Cogent Communications Faces Class Action Over Alleged Revenue Missteps

The complaint, filed by Hagens Berman Sobol Shapiro LLP, centers on the assertion that Cogent misrepresented customer demand for its wavelength services. While management previously positioned the backlog as a reliable indicator of future growth, the lawsuit alleges this metric was essentially illusory. According to the filing, a significant portion of the backlog consisted of customers who were either unable or unwilling to accept delivery of services, even when Cogent had the capacity to provision them.

Signs of instability within the company's reporting emerged throughout 2025. In February of that year, Cogent disclosed a 20% sequential decline in its backlog and admitted to purging 1,500 stale orders. Subsequent quarters brought further disclosures of missed expectations and shrinking installation windows, culminating in the company’s abrupt decision to stop publishing backlog data altogether in February 2026. By May 2026, management acknowledged that customers were frequently delaying or rejecting service installations, despite an increase in the company's provisioning efforts.

Reed Kathrein, the Hagens Berman partner heading the investigation, stated that the firm is scrutinizing whether management intentionally promoted these figures to inflate the company's perceived value. Investors seeking to serve as lead plaintiffs must submit their filings by September 21, 2026. The firm is also soliciting information from potential whistleblowers who may provide non-public details regarding these disclosures.