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Cogent's Q3 Loss Narrower Than Expected, Revenues Down Y/Y
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Cogent Communications Holdings, Inc. (CCOI - Free Report) reported mixed third-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Washington, DC-based leading Internet service provider reported a top-line decline year over year, owing to weakness in net-centric and corporate business.
CCOI’s Net Income
The company reported a net loss of $63.1 million or $1.33 per share compared with a net loss of $56.7 million or $1.20 per share in the year-ago quarter. Top line contraction year over year led to a greater loss in the quarter. The bottom line beat the Zacks Consensus Estimate by a penny.
Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise
Service revenues decreased to $257.2 million from $275.4 million in the year-earlier quarter, owing to a decline in Off-Net revenues. The top line missed the consensus estimate of $260 million.
On-Net revenues in the quarter were $136.5 million, up from $129 million in the year-ago quarter. The top line beat our estimate of $130 million. Customer connections of On-Net declined 0.7% year over year to 87,655. The company’s Net-centric customer connections declined to 62,273 from 62,291 a year ago.
Off-Net revenues were $111.3 million compared with $130.6 million in the year-earlier quarter. The segment's customer connections decreased to 32,420 from 36,923 in the year-ago quarter. Net sales missed our revenue estimate of $122.4 million.
Wavelength revenues were $5.3 million in the quarter, up from $3 million in the year-ago quarter. The segment's customer connections were 1,041, up from 449 in the prior-year quarter.
Non-core revenues stood at $4.1 million, down from $12.8 million in the year-ago quarter.
CCOI’s Other Details
GAAP gross profit was $9.83 million, down from $15.1 million a year ago, with respective margins of 3.8% and 5.5%. Operating loss was $57.8 million compared with a loss of $50.6 million a year ago. EBITDA totaled $35.9 million compared with $43.6 million in the year-ago quarter for respective margins of 13.9% and 15.8%. Cogent raised its quarterly dividend by a penny to 99.5 cents per share for the fourth quarter of 2024. This was the 49th consecutive quarterly dividend increase from the company.
CCOI’s Cash Flow & Liquidity
In the third quarter of 2024, Cogent utilized $20.2 million cash in operations compared with $52.4 million cash utilized in the year-ago quarter. As of Sept. 30, 2024, the company had $279.2 million in cash and cash equivalents with $460.6 million of finance lease obligations (net of current maturities).
It provides cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank of 1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
UI’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support.
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Cogent's Q3 Loss Narrower Than Expected, Revenues Down Y/Y
Cogent Communications Holdings, Inc. (CCOI - Free Report) reported mixed third-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Washington, DC-based leading Internet service provider reported a top-line decline year over year, owing to weakness in net-centric and corporate business.
CCOI’s Net Income
The company reported a net loss of $63.1 million or $1.33 per share compared with a net loss of $56.7 million or $1.20 per share in the year-ago quarter. Top line contraction year over year led to a greater loss in the quarter. The bottom line beat the Zacks Consensus Estimate by a penny.
Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise
Cogent Communications Holdings, Inc. price-consensus-eps-surprise-chart | Cogent Communications Holdings, Inc. Quote
CCOI’s Revenues
Service revenues decreased to $257.2 million from $275.4 million in the year-earlier quarter, owing to a decline in Off-Net revenues. The top line missed the consensus estimate of $260 million.
On-Net revenues in the quarter were $136.5 million, up from $129 million in the year-ago quarter. The top line beat our estimate of $130 million. Customer connections of On-Net declined 0.7% year over year to 87,655. The company’s Net-centric customer connections declined to 62,273 from 62,291 a year ago.
Off-Net revenues were $111.3 million compared with $130.6 million in the year-earlier quarter. The segment's customer connections decreased to 32,420 from 36,923 in the year-ago quarter. Net sales missed our revenue estimate of $122.4 million.
Wavelength revenues were $5.3 million in the quarter, up from $3 million in the year-ago quarter. The segment's customer connections were 1,041, up from 449 in the prior-year quarter.
Non-core revenues stood at $4.1 million, down from $12.8 million in the year-ago quarter.
CCOI’s Other Details
GAAP gross profit was $9.83 million, down from $15.1 million a year ago, with respective margins of 3.8% and 5.5%. Operating loss was $57.8 million compared with a loss of $50.6 million a year ago. EBITDA totaled $35.9 million compared with $43.6 million in the year-ago quarter for respective margins of 13.9% and 15.8%. Cogent raised its quarterly dividend by a penny to 99.5 cents per share for the fourth quarter of 2024. This was the 49th consecutive quarterly dividend increase from the company.
CCOI’s Cash Flow & Liquidity
In the third quarter of 2024, Cogent utilized $20.2 million cash in operations compared with $52.4 million cash utilized in the year-ago quarter. As of Sept. 30, 2024, the company had $279.2 million in cash and cash equivalents with $460.6 million of finance lease obligations (net of current maturities).
CCOI’s Zacks Rank & Stocks to Consider
CCOI currently carries a Zacks Rank #3 (Hold).
Arista Networks, Inc. (ANET - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
It provides cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank of 1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
UI’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support.