Cogent Communications reported lower total service revenue for the third quarter of 2026, but growth in on-net and wavelength services helped support higher adjusted EBITDA and a wider margin than in the prior quarter. The company also repurchased portions of its debt at a discount and said it has non-binding agreements to sell four data centers for about $100 million in cash.
Key details
- Service revenue was $231.2 million, down 1.8% from the second quarter and 4.4% from a year earlier. Currency movements reduced the reported comparisons slightly: in constant-currency terms, revenue fell 1.7% sequentially and 4.2% year over year.
- On-net revenue, including wavelengths, was $153.9 million, up 2.4% from the second quarter and 5.8% from a year earlier.
- Wavelength revenue was $16.0 million, rising 7.8% sequentially and 57.0% year over year.
- Adjusted EBITDA was $73.9 million, up 3.9% from the second quarter. Adjusted EBITDA margin increased to 32.0% from 30.2%.
- Operating costs declined sequentially. Network operations expenses, excluding equity-based compensation, were $121.0 million, down 3.1%. Selling, general and administrative expenses, on the same basis, were $61.3 million, down 5.1%.
- Capital expenditures were $36.3 million, down 5.8% from the second quarter. IP network traffic increased 4% sequentially and 14% year over year.
- Cash, including restricted cash, totaled $181.3 million at quarter-end.
- Cogent repurchased $118.4 million in face value of its 2032 secured notes for $106.7 million during the quarter, recording a reported gain of $11.3 million. For 2026 to date, it had bought back $138.8 million in face value for $125.4 million, with reported gains of $12.9 million.
- The company also bought back $50.0 million in face value of its 2027 unsecured notes for $49.6 million during the quarter, recording a gain of $0.1 million.
- Cogent has two non-binding letters of intent to sell four data centers it acquired and repurposed in connection with its Sprint acquisition. The proposed total cash price is approximately $100 million; the letters of intent do not by themselves complete the sales.
What the results show
Total revenue declined, while the reported growth in on-net and wavelength revenue came alongside lower operating expenses and higher adjusted EBITDA and margin compared with the prior quarter. The debt repurchases reduced the amount of notes outstanding, while the proposed data-center sales could bring in cash if completed.