Cogent Communications Holdings, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, service revenue decreased to $257.2 million from $275.4 million in the same period of 2023, reflecting a 6.7% decline. This drop was attributed to the cancellation of low-margin and non-core customers acquired through the Sprint Business, as well as reduced revenue from the Commercial Services Agreement with T-Mobile USA (TMUSA). In contrast, service revenue for the nine months increased by 17.2% to $783.8 million, up from $668.8 million in 2023, driven by growth in corporate and enterprise segments.

The company reported a net loss of $63.1 million for the third quarter, compared to a loss of $56.7 million in the prior year. For the nine months, the net loss was $160.8 million, a stark contrast to a net income of $1.1 billion in the same period of 2023, primarily due to a significant gain on the bargain purchase of Sprint Business recorded last year. Operating expenses for the third quarter decreased to $315.0 million from $326.0 million, while total operating expenses for the nine months rose to $951.5 million from $729.7 million, largely due to acquisition-related costs.

The acquisition of Sprint Communications, completed on May 1, 2023, for a nominal price of $1, resulted in a total payment of $61.1 million after adjustments. The Sprint Business contributed $113.0 million in revenue for the three months ended September 30, 2023, but incurred a pre-tax loss of $82.1 million. The company has also incurred $21.4 million in acquisition-related costs for the nine months ended September 30, 2024.

Cash and cash equivalents surged to $279.2 million as of September 30, 2024, compared to $75.1 million at the end of 2023. Total current assets increased to $569.4 million from $513.6 million. However, total liabilities rose to $2.88 billion from $2.60 billion, with senior unsecured notes due in 2027 increasing to $740.3 million from $447.1 million.

The company continues to focus on becoming a low-cost operator in the wireline telecom industry, leveraging its extensive fiber network and enhancing its service offerings. It has implemented a single network protocol to reduce operational costs and is expanding its optical transport services across data centers. The management team remains committed to optimizing performance and expanding its customer base, particularly in the corporate and enterprise segments.