Cogent Communications Group Inc. (CCOI) told investors at Citi’s 2026 Global TMT Conference on Wednesday that its business is broadening beyond the legacy Sprint acquisition it completed in 2022, with organic revenue growth accelerating and a portfolio of data centers being rolled out for sale.
CEO Dave Schaeffer opened with a call for simplicity. “In many ways, it's probably the simplest company that you and Mike cover,” he said, noting that “we're shrouded in a veil of complexity.”
Sprint’s contribution has shrunk dramatically. At the time of the 2022 deal, Sprint accounted for 42% of combined revenue; three years later, that share fell to 15%. The acquired base contracted at an aggregate rate of 69% over the period. Meanwhile, Cogent’s organic business grew at a compounded annual rate of 29% across the same window.
Revenue mix reflects that shift. Legacy transit and VPN services now represent roughly 84% of Cogent’s top line, with transit growing at about 8% annually. Internet traffic accelerated to 15% year-over-year from 8%, driven by agentic AI applications; transit carries 98% of traffic on Cogent’s IP network. Dedicated Internet Access historically expanded at 11.2% annually over an 18-year stretch, contracted 9% during the pandemic and has since rebounded to 3%.
Newer businesses are gaining traction. Wavelength sales — launched in earnest in January 2025 — now run at approximately $65 million, or 6.5% of revenue, growing 62% year-over-year. The service reached 608 locations and 548 unique customers, having captured 3% market share over six quarters against a target of 25% of a $2 billion North American market. IPv4 address leasing generated about $70 million in annual revenue, or 7% of total revenue, growing 18% year-over-year, with roughly 40% of Cogent’s 38 million addresses now leased.
On the real-estate side, Cogent closed the sale of its first 10 data centers on June 29 for $225 million — about $4.3 million per megawatt — generating a $125 million tax-sheltered gain. Transaction costs were under $1 million, and approximately $175 million of proceeds went toward reducing leverage. Fourteen additional data centers remain listed for sale, with two letters of intent already received.
The company inherited 482 Sprint buildings totaling 1.9 million square feet and 230 megawatts of inbound power, and converted 125 Sprint switch sites into data centers through a program that cost roughly $100 million. Original Cogent holdings include 54 data centers (52 leaseholds) with 634,000 square feet of raised floor and 69 megawatts.
Colocation, which accounts for about 2% of revenue, operates across 170 data centers spanning 1.3 million square feet and approximately 150 megawatts of power. Cogent also holds a 35% share of the 1.1 billion square feet of directly served multi-tenant office buildings, having enabled 1,865 buildings to sell 10-gigabit connections.
Network reconfiguration has been underway across more than 110 cities, with over 200 wave rings deployed and roughly 110 reconfigurable optical add-drop multiplexers installed.
Financially, Cogent reduced debt by about $190 million through open-market repurchases and asset-sale proceeds, including $138.9 million of secured debt and $50 million of unsecured debt. Total debt stands at $2.64 billion, and aggregate leverage rose from 3.8 times to 6.2 times. The 2027 maturity carries a 7% coupon; underlying base rates have risen 150 basis points since issuance. Cash interest expense is expected to remain in the $180 million to $190 million range. IPv4 asset-backed securitizations achieved a cost of capital of about 6.8%.
EBITDA grew in absolute terms in 11 of the past 12 quarters despite average top-line growth of negative 5% post-Sprint, with margin expansion averaging about 800 basis points annually over the prior three years versus a historical pace of roughly 200 basis points.
Capital expenditures currently run at about $140 million annually, down $18 million sequentially but above the longer-term target of $100 million due to network reconfiguration, data-center conversions and vendor price increases. Remaining subsidy payments from T-Mobile total approximately $180 million through 2027, declining to roughly $100 million annually in less than two years, alongside $50 million in announced cost savings.
