Cogent Communications Holdings Inc

Cogent Communications delivered a mixed fourth quarter for fiscal 2025, narrowing its loss more than Wall Street expected while falling short on revenue. The company posted an EPS loss of $0.64, well ahead of the $1.00 consensus estimate by 36.00%, but revenue of $240.52 million missed expectations of $262.96 million by 8.53% and slipped 4.7% year-over-year. The primary driver behind the bottom-line outperformance was a significant reduction in network operations expenses, alongside lower depreciation following Cogent's July 2024 decision to extend the estimated useful life of its owned fiber from 14 to 40 years, which meaningfully reduced per-period charges. Adjusted EBITDA rose 14.8% year-over-year to $76.74 million, with margin expanding to 31.9% from 26.5% a year ago, even as legacy off-net revenue continued to erode. Wavelength services offered a rare growth story, surging 73.7% year-over-year to $12.10 million. Still, the stock has faced considerable pressure, with UBS trimming its price target to $21 following the results, reflecting concern over the pace of the company's newer revenue ramp.