Cogent Communications issued its Q3 earnings report this morning, following through with yet another dividend boost and another step forward on the growth front. Here are their Q3 numbers in some context:
| $ in millions | Q3/12 | Q4/12 | Q1/13 | Q2/13 | Q3/13 |
|---|---|---|---|---|---|
| – On-net | 58.1 | 60.4 | 61.7 | 62.7 | 64.5 |
| – Off-net | 20.9 | 21.6 | 22.3 | 22.6 | 22.8 |
| – Other | 0.6 | 0.6 | 0.6 | 0.5 | 0.4 |
| Revenue | 79.7 | 82.6 | 84.6 | 85.8 | 87.8 |
| EBITDA | 26.2 | 28.5 | 28.3 | 29.6 | 30.7 |
| Earnings per share | 0.00 | -0.01 | 0.01 | 0.03 | 0.05 |
| Gross Margin | 54.3% | 54.6% | 56.1% | 56.9% | 57.4% |
| Adj. EBITDA Margin | 32.9% | 34.6% | 33.5% | 34.5% | 35.0% |
| On-net Buildings | 1832 | 1867 | 1890 | 1921 | 1955 |
Both revenues and earnings per share grew, but came in a bit less than the street appears to have been expecting. Margins continued to expand as the company puts more revenue up against the fixed expenses underlying much of its network.
In terms of dividends, Cogent’s board of directors has approved both a boost of the quarterly dividend to $0.15 per share and another $0.22 per share under its return of capital program, for a total of $0.37 this quarter.
Operationally Cogent added 34 more on-net buildings to their network and saw 16% sequential growth in data traffic. Cogent has been quiet on many fronts for quite a while now, no new product announcements, network expansions, or other aggressive moves related to the cloud or SDN. It’s been serving them pretty well though.
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You mention not much happening with Cogent. Thi s compny is a mystery to me. I suppose you can chug along and basically stay status quo growing a nice small business, but that never seems to be the of world so what would they do. I dont see them buying Fiber Networks, always the now buzz word of cloud service or even aVOIP but is there options. I see them as a exceptional take over target not as a standalong growth company.