Cogent Boosts Dividend, Beats on Revs, Light on EPS

May 8th, 2014 by · Leave a Comment

Cogent rescheduled its earnings call to earlier than usual so its CEO can make his date with Congress to talk about internet traffic.  The short version: revenues were strong, earnings per share was not as much, and yes they raised the dividend by another penny and bought back a pile of stock.  Here are Cogent's Q1 numbers in some context.

$ in millions Q1/13 Q2/13 Q3/13 Q4/13 Q1/14
(actual)
 - On-net 61.7 62.7 64.5 66.0 69.1
 - Off-net 22.3 22.6 22.8 23.4 23.5
 - Other 0.6 0.5 0.4 0.4 0.4
Revenue 84.6 85.8 87.8 89.9 92.9
EBITDA 28.3 29.6 30.7 31.5 32.1
Earnings per share 0.01 0.03 0.05 1.10 0.00
Gross Margin 56.1% 56.9% 57.5% 57.4% 57.4
Adj. EBITDA Margin 33.5% 34.5% 35.0% 35.0% 34.6%
On-net Buildings 1890 1921 1955 1990 2024

A strong quarter for on-net revenue helped boost Cogent's growth in the first quarter of 2014, while higher interest expenses helped push down earnings per share.  Revenues came in a bit above expectations (mine and the street consensus), but breakeven earnings per share were a few pennies shy of analyst projections.

Operationally, Cogent passed the 2000 on-net building milestone as expected, adding 34 more during the quarter.  They saw traffic levels increase 16% over Q4 and 69% over Q1 of last year.  Headcount has continued to rise, reaching 724 by the end of March.

The dividend for Q2 went up another penny to $0.17, while $14.2M in cash went to stock buybacks.

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Categories: Financials · Internet Backbones · Metro fiber

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