Cogent Communications Faces Class Action Over Alleged Backlog Misstatements

The lawsuit, filed by Hagens Berman Sobol Shapiro LLP, alleges that Cogent misrepresented customer demand by touting an optical wavelength backlog that was largely illusory. According to the complaint, management presented these figures as indicators of future growth, despite knowing that many customers were either unable or unwilling to accept delivery of the services. The class period covers investor activity between February 29, 2024, and May 1, 2026.

Signs of instability within the company's narrative surfaced in February 2025, when Cogent reported a 20% sequential decline in its backlog and admitted to removing 1,500 orders that had remained stagnant for over a year. Subsequent quarterly reports showed further erosion, with management eventually acknowledging that customers were repeatedly delaying or rejecting installations. By February 2026, the company ceased disclosing backlog data entirely—a move that triggered further drops in share price.

Reed Kathrein, the partner leading the investigation, stated that the firm is scrutinizing whether management intentionally promoted these metrics to inflate the company's perceived value. As Cogent works through ongoing operational contractions and declining service revenue, which fell to $235.6 million in the second quarter of 2026, the legal process aims to recover losses for affected shareholders.