Cogent Communications' Q4 2024: Contradictions in IPv4 Revenue Growth, Wavelength Strategy, and Market Expectations

These are the key contradictions discussed in Cogent Communications' latest 2024Q4 earnings call, specifically including: IPv4 leasing revenue growth expectations, wavelength sales strategy, IPv4 pricing strategy, and wavelength market size and strategy:



Revenue Growth and Diversification:
- Cogent Communications Holdings reported total revenue of $252.3 million for the quarter, marking an increase over the previous year.
- The growth was driven by strong performance in the wavelength services and IPv4 leasing business, as well as integration of the Sprint network assets.

Profitability and Cost Management:
- Cogent achieved EBITDA, as adjusted, of $66.9 million for the quarter, reflecting an increase of 280 basis points in margin.
- This improvement was attributed to reduced costs, especially in SG&A, which decreased by 7.5% quarter-over-quarter and 25.6% year-over-year.

Wavelength Services and Market Expansion:
- Cogent's wavelength revenue grew sequentially by 31.8%, contributing to a 240% year-over-year increase.
- The significant growth was due to the integration of Sprint's network, expanding the product offering and expanding reach to 808 locations.

IPv4 Leasing and Pricing Strategy:
- IPv4 leasing revenue reached $12.6 million for the quarter, marking a 27.2% year-over-year increase.
- The company implemented a pricing strategy focused on increasing average prices per megabit, reflecting strong demand for its IP services.