Cogent sets focus on capturing 25% of the North American long-haul optical wavelength market
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Cogent likes its chances of capturing a larger share of the burgeoning wavelength services market, expanding its reach to more locations to meet demand from enterprises and hyperscalers.
As of the end of the first quarter, Cogent was offering wavelength services in 1,107 locations at 10G, 100G, or 400G, with provisioning intervals of about 30 days.
Its wavelength customer connections increased year-over-year by 71.2% and increased sequentially by 9.6% to 2,263. As of the end of the quarter, we have sold wavelength services at 581 unique locations and to 492 unique customers.
The provider’s wavelength revenues for the quarter were $13.6 million, up 90.8% year over year and 12.3% sequentially.
Dave Schaeffer, CEO of Cogent, told investors during its first quarter earnings call that its goal is to continue enhancing its market share.
“We intend to continue to focus on capturing 25% of the North American long-haul market,” he said. “As of today, we have captured approximately 3% of that market.”
100G wavelengths dominate
Within the wavelength service domain, Cogent is finding success in selling 100G services.
Meanwhile, the service provider is seeing an uptick in 400G wavelengths while 10G wavelengths are declining.
Schaeffer said that 75% of its sales have been 10G wavelengths.
“The 100-gig percentage has remained relatively constant,” he said. “I think it was 78% the quarter before. And of the remaining 25%, there has been a shift away from 10 gig sales and towards 400 gig sales, with over 10% of sales now 400 gig.”
Cogent is seeing a wide range of customers, from enterprises to hyperscalers, adopt its wavelength services.
“We are winning existing waves with customers that are frustrated with their current supplier,” Schaeffer said. “We are winning waves from customers who are increasing their throughput. We are winning waves due to locations shifting and the breadth of our footprint. And we are winning brand new builds, particularly from hyperscalers and neoclouds, which are new to the market.”
Wavelength challenges
While Cogent is making progress with its wavelength service set, the service provider faced installation challenges from its customers due to supply chain constraints.
“On wavelength installs, we have seen a variety of customers pushing out their acceptance of wavelengths,” Schaeffer said. “We provisioned more wavelengths in the quarter than we did in the previous quarter, but the customers did not accept them. Constraints are driving that decision to push out acceptance.”
Cogent’s wavelength customers are dealing with power availability issues in data centers, as well as for network equipment and optical components.
“We have seen constraints on power availability in data centers,” Schaeffer said. “We've seen customers change wavelength termination points to avoid a constraint in one data center when moving to another data center. There are equipment constraints from pluggable optics on the customer side to the ability to have GPUs installed to accept wavelengths.”
He added that a portion of its wavelength customer base is ordering services at “facilities that are not yet either fully powered or fully constructed, but we do think that will ease."
Cogent is likewise seeing the effects of supply chain constraints on its ability to procure certain equipment and to make network upgrades to support wavelength services.
“The supply chain constraints did hit Cogent in terms of capital equipment from pluggable optics to normal sequential capital installs across our network,” Schaeffer said. “All of our major vendors have had price increases.”
On-net, wavelength services lead revenues
Cogent’s overall service revenue dipped 0.6% sequentially and 3.2% year-over-year to $239.2 million.
Despite the decline, Cogent did see an uptick in on-net fiber-based business services and wavelengths.
Cogent serves its on-net customers in 3,605 total on-net buildings. Its total on-net revenue, including on-net wavelengths, was $149.2 million for the quarter. Wavelength revenues rose 12.3% sequentially from Q4 2025 to $13.6 million for the first quarter of 2026 and increased by 90.8% from the first quarter of 2025.
“Our total on-net revenues, including wavelength on-net revenues, increased from 47% to 62% of total revenues this quarter,” said Thaddeus Weed, CFO of Cogent.
However, off-net revenues were $89 million for the quarter, down 17% year-over-year decrease and 4.2% sequentially. Cogent’s off-net revenues declined 37% of our total revenues this quarter.
“Our off-net revenue results are impacted by the migration of certain off-net customers to on-net and the continued grooming and termination of low-margin off-net contracts, virtually all of the decline from the Sprint wireline acquired customers,” Weed said.
Cogent’s total enterprise business accounted for 13.5% of our revenue this quarter. Its quarterly enterprise revenue decreased by 26% year-over-year and by 5.7% sequentially, primarily due to a reduction in acquired Sprint wireline enterprise off-net revenue.
“The Sprint wireline enterprise customers represented virtually all of our enterprise revenues at the closing of the acquisition, and the Sprint wireline acquired Enterprise revenue base has decreased from a run rate of $60 million per quarter at closing to a current run rate of $23 million, a 62% decline,” Weed said.
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Sean Buckley
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