WASHINGTON -- Cogent Communications Group, Inc. (Nasdaq: CCOI) today announced net service revenue of $40.5 million for the three months ended December 31, 2006, compared with $33.2 million for the three months ended December 31, 2005. On-net revenue was $30.0 million for the three months ended December 31, 2006, an increase of 42.8% over $21.0 million for the three months ended December 31, 2005. On-net service is provided to customers located in buildings that are physically connected to Cogent's network by Cogent-owned facilities.

Off-net revenue was $8.4 million for the three months ended December 31, 2006, a decrease of 12.5% from $9.6 million for the three months ended December 31, 2005. Off-net customers are located in buildings directly connected to Cogent's network using other carriers' facilities to provide the last mile portion of the link from the customers' premises to Cogent's network. Non-core revenue was $2.1 million for the three months ended December 31, 2006, a decrease of 18.7% from $2.6 million for the three months ended December 31, 2005. Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell.

Net service revenue was $149.1 million for the year ended December 31, 2006, compared with $135.2 million for the year ended December 31, 2005. On- net revenue was $105.3 million for the year ended December 31, 2006, an increase of 34.4% over $78.3 million for the year ended December 31, 2005. Off-net revenue was $34.4 million for the year ended December 31, 2006, a decrease of 22.9% from $44.6 million for the year ended December 31, 2005. Non-core revenue was $9.4 million for the year ended December 31, 2006, a decrease of 23.4% from $12.2 million for the year ended December 31, 2005.

Gross profit, excluding equity-based compensation expense, increased 52.2% from $13.3 million for the three months ended December 31, 2005 to $20.2 million for the three months ended December 31, 2006. Gross profit margin, excluding equity-based compensation expense, expanded from 39.9% for the three months ended December 31, 2005 to 49.8% for the three months ended December 31, 2006. Gross profit, excluding equity-based compensation expense, increased 39.6% from $49.4 million for the year ended December 31, 2005 to $69.0 million for the year ended December 31, 2006. Gross profit margin, excluding equity- based compensation expense, expanded from 36.5% for the year ended December 31, 2005 to 46.3% for the year ended December 31, 2006.

Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, was $8.0 million for the three months ended December 31, 2006, an increase of 220.9%, over $2.5 million for the three months ended December 31, 2005. EBITDA, as adjusted, was $22.6 million for the year ended December 31, 2006, an increase of 97.7%, over $11.4 million for the year ended December 31, 2005.

Basic and diluted net loss applicable to common stock was ($0.21) per share for the three months ended December 31, 2006 compared to ($0.47) per share for the three months ended December 31, 2005. Weighted average common shares outstanding -- basic and diluted -- were 48.5 million for the three months ended December 31, 2006 as compared to 43.6 million for the three months ended December 31, 2005. Basic and diluted net loss applicable to common stock was ($1.16) per share for the year ended December 31, 2006 compared to ($1.96) per share for the year ended December 31, 2005. Weighted average common shares outstanding -- basic and diluted -- were 46.3 million for the year ended December 31, 2006 as compared to 34.4 million for the year ended December 31, 2005.

Total customer connections were 12,315 as of December 31, 2006 compared to 9,988 as of December 31, 2005, an increase of 23.3%. On-net customer connections were 7,778 as of December 31, 2006 compared to 4,657 as of December 31, 2005, an increase of 67.0%. Off-net customer connections were 3,528 as of December 31, 2006 compared to 4,027 as of December 31, 2005, a decrease of 12.4%. Non-core customer connections were 1,009 as of December 31, 2006 compared to 1,304 as of December 31, 2005, a decrease of 22.6%.

The number of on-net buildings was 1,107 as of December 31, 2006 as compared to 1,040 as of December 31, 2005.

Cogent Communications Holdings Inc. (Nasdaq: CCOI)