Cogent Ends 2009 With Another Solid Performance

February 25th, 2010 by · Leave a Comment

IP and data services specialist Cogent Communications (NASDAQ:CCOI, news, filings) reported their Q4 and full year 2009 earnings this morning, showing continued strength.  Revenue was slightly above estimates, EBITDA grew at normal rates, and earnings per share were in line after taking out a deferred tax adjustment.   Here is a quick table summarizing Q4 in the context of the rest of 2009:

$ in millions Q1/09 Q2/09 Q3/09 Q4/09
Revenue 55.1 58.0 60.2 62.5
COS 24.2 24.6 26.4 27.6
SG&A 17.1 17.0 16.8 17.6
EBITDA 13.9 16.7 17.0 17.4
Earnings per share -0.19 -0.10 -0.07 -0.03
Gross Margins 56.1% 57.6% 57.8% 55.9%
EBITDA Margins 25.2% 28.7% 28.2% 27.8%

Cogent managed to grow quite steadily all year despite the economic crisis.  One reason for this is product mix and timing: their enterprise metro and data center businesses were amongst the strongest in tech, while in IP transit they took their lumps in 2008 before others felt pricing pressure increase.

The other factor has been that the company has been pushing off-net revenues quite hard, Q4 levels were up some 28% over the same period last year.  That has helped both top line growth and also loss per share, which is edging closer and closer to an actual profit.  But of course, it also means that their gross margins have been falling in tandem.

Operationally, Cogent added its usual quote of 30 on-net buildings, now connecting 1451 to its footprint.  Traffic growth spiked 23% from Q3, and finished up 75% for the full year - outpacing most estimates for the overall internet in 2009.

They didn't offer guidance for 2010, but will probably give some qualitative impressions in the CC.

Categories: Financials · Internet Traffic · Metro fiber

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