Cogent Communications is sharpening its product strategy around high-capacity transport and IP transit services, with its latest quarterly results reflecting both the challenges of legacy revenue contraction and the momentum in newer offerings such as wavelength services. For the quarter ending June 30, 2025, service revenue totaled $246.2 million, down 0.3% from Q1 and 5.5% from a year earlier.
While on-net and off-net revenue softened, wavelength services posted substantial gains and IP transit agreements continued to deliver material contributions.
The company’s wavelength business – launched following the acquisition of Sprint’s wireline assets – remains its fastest-growing segment. Revenue from optical wavelength services climbed to $9.1 million in Q2, up 27.2% from Q1 and an impressive 149.8% year-over-year. Wavelength customer connections nearly doubled from 754 a year ago to 1,469 in Q2 2025.
Cogent now offers wavelength services in 938 data centers across the U.S., Mexico, and Canada, leveraging predominantly owned fiber for high-capacity, low-latency connections designed for carriers, content platforms, and hyperscale cloud providers. This expansion is enabling the company to compete more aggressively for bandwidth-intensive workloads, including cloud interconnects and media delivery.
IP transit also remains a cornerstone product. Under the long-term IP Transit Services Agreement signed with T-Mobile when it acquired Sprint’s assets, Cogent is providing backbone connectivity for T-Mobile’s traffic while receiving predictable recurring payments. The agreement, worth $700 million over several years, delivered $25 million in Q2 2025. While this was down from $66.7 million in Q2 2024 due to the payment schedule’s structure, the deal continues to underpin Cogent’s position as a major Tier 1 transit provider with deep interconnection across the global Internet.
On-net services – direct connections to customers in buildings linked to Cogent’s network – generated $132.3 million in Q2, up 2.1% from Q1 but down 6% year-over-year. Off-net services, which rely on third-party last-mile providers, saw steeper declines, falling to $102.2 million. The company continues to prioritize on-net expansion, adding 143 on-net buildings over the past year to reach 3,529 locations.
900+ Data Centers Lit For Wavelength Services
Cogent’s infrastructure strategy is increasingly product-led, focusing on high-margin, scalable services over low-growth, non-core offerings. The Sprint acquisition has enabled it to extend its optical backbone and layer wavelength services directly onto owned fiber, reducing reliance on leased capacity and improving control over service performance. These capabilities are being marketed alongside its Tier 1 IP transit network, giving customers the option of combining point-to-point high-capacity transport with global internet reach.
Operationally, Cogent delivered Q2 2025 EBITDA of $48.5 million, up from $27.2 million a year earlier, with margins rising to 19.7%. Adjusted EBITDA, excluding acquisition-related effects, was $73.5 million, while non-GAAP gross margin improved to 44.4% from 40.2% in Q2 2024. These gains reflect efficiency improvements and the growing share of high-value services like wavelength in the overall mix.
By aligning its portfolio around wavelength and IP transit, Cogent is positioning itself to capture enterprise, carrier, and hyperscale demand for both dedicated optical transport and global connectivity. With more than 900 data centers lit for wavelength services and a multi-year transit agreement with a major mobile operator, the company is leveraging its assets to expand product reach and deepen its role in the high-capacity network services ecosystem.
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