Cogent Communications Holdings Inc

Cogent Communications delivered a mixed first quarter for 2025, narrowly beating on the bottom line while falling short on revenue, as the ongoing wind-down of Sprint-related contracts continued to weigh on its top line. The company posted a loss of $1.09 per share, edging past the consensus estimate of $1.10 by 1.36%, but service revenue of $247.05 million missed expectations of $251.48 million by 1.76% and fell 7.2% year-over-year, pressured by the steep decline in T-Mobile IP Transit Agreement payments, which dropped to $25.00 million from $87.50 million in Q1 2024 as the payment schedule stepped down. The headline revenue weakness masked meaningful underlying progress; EBITDA surged 137.2% year-over-year to $43.80 million, with margins expanding to 17.7% from 6.9%, driven by an 18.7% reduction in network operations costs as Cogent continues optimizing its acquired Sprint wireline infrastructure. Faster-growing segments offered additional encouragement, with IPv4 leasing revenue climbing 42.0% to $14.40 million and wavelength services revenue nearly doubling, up 114.0% to $7.10 million. Leverage, however, remains a concern, with gross debt rising to $2.02 billion and leverage reaching 6.69x trailing EBITDA.