Cogent Communications Reports First Quarter Results and Increases its Regular Quarterly Dividend on its Common Stock

Financial Performance - Cogent Communications reported service revenue of $247.0 million for Q1 2025, a decrease of 2.1% from Q4 2024 and a decrease of 7.2% from Q1 2024 [2] - On-net revenue was $129.6 million for Q1 2025, an increase of 0.7% from Q4 2024 but a decrease of 6.5% from Q1 2024 [4] - Off-net revenue was $107.3 million for Q1 2025, a decrease of 5.2% from Q4 2024 and a decrease of 9.2% from Q1 2024 [5] - Wavelength revenue increased to $7.1 million for Q1 2025, up 2.2% sequentially and up 114.0% year-over-year [6][16] - Non-core revenue was $3.0 million for Q1 2025, down from $3.4 million in Q4 2024 and $6.0 million in Q1 2024 [7] Profitability Metrics - GAAP gross profit increased by 27.4% to $33.6 million for Q1 2025 compared to Q4 2024 and increased by 12.5% from Q1 2024 [8] - GAAP gross margin was 13.6% for Q1 2025, up from 11.8% in Q4 2024 and 9.9% in Q1 2024 [9] - Non-GAAP gross profit increased by 12.8% to $110.1 million for Q1 2025 compared to Q4 2024 and also increased by 12.8% from Q1 2024 [10] - Non-GAAP gross margin was 44.6% for Q1 2025, compared to 38.7% for Q4 2024 and 36.7% for Q1 2024 [11] Cash Flow and Expenses - Net cash provided by operating activities was $36.4 million for Q1 2025, significantly up from $14.5 million in Q4 2024 and $19.2 million in Q1 2024 [11] - Selling, general and administrative expenses (SG&A) were $66.3 million for Q1 2025, an increase of 19.0% from Q4 2024 but a decrease of 5.4% from Q1 2024 [13] Customer Metrics - Total customer connections decreased by 9.1% year-over-year to 120,731 as of March 31, 2025, and decreased by 2.1% from December 31, 2024 [20] - On-net customer connections decreased by 0.9% year-over-year to 86,781, while off-net customer connections decreased by 20.4% year-over-year to 27,508 [20] - Wavelength customer connections increased by 18.2% sequentially to 1,322 as of March 31, 2025 [20] Strategic Developments - Cogent entered into a Commercial Agreement with T-Mobile for colocation and connectivity services, generating $0.7 million in revenue for Q1 2025 [2] - The company closed its issuance of $174.4 million of its 6.6% IPv4 Securitized Notes on April 11, 2025 [16] - Cogent approved a quarterly dividend increase to $1.01 per share for Q2 2025, marking the fifty-first consecutive quarterly dividend increase [23]