OREANDA-NEWS. Cogent Communications Holdings, Inc. (NASDAQ: CCOI) today announced service revenue of $108.3 million for the three months ended March 31, 2016, an increase of 11.4% from $97.2 million for the three months ended March 31, 2015 and an increase of 3.0% from $105.2 million for the three months ended December 31, 2015. Foreign exchange had no impact on service revenue from Q4 2015 to Q1 2016 but negatively impacted service revenue growth from Q1 2015 to Q1 2016 by $0.9 million. On a constant currency basis, service revenue grew by 12.2% from Q1 2015 to Q1 2016 and grew by 3.0% from Q4 2015 to Q1 2016.

On-net service is provided to customers located in buildings that are physically connected to Cogent’s network by Cogent facilities. On-net revenue was $78.7 million for the three months ended March 31, 2016; an increase of 10.5% over $71.2 million for the three months ended March 31, 2015 and an increase of 2.9% from $76.5 million for the three months ended December 31, 2015.

Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities and services to provide the last mile portion of the link from the customers’ premises to Cogent’s network. Off-net revenue was $29.4 million for the three months ended March 31, 2016; an increase of 14.1% over $25.7 million for the three months ended March 31, 2015 and an increase of 3.3% over $28.4 million for the three months ended December 31, 2015.

Non-GAAP gross profit increased by 8.5% from $56.3 million for the three months ended March 31, 2015 to $61.1 million for the three months ended March 31, 2016 and increased by 2.8% from $59.5 million for the three months ended December 31, 2015. Non-GAAP gross profit margin percentage was 56.5% for the three months ended March 31, 2016, 57.9% for the three months ended March 31, 2015 and 56.5% for the three months ended December 31, 2015. Excise taxes, including Universal Service Fund fees, recorded on a gross basis and included in service revenue and cost of network operations expense were $2.0 million for the three months ended March 31, 2016, $1.7 million for the three months ended December 31, 2015 and $0.1 million for the three months ended March 31, 2015.

Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, increased by 14.2% from $31.2 million for the three months ended March 31, 2015 to $35.6 million for the three months ended March 31, 2016 and decreased by 3.1% from $36.8 million for the three months ended December 31, 2015. EBITDA, as adjusted, margin was 32.9% for the three months ended March 31, 2016, 32.1% for the three months ended March 31, 2015 and 34.9% for the three months ended December 31, 2015.

Basic and diluted net income (loss) per share was $0.08 for the three months ended March 31, 2016, $(0.04) for the three months ended March 31, 2015 and $0.06 for the three months ended December 31, 2015.

Total customer connections increased by 16.8% from 47,411 as of March 31, 2015 to 55,356 as of March 31, 2016 and increased by 4.1% from 53,152 as of December 31, 2015. On-net customer connections increased by 16.0% from 40,732 as of March 31, 2015 to 47,252 as of March 31, 2016 and increased by 3.9% from 45,473 as of December 31, 2015. Off-net customer connections increased by 20.2% from 6,368 as of March 31, 2015 to 7,654 as of March 31, 2016 and increased by 5.2% from 7,279 as of December 31, 2015. The number of on-net buildings increased by 116 on-net buildings from 2,155 on-net buildings as of March 31, 2015 to 2,271 on-net buildings as of March 31, 2016 and increased by 20 onnet buildings from 2,251 on-net buildings as of December 31, 2015. 

Quarterly Dividend Increase Approved

On May 4, 2016, Cogent’s board approved a regular quarterly dividend of $0.37 per common share payable on June 7, 2016 to shareholders of record on May 20, 2016. This first quarter 2016 regular dividend of $0.37 per share represents an increase of 2.8% from the fourth quarter 2015 regular dividend of $0.36 per share.

The payment of any future dividends and any other returns of capital will be at the discretion of Cogent’s board of directors and may be reduced, eliminated or increased and will be dependent upon Cogent’s financial position, results of operations, available cash, cash flow, capital requirements, limitations under Cogent’s debt indenture agreements and other factors deemed relevant by Cogent’s board of directors.

About Cogent Communications

Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1 facilities-based ISP. Cogent specializes in providing businesses with high speed Internet access, Ethernet transport, and colocation services. Cogent’s facilities-based, all-optical IP network backbone provides services in over 190 markets globally.