Cogent Communications Reports Q3 2026 Financial Results
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Cogent Communications reported its third quarter 2026 financial results, revealing a service revenue of $231.2 million for the quarter, a decrease of $4.4 million from the $235.6 million reported in the previous quarter. The company noted that this decline was partially due to foreign exchange rate impacts, with a $0.3 million negative impact from Q2 2026 to Q3 2026 and a $0.5 million impact from Q3 2025 to Q3 2026.
On-net revenue, including wavelengths, increased by 2.4% sequentially from Q2 2026 to $153.9 million for Q3 2026, marking a 5.8% increase from the same period in 2025. Wavelength revenue specifically saw a 7.8% sequential increase from Q2 2026 to $16.0 million for Q3 2026, a significant 57.0% rise from the $10.0 million reported in Q3 2025.
Cogent's adjusted EBITDA for Q3 2026 stood at $73.9 million, a 3.9% increase from the $71.1 million reported in Q2 2026. The adjusted EBITDA margin was 32.0% for Q3 2026, up from 30.2% in the previous quarter. Network operations expenses, excluding equity-based compensation, were $121.0 million for Q3 2026, a 3.1% decrease from Q2 2026, while selling, general, and administrative expenses, excluding equity-based compensation, were $61.3 million, a 5.1% decrease from the previous quarter.
Capital expenditures for Q3 2026 amounted to $36.3 million, a 14% increase from the $31.8 million reported in Q3 2025. The company's total cash, including restricted cash, at the end of Q3 2026 was $181.3 million.
In other financial activities, Cogent made significant purchases of its debt securities. During Q3 2026, the company purchased $118.4 million par value of its 2032 secured notes at a discount for $106.7 million, resulting in a gain of $11.3 million. In total, Cogent purchased $138.8 million par value of its 2032 secured notes at a discount for $125.4 million, generating a gain of $12.9 million in 2026. Additionally, Cogent purchased $50.0 million par value of its 2027 unsecured notes at a discount for $49.6 million, yielding a gain of $0.1 million.
Looking ahead, Cogent has entered into non-binding letters of intent to sell four data centers it acquired and repurposed from its Sprint acquisition for a total of approximately $100.0 million in cash. The company's service revenue for Q3 2026 was $231.2 million, reflecting a decrease of 4.4% from the same period in 2025.