Shares of Cogent Communications (CCOI 8.06%) fell as much as 33.8% on Friday, following a mixed earnings report. As of 3:10 p.m. ET, the stock had recovered slightly to a 27% drop.
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A beat on earnings, a miss on revenue
The multinational internet service provider hit some targets in Q4 2025, but missed others. Net losses of $0.64 per share were an improvement over a $0.91 loss per share in the year-ago period, and the average analyst had expected a deeper loss of $1.03 per share. But revenues fell 4.7% year-over-year to $240.5 million, missing the Street consensus target at $243.7 million.
NASDAQ: CCOI
Key Data Points
I'm not buying the dip
There's not much to celebrate in Cogent's report. EBITDA margins are down, the fiber-optic network the company acquired from Sprint in 2023 is losing thousands of customers per quarter, and the lucrative class of enterprise clients shrank by 20% in 2025.
The stock is now down 77% over the last year and trades at 0.9 times sales. Cogent is operating in full turnaround mode, hoping that the recently launched Optical Wavelengths service can make up for the fleeing Sprint customers.
I'm not so sure, because the average Wavelength site has about two paying customers so far. That's not much of a foundation for long-term growth. And the quarterly revenues per client runs in the thousands of dollars, not millions. Meanwhile, Cogent is running low on cash reserves.
The stock looks more like a falling knife than a promising rebound opportunity. I recommend staying away.
