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Jun 30, 2020
Cogent Q2 2020 Earnings Report
Cogent's Q2 2020 results were announced, revealing a slight increase in service revenue and growth in customer connections amidst the ongoing COVID-19 pandemic.
Key Takeaways
Cogent Communications reported a service revenue of $141.0 million for Q2 2020, a 0.1% increase from the previous quarter and a 4.6% increase year-over-year. The company experienced growth in on-net revenue and total customer connections, while navigating the challenges posed by the COVID-19 pandemic, including decreased sales productivity among corporate customers.
Service revenue reached $141.0 million, showing a slight increase from the previous quarter.
GAAP gross profit increased by 11.3% year-over-year, reaching $67.2 million.
Total customer connections grew by 4.8% compared to the same period last year, reaching 88,112.
The Board approved a regular quarterly dividend increase of $0.025 per share.
Revenue by Segment
Forward Guidance
Cogent expects to be impacted by the COVID-19 pandemic. They anticipate a decrease in sales productivity, particularly in sales to its corporate customers. Traffic on the Cogent network is expected to grow at an accelerated rate compared to Cogent’s historical growth rates.
Positive Outlook
- Traffic on the Cogent network is expected to grow at an accelerated rate compared to Cogent’s historical growth rates.
- Cogent's entire workforce continues to work remotely with dedication.
- Cogent continues to be impacted by the COVID-19 pandemic and the accompanying responses by governments around the world.
- Cogent experienced a decrease in sales productivity, particularly in sales to its corporate customers.
- During the second quarter of 2020, the impact of the COVID-19 pandemic on Cogent’s business remained limited.
Challenges Ahead
- Cogent may also experience slowdowns in new customer orders, find it difficult to collect from customers who are experiencing financial distress, encounter difficulties accessing the buildings and locations where Cogent installs new services and serves existing customers, or have difficulties procuring, shipping or installing necessary equipment on its network.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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