Internet backbone operator Cogent Communications (NASDAQ:CCOI, news, filings) turned in its results for the fourth quarter and full year 2010, finishing a quiet but rather powerful year with a quarterly profit of $0.06 per share, six cents above expectations, and $0.01 per share overall. The company has let its financial progress do its talking in 2010, here’s a quick table:
|$ in millions||Q4/09||Q1/10||Q2/10||Q3/10||
|Earnings per share||-0.03||-0.01||-0.02||-0.01||+0.06||+0.01|
|Adj. EBITDA Margin||27.8%||27.9%||29.3%||30.4%||32.5%||30.1%|
Revenue: Since the fourth quarter of 2009, each quarter has seen revenue growth at a higher rate than the prior one, culminating in double digit growth and putting them within striking distance of $300M in 2011, though probably not quite. The company has given less guidance in the last few years, but I’m curious how they view 2011.
EBITDA and Margins: EBITDA grew just as steadily, with EBITDA margins surging once again, this time all the way up to 32.5% for the fourth quarter, up almost 500 basis points over Q4/09.
Traffic: Interestingly, Cogent did all this while seeing rather unimpressive traffic growth of 41% over 2009. Obviously it isn’t their wholesale IP business that is driving things, which brings us to…
On-Net Buildings: Cogent added another 40 on-net buildings to its network, for 128 on the year and a total of 1579 by December 31. They’ve been picking up this pace all year, and they seem likely to continue.
Conclusions: It’s hard to find any weaknesses in Cogent’s 2010, they obviously went into it with a plan and executed it ruthlessly all the way to a profit – which I have felt was the main goal all year. With profit and excess cash flow come greater flexibility. I wonder what they will do with it in 2011.
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