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Cogent (CCOI) Q3 Earnings Beat Estimates on Top-Line Growth

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  • CCOI
  • CSCO
  • SEAC
  • HLIT

Cogent Communications Holdings, Inc. CCOI reported healthy third-quarter 2021 results, wherein the bottom line surpassed the Zacks Consensus Estimate and the top line matched the same. Top-line expansion on the back of higher on-net revenues and accretive customer connections drove Cogent’s quarterly performance.

Bottom Line

Net income in the September quarter was $13.3 million or 28 cents per share against a net loss of $5 million or a loss of 11 cents per share in the prior-year quarter. The year-over-year improvement was primarily driven by unrealized foreign exchange gain on 2024 euro notes in the reported quarter and income tax benefit in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by 4 cents.

Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise

Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise
Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise

Cogent Communications Holdings, Inc. price-consensus-eps-surprise-chart | Cogent Communications Holdings, Inc. Quote

Revenues

Quarterly service revenues increased 4% year over year to $147.9 million, driven by higher on-net revenues, along with a positive impact of foreign exchange. The top line was in sync with the consensus estimate.

On-net revenues grew 5.7% year over year to $111.1 million, reflecting an increase in on-net customer connections. On-net service is provided to customers located in buildings that are physically connected to Cogent’s network by its facilities.

Off-net revenues declined 1.2% to $36.7 million. Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities.

Cogent established its 3,000th on-net connection in the third quarter of 2021 and currently provides its services in 50 countries.

Other Details

GAAP gross profit was $68.7 million, up from $66.2 million for respective margins of 46.4% and 46.5%. Total operating expenses were $119.4 million compared with $115.9 million in the prior-year quarter. Operating income was $28.6 million, up from $26 million. EBITDA totaled $57.8 million compared with $54.6 million in the year-ago quarter with respective margins of 39% and 38.4%. Total customer connections grew 5.1% to 92,991 on Sep 30, 2021.

Cogent increased its dividend for the 37th consecutive quarter. It increased its quarterly dividend by 2.5 cents per share to 83 cents for the fourth quarter of 2021. The amount is payable on Dec 3 to shareholders on record as of Nov 19.

Cash Flow & Liquidity

During the first nine months of 2021, Cogent generated $134.3 million of net cash from operating activities compared with $102.7 million in the year-ago period. As of Sep 30, 2021, the company had $351.9 million in cash and cash equivalents with $16.7 million of finance lease obligations.

Zacks Rank & Stocks to Consider

Cogent currently has a Zacks Rank #3 (Hold).

Few better-ranked stocks in the broader industry are Harmonic Inc. HLIT, SeaChange International, Inc. SEAC, and Cisco Systems, Inc. CSCO. While Harmonic sports a Zacks Rank #1 (Strong Buy), SeaChange International and Cisco Systems carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Harmonic delivered a trailing four-quarter earnings surprise of 61.1%, on average.

SeaChange International delivered a trailing four-quarter earnings surprise of 28.9%, on average.

Cisco Systems delivered a trailing four-quarter earnings surprise of 3.4%, on average.


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Cogent Communications Holdings, Inc. (CCOI) : Free Stock Analysis Report

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