Cogent Communications

At the Citi TMT Conference 2026, Cogent said declines from the acquired Sprint business are easing and the organic business—with better margins and higher cash generation—is gaining importance. Traditional transit and VPN services still account for 84% of revenue, while fast‑growing areas such as IPv4 leasing (about $70m p.a.) and wavelength services (about $65m, +62% YoY) are contributing increasingly. The company sold 10 data centers for $225m, reduced debt and is reviewing capex, expects to return to positive revenue growth within one to two years, and sees further EBITDA upside even without T‑Mobile subsidies. Hardware supply‑chain bottlenecks could temporarily slow wavelength growth but are expected to ease next year. » More on de.investing.com

At the Goldman Sachs conference, Cogent said its core business is growing, adjusted EBITDA margins have recovered to around 20%, and the Wavelength business grew from zero to USD 60m within 18 months. The company is selling data centers (10 facilities for USD 225m), using the proceeds to pay down debt and targeting a net leverage ratio of 4.0x (currently 6.23x). Management sees especially strong demand for Wavelength services for AI training as a long-term growth driver and expects annual margin improvements of at least 200 basis points. Shareholder returns will only be resumed after the leverage target has been reached. » More on de.investing.com

Cogent Communications shares fell about 6.2% in premarket trading after JPMorgan downgraded the stock from Neutral to Underweight; the price target was cut from $22 to $9 and the target horizon moved to December 2027. JPMorgan cited a disappointing quarter, slower-than-expected Wave installations and revenue losses from expiring Sprint fixed‑line contracts. The bank pointed to high leverage (net leverage 6.75x), negative free cash flow and no clear path to the targeted leverage level, and said the data‑center monetization catalyst is largely exhausted. In Q2 Cogent reported revenue down 4.3% to $235.6m and adjusted EBITDA of $71.1m, both below expectations, after which the stock has fallen roughly 68% year‑to‑date. » More on de.investing.com