Cogent Communications Inc. CCOI reported mixed fourth-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. The Washington, DC-based leading Internet service provider reported a top-line decline year over year, owing to weakness in net-centric and corporate business.

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CCOI’s Net Income

The company reported a net loss of $43.3 million or 91 cents per share against a net income of $200.2 million or $4.17 per share in the year-ago quarter. Gain on bargain purchases from the Sprint business elevated the year-ago figure. However, the bottom line beat the Zacks Consensus Estimate by 31 cents.

In 2024, the company reported a net loss of $204.1 million or $4.28 per share against a net income of $1.27 billion or $26.62 per share in 2023.

CCOI’s Revenues

Service revenues decreased to $252.3 million from $272.1 million in the year-earlier quarter, owing to a decline in On-Net and Off-Net revenues. The top line missed the consensus estimate by $5 million.

In 2024, Service revenues increased to $1.03 billion from $940.92 million in 2023.

On-Net revenues in the quarter were $128.8 million, down from $138.1 million in the year-ago quarter. The top line missed our estimate of $135 million. Customer connections of On-Net declined 0.2% year over year to 87,500. The company’s Net-centric customer connections declined to 62,236 from 62,370 a year ago.

Off-Net revenues were $113.2 million compared with $123.7 million in the year-earlier quarter. The segment's customer connections decreased to 28,963 from 36,676 in the year-ago quarter. Net sales beat our revenue estimate of $111.8 million.

Wavelength revenues were $7 million in the quarter, up from $3.1 million in the year-ago quarter. The segment's customer connections were 1,118, up from 661 in the prior-year quarter.

Non-core revenues stood at $3.4 million, down from $7.3 million in the year-ago quarter.

Other Details

GAAP gross profit was $29.83 million, marginally up from $29.74 million a year ago, with respective margins of 11.8% and 10.9%. Operating loss was $32.8 million compared with a loss of $68.5 million a year ago.

EBITDA totaled $41.9 million compared with $6 million in the year-ago quarter for respective margins of 16.6% and 2.2%. Cogent raised its quarterly dividend by a penny to $1.005 per share for the first quarter of 2025. This was the 50th consecutive quarterly dividend increases from the company.

Cash Flow & Liquidity of CCOI

In the fourth quarter of 2024, Cogent generated $14.5 million cash in operations compared with $48.7 million cash utilized in the year-ago quarter. In 2024, the company utilized $8.6 million cash in operations compared with $17.3 million cash generated in 2023.

As of Dec 31, 2024, the company had $198.5 million in cash and cash equivalents with $517.2 million of finance lease obligations (net of current maturities) compared with respective tallies of $75.1 and $419.9 million in the prior year.

CCOI’s Zacks Rank

CCOI currently carries a Zacks Rank #2 (Buy).

Other Key Picks

InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, it delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Celestica Inc. CLS sports a Zacks Rank #1 at present. The company provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers.

United States Cellular Corporation USM sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 150%.

U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology.

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