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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