Cogent Grew Steadily In Q2/2010

August 5th, 2010 by · Leave a Comment

Cogent Communications (NASDAQ:CCOI, news, filings) has been pretty quiet lately, with the only press releases this year being the obligatory announcements of presentations at conferences or of course earnings reports.  Hence I was curious to get a glimpse of where they are at with today’s Q2 earnings release.  Here is a quick glance at the numbers in context of prior quarters:

$ in millions Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10
Revenue 55.1 58.0 60.2 62.5 62.8 64.4
COS 24.2 24.6 26.4 27.6 28.1 29.1
SG&A 17.1 17.0 16.8 17.6 17.4 16.4
EBITDA 13.9 16.7 17.0 17.4 17.5 18.9
Earnings per share -0.19 -0.10 -0.07 -0.03 -0.01 -0.02
Gross Margins 56.1% 57.6% 57.8% 55.9% 55.3% 54.8%
EBITDA Margins 25.2% 28.7% 28.2% 27.8% 27.9% 29.3%

Revenues of $64.4M were slightly above expectations, as was a loss per share of two cents.  That comes despite a $1.2M revenue hit from currency fluctuations for the company’s European business.  Most of the sequential growth came from the sale of off-net services, which is a continuing trend that can be seen in the company’s declining gross margins.

However, the Q2 SG&A number was the lowest it has been in some time despite the higher revenues.  Therefore, EBITDA of $18.9M and EBITDA margins of 29.3% were new high water marks.  Loss per share of two cents was greater than the prior quarter, however it is this number that I believe Cogent is focusing on right now.  They are aiming squarely at sustainable profitability, something that has eluded them for so long.

Cogent added another 28 on-net buildings, bringing their current total to 1503, which is a continuation of the company’s steady progress on this number.  Traffic was flat with the prior quarter, which the company put down to seasonal fluctuations.

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