per share contrasts with Q2 profit lifted by a $130.7 million sale gain
Basic and diluted net loss per share was $0.62, versus earnings of $1.39 basic and $1.38 diluted in Q2. Q2 results included a $130.7 million gain on the sale of ten owned data centers. The Q3 2025 loss was $0.87 per share.
T-Mobile payments under the $700.0 million IP transit agreement, signed at the May 1, 2023 Sprint closing, totaled $16.7 million in Q3, against $33.3 million in Q2. The $8.3 million July 2026 installment, paid on June 30, was counted in the Q3 adjusted figures.