Core Insights - Tucows Inc. (TCX) shares increased by 12.7% following the second-quarter 2025 results, outperforming the S&P 500 index's 0.7% growth, but experienced an 8.4% decline over the past month while the S&P 500 rose by 2.3% [1] Financial Performance - Net revenues for Q2 2025 rose by 10% to $98.5 million from $89.4 million in Q2 2024, with gross profit increasing by 6% to $22.1 million from $20.8 million, driven by margin expansion in Wavelo Platform and Tucows Domains segments [2] - The net loss narrowed to $15.6 million, or $1.41 per share, from $18.6 million, or $1.70 per share, a year earlier, while adjusted EPS improved to a loss of $1.47 from a loss of $1.63 [3] - Adjusted EBITDA surged by 37% to $12.6 million from $9.2 million, reflecting broad-based revenue growth and cost discipline [3] Segment Performance - Ting Internet Services saw revenues increase by 12% year over year to $16.4 million, with an 8% rise in subscribers to 52,100, and adjusted EBITDA loss narrowed to $0.6 million from $6.4 million [4] - Wavelo Platform Services achieved a 20.5% revenue increase year over year to $12.7 million, with adjusted EBITDA climbing 37% to $5.4 million [5] - Tucows Domains revenues rose by 8% year over year to $67.6 million, with adjusted EBITDA increasing by 12% to $12.5 million, despite a 2% decline in domains under management [6] Management Insights - CEO Elliot Noss noted progress towards the $47 million full-year adjusted EBITDA target, emphasizing operational transformation in Ting Internet and disciplined growth in Wavelo Platform [7] - The shift towards partner infrastructure in Ting Internet markets is seen as a strategic move to enhance capital efficiency while maintaining ISP relationships [7] Operational Factors - The quarter's performance benefited from strong revenue contributions across all segments, with notable margin expansion in Wavelo Platform and Tucows Domains, alongside cost discipline and AI-driven efficiency gains [8] - A one-time lease accounting adjustment at Ting Internet temporarily reduced its gross margin by $2.7 million [8] Future Guidance - Tucows reiterated confidence in achieving its 2025 adjusted EBITDA guidance of $47 million, supported by ongoing operational improvements and targeted marketing initiatives [9][10] Strategic Developments - In Q2, Ting Internet sold non-strategic fiber network assets for over $15 million, aligning with the strategy to transition to a pure-play ISP and reallocating capital towards higher-return opportunities [11]

Tucows (TCX) Q2 2025 Earnings Call August 07, 2025 05:05 PM ET Speaker0Welcome to Tucows' Second Quarter twenty twenty five Management Commentary. We have pre recorded prepared remarks regarding the quarter and outlook for the company. A Tucows generated transcript of these remarks with relevant links is also available on the company's website. We will begin with opening remarks from Elliot Noss, President and CEO of Tucows and Ting. Followed by business remarks from David Warwick, CEO of Tucows Domains.Jus ...

Core Insights - Tucows Inc. reported a 10.1% increase in consolidated net revenue for Q2 2025, reaching $98.5 million compared to $89.4 million in Q2 2024, driven by strong performance across all business segments [3][8] - The company achieved a 6.2% increase in gross profit, totaling $22.1 million, attributed to margin gains from Wavelo and Tucows Domains, despite a decrease in gross margin from Ting due to a one-time lease adjustment [4][8] - Adjusted EBITDA grew by 37% to $12.6 million, reflecting improved operational efficiency and revenue growth across all segments [6][8] Financial Performance - Net loss for Q2 2025 decreased to $15.6 million, or $1.41 per share, compared to a net loss of $18.6 million, or $1.70 per share, in Q2 2024, indicating improved operational efficiency [5][8] - Adjusted net loss for Q2 2025 was $16.3 million, or $1.47 per share, compared to an adjusted net loss of $17.8 million, or $1.63 per share, in Q2 2024 [5][8] - Cash and cash equivalents at the end of Q2 2025 were $68.6 million, up from $55.0 million at the end of Q1 2025 and $52.2 million at the end of Q2 2024 [7][8] Business Segment Performance - Ting Internet Services generated revenue of $16.4 million, up from $14.6 million in Q2 2024, with gross profit decreasing due to a one-time lease expense [9][10] - Wavelo Platform Services reported revenue of $12.7 million, an increase from $10.5 million in Q2 2024, with gross profit also rising [10] - Tucows Domain Services achieved revenue of $67.6 million, compared to $62.4 million in Q2 2024, with gross profit increasing to $21.6 million [10]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, along with detailed notes on accounting policies and key financial data Condensed Consolidated Statements of Operations Highlights | Indicator | Q2 2025 (in millions) | Q2 2024 (in millions) | H1 2025 (in millions) | H1 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $98.5 | $89.4 | $193.1 | $176.9 | | **Gross Profit** | $22.1 | $20.8 | $45.6 | $39.1 | | **Loss from Operations** | $(2.9) | $(8.6) | $(4.9) | $(25.1) | | **Net Loss** | $(15.6) | $(18.6) | $(30.8) | $(45.1) | | **Basic and Diluted Loss per Share** | $(1.41) | $(1.70) | $(2.79) | $(4.12) | Condensed Consolidated Balance Sheet Highlights | Indicator | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | $211.7 | $205.4 | | **Total Assets** | $742.2 | $758.8 | | **Total Current Liabilities** | $200.6 | $199.9 | | **Total Liabilities** | $863.9 | $854.1 | | **Total Stockholders' Deficit** | $(121.7) | $(95.3) | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Indicator | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $(4.7) | $(10.4) | | **Net cash provided by (used in) financing activities** | $(2.5) | $(12.0) | | **Net cash provided by (used in) investing activities** | $2.5 | $(30.4) | | **Increase (decrease) in cash and cash equivalents** | $(4.6) | $(52.8) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the company's accounting policies, segment information, debt, revenue recognition, and other significant financial disclosures - The company operates through three main businesses: Ting (high-speed internet), Wavelo (platform services for Communication Service Providers), and Tucows Domains Services (domain name registration and related services)[17](index=17&type=chunk) - Effective Q1 2025, the company updated the format of its financial statements to condense certain line items for improved clarity, with no impact on previously reported financial results[20](index=20&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - As of June 30, 2025, the company held foreign exchange forward contracts with a notional amount of **$55.6 million** to hedge against fluctuations in the Canadian dollar[33](index=33&type=chunk) - Goodwill remained unchanged at **$130.4 million**, with **83%** allocated to Tucows Domains and **17%** to the Ting segment. No impairment was recognized[38](index=38&type=chunk)[39](index=39&type=chunk) - The company was in compliance with all financial covenants for its **$240 million** 2023 Credit Facility, which had an outstanding principal of **$192.9 million** as of June 30, 2025[44](index=44&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Ting's securitized notes payable totaled **$289.6 million** as of June 30, 2025, secured by fiber-network assets and customer contracts[58](index=58&type=chunk) - For H1 2025, the company recorded an income tax expense of **$4.4 million** on a pre-tax loss of **$26.3 million**. The effective tax rate differs from the statutory rate primarily due to a valuation allowance on net operating losses and the impact of foreign earnings[64](index=64&type=chunk) - In H1 2025, one customer in the Wavelo segment accounted for **12%** of total revenue (**$23.1 million**) and represented **56%** of accounts receivable at period end[87](index=87&type=chunk)[88](index=88&type=chunk) - Ting's redeemable preferred units, classified as a liability, had a balance of **$122.2 million** as of June 30, 2025. Ting accrued the **$4.6 million** preferred return for Q2 2025 instead of paying in cash[156](index=156&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - In Q2 2025, the company sold property and equipment for **$11.0 million**, recognizing a gain of **$2.1 million**[167](index=167&type=chunk) - Subsequent to the quarter end, on July 1, 2025, the company sold certain Ting assets for **$7.0 million** and expects to recognize a gain of **$3.6 million** in Q3 2025[183](index=183&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, segment results, and liquidity, highlighting revenue growth, Adjusted EBITDA improvement, and Ting's need for additional financing [Results of Operations](index=55&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, cost of revenues, and operating expenses across its business segments, detailing key drivers of financial performance Net Revenue by Segment (Six Months Ended June 30) | Segment | 2025 (in millions) | 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Ting | $32.7 | $28.7 | +14% | | Wavelo | $24.1 | $19.9 | +21% | | Tucows Domains | $132.9 | $124.3 | +7% | | Corporate and other | $3.4 | $4.1 | -15% | | **Total Net Revenues** | **$193.1** | **$176.9** | **+9%** | - Total net revenues for H1 2025 increased by **$16.2 million** (**9%**) year-over-year, driven by growth across all segments, particularly Wavelo (up **21%**) and Ting (up **14%**)[240](index=240&type=chunk) - Total cost of revenues for H1 2025 increased by **$9.6 million** (**7%**) year-over-year, primarily due to a one-time **$3.0 million** lease accounting adjustment in the Ting segment and higher registry costs for Tucows Domains[272](index=272&type=chunk) - Sales and marketing expenses for H1 2025 decreased significantly by **$10.4 million** (**31%**) year-over-year, mainly due to reduced personnel costs and marketing spend in the Ting segment following the 2024 Capital Efficiency Plan[291](index=291&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (Six Months Ended June 30) | Line Item | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | **Net Loss for the period** | **$(30.8)** | **$(45.1)** | | Provision for income taxes | $4.4 | $3.0 | | Depreciation of property and equipment | $21.0 | $20.2 | | Amortization of intangible assets | $2.3 | $2.9 | | Interest expense, net | $27.2 | $24.4 | | Stock-based compensation | $2.9 | $3.6 | | Acquisition and other costs | $0.7 | $3.8 | | Other adjustments | $(1.6) | $0.6 | | **Adjusted EBITDA** | **$26.2** | **$13.4** | - Adjusted EBITDA for H1 2025 increased by **$12.9 million** (**96%**) to **$26.3 million** compared to H1 2024, largely driven by cost reductions and operational efficiencies in the Ting segment[314](index=314&type=chunk) [Liquidity and Capital Resources](index=76&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, funding sources, and ability to meet short-term and long-term financial obligations, particularly for the Ting segment - As of June 30, 2025, cash and cash equivalents decreased by **$4.9 million** since year-end 2024, primarily due to cash used in operations, debt repayment, and capital expenditures, offset by proceeds from asset sales[315](index=315&type=chunk) - The Ting segment may not be able to meet its financial obligations over the next twelve months without additional financing. It has historically relied on its redeemable preferred units and term notes to fund operations and expansion[334](index=334&type=chunk) - Ting has scheduled interest payments of **$35.0 million** in the twelve months following June 30, 2025, and its ability to obtain further financing is subject to market conditions and operating performance[333](index=333&type=chunk)[334](index=334&type=chunk) - Tucows businesses excluding Ting plan to fund their 2025 cash requirements through operating income while making discretionary repayments on the **$192.9 million** outstanding balance of the 2023 Credit Facility[335](index=335&type=chunk)[336](index=336&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include foreign currency exchange fluctuations, interest rate changes on its credit facility, and credit risk from accounts receivable - A hypothetical **10%** adverse movement in foreign currency exchange rates would decrease net income for H1 2025 by approximately **$2.6 million**, before the effects of hedging[343](index=343&type=chunk) - The company is exposed to interest rate risk on its **$192.9 million** outstanding balance under the 2023 Credit Facility. A **1%** adverse change in interest rates would increase annual interest payments by approximately **$1.9 million**[346](index=346&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[347](index=347&type=chunk) [PART II OTHER INFORMATION](index=52&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims arising from normal business operations, none of which are expected to have a material adverse effect [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section updates key risk factors, including Ting's financing needs, operational risks from workforce reductions, and minimum purchase commitments with its MNO partner - A significant risk is that the Ting subsidiary may not be able to meet its financial obligations over the next 12 months without securing additional financing, as it has historically relied on external funding for operations and expansion[354](index=354&type=chunk) - The company faces ongoing risks from the Ting workforce reductions, including potential operational disruptions, negative impacts on employee morale and retention, and a slowdown in network expansion and revenue growth due to reduced capital expenditures[357](index=357&type=chunk)[359](index=359&type=chunk) - The company is subject to minimum purchase commitments with its MNO supplier, with **$13.9 million** in remaining payments through February 2026. Failure to grow the Ting Mobile subscriber base could lead to significant penalties and increase the company's net loss[360](index=360&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board approved a **$40 million** stock buyback program, but no shares were repurchased during the three and six months ended June 30, 2025 [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025

Core Insights - Tucows Inc. has been awarded a contract to provide back-end registry services to Radix, enhancing its position in the domain services industry [1][4] - The partnership will involve Tucows managing Radix's portfolio of 11 top-level domains (TLDs), which includes 10 new generic TLDs and one country-code TLD [2][6] - The migration of Radix domains is expected to add approximately 10 million domains under management (DUMs) to Tucows Registry, bringing the total to nearly 17 million globally [3] Company Overview - Tucows operates in the internet services sector, providing domain services and infrastructure, and manages around 24 million domain names through a global reseller network [7][8] - Tucows Registry has over 20 years of experience in internet infrastructure and is recognized for its scalable registry services [8] - Radix is the world's largest portfolio registry with over 10 million DUMs and operates 10 TLDs, including popular extensions like .online and .store [9][10] Strategic Implications - The partnership positions Tucows as a preferred platform for top-tier registry operators and sets the stage for future growth in the domain name ecosystem, especially with the upcoming new gTLDs expected in 2026 [3][6] - Radix's innovative and data-driven strategies have contributed to its strong market presence and renewal rates, which will complement Tucows' infrastructure capabilities [5][6]

TORONTO, July 24, 2025 /PRNewswire/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC) today announced that it will report its financial results for the second quarter ended June 30, 2025, via news release on Thursday, August 7, 2025 at 5:05 p.m. ET.Concurrent with the dissemination of its quarterly financial results news release at 5:05 p.m. ET on Thursday, August 7, 2025, management's pre-recorded audio commentary and transcript discussing the quarter and outlook for the Company will be posted to the Tucows website at ...

Core Insights - Tucows Inc. (TCX) has outperformed both the industry composite stocks and the S&P 500, gaining 22.6% in the past month compared to a 0.5% decline in the industry and a 4.7% growth in the S&P 500 [1][2] Financial Performance - In Q1 2025, Tucows reported an 8% year-over-year increase in revenues to $94.6 million, with gross profit rising 29% to $23.5 million and adjusted EBITDA increasing 225% to $13.7 million [3] - Despite a net loss of $15.1 million, this represents a significant improvement over the previous year, with all core units contributing to the gains [3] Strategic Initiatives - Tucows has implemented targeted cost reductions and restructured its Ting fiber operations to focus on partnerships, enhancing operational efficiency and profitability [4][6] - The pivot of Ting towards partnerships has improved capital efficiency, allowing the company to preserve capital and enhance unit economics [6] Business Segment Performance - Wavelo is emerging as a high-margin growth engine, gaining traction with large telecom providers globally and focusing on AI-driven efficiencies [7] - Tucows Domains continues to deliver consistent value despite market saturation, with margin growth and steady transaction volume [8] Market Positioning - Tucows benefits from stable, recurring revenue streams, resulting in lower volatility compared to its industry, with a beta of 0.83 [9] - The company is well-positioned to capitalize on favorable industry trends, with the fiber internet and telecom software markets projected to grow 12-15% annually through 2030 [10] Overall Outlook - The stock momentum of Tucows is attributed to foundational progress rather than hype, with a focus on strengthening the balance sheet and aligning growth strategies with macro trends [11]

Core Insights - Tucows Inc. has appointed Laurenz Nienaber as Chair of the Board of Directors and Jeffrey Tory as Independent Vice Chair, following the election of a new board at the Annual General Meeting on May 20, 2025 [1][2] - The newly formed Board has established its committee leadership and governance structure, emphasizing proactive oversight and long-term value creation for shareholders [1][3] Board Composition and Leadership - Laurenz Nienaber, the new Chairman, has extensive experience in investment strategy and corporate governance, while Jeffrey Tory brings nearly four decades of experience in North American growth investing [2] - The Audit Committee is chaired by Allen Taylor, who is recognized as an "audit committee financial expert," ensuring strong financial governance [3] - A newly established Compensation Committee is chaired by Stephan Uhrenbacher, focusing on transparent and performance-aligned executive compensation practices [4] Governance Committees - The Governance and Nominating Committee is chaired by Lee Matheson, who will guide board refreshment and corporate governance practices [5] - The Board structure is designed to foster accountability and ensure strong oversight across all business segments, including Ting Internet, Tucows Domains, and Wavelo [9]

Core Insights - Tucows Inc. elected eight director nominees to its Board of Directors, enhancing its strategic leadership for future growth and innovation [1][2][3] Board Composition - The newly elected Board members possess diverse expertise in finance, technology, data analytics, and entrepreneurship, which is expected to guide Tucows' long-term strategy [2][3] - Key members include: - Marlene Carl, CFO of CHAPTERS Group AG, with experience in investment management and digital infrastructure [2] - Lee Matheson, Partner at EdgePoint Investment Group, with a background in technology and financial services [2] - Elliot Noss, President and CEO of Tucows, bringing extensive experience in internet infrastructure [2] - Dr. Sandra Matz, a leader in data-driven behavioral science from Columbia Business School [2] - Laurenz Malte Nienaber, Founder of LMN Capital GmbH, known for investment strategy and governance [2] - Allen Taylor, President of GTD Partners, with expertise in private equity and financial restructuring [2] - Jeffrey Tory, Chair at Pembroke Management, with nearly four decades in North American growth equities [2] - Stephan Uhrenbacher, a serial entrepreneur with a focus on technology and sustainability [2] Voting Results - The election results for the new directors showed strong support, with percentages of votes for each nominee ranging from 86.18% to 94.47% [3] - The ratification of Deloitte LLP as independent auditors for the year ending December 31, 2025, was also part of the voting agenda [3] Company Overview - Tucows connects people through internet access services, including fiber-optic internet and domain services [4] - The company operates Ting for fixed fiber internet and Wavelo for telecommunications software, managing approximately 24 million domain names [4]

Core Viewpoint - Tucows Inc. reported solid financial performance in Q1 2025, with revenue growth and a significant reduction in net loss, indicating a positive trajectory for the company despite some challenges in specific segments [2][6]. Earnings & Revenue Performance - Q1 2025 revenues reached $94.6 million, an 8.2% increase from $87.5 million in Q1 2024 - Gross profit rose 28.5% year over year to $23.5 million from $18.3 million - Net loss narrowed to $15.1 million ($1.37 per share) from a loss of $26.5 million ($2.42 per share) in the previous year - Adjusted net loss improved to $14.9 million ($1.35 per share) from $23.4 million ($2.14 per share) a year ago - Adjusted EBITDA surged 225% to $13.7 million compared to $4.2 million in the prior-year quarter [2]. Other Key Business Metrics - Ting Internet revenues increased 16% year over year to $16.3 million, driven by a 12% rise in subscribers and growth in average revenue per user (ARPU) - Gross profit for Ting reached $10.5 million, up from $8.7 million a year ago, with adjusted EBITDA loss narrowing to $0.9 million from $9.5 million [3]. - Wavelo recorded revenues of $11.4 million, a 21% year-over-year increase, with gross profit up 25% to $11.3 million and adjusted EBITDA growing 60% to $4.4 million [4]. - Tucows Domains generated revenues of $65.3 million, a 6% increase from Q1 2024, with gross profit improving 9% to $20.2 million and adjusted EBITDA rising 15% to $11.5 million [5]. Management Commentary - CEO Elliot Noss highlighted four consecutive years of revenue growth and ongoing cost optimization efforts, including a $2.5 million payment toward syndicated debt [6]. - The management emphasized the impact of macroeconomic conditions, particularly AI, on business decisions [6]. - CEO of Tucows Domains, Dave Woroch, noted resilience in the domain business and growth opportunities, including partnerships in India [7]. - Wavelo CEO Justin Reilly described the quarter as the best to date for the business unit, attributing gains to improved customer alignment and the role of AI in enhancing productivity [8]. Factors Influencing Headline Numbers - Revenue and profit growth were driven by increased subscriber counts and higher ARPU in the Ting segment, stronger contributions from high-margin services in Domains, and an uptick in Wavelo's contracted platform deals [9]. - Operating efficiencies from the 2024 Ting restructuring initiative contributed to EBITDA expansion across the board [9]. Cost Management - Cost discipline was evident, with sales and marketing expenses falling 41% year over year and general and administrative expenses decreasing 6%, helping to offset higher network depreciation and financing expenses [10]. Future Outlook - Management suggested expectations for adjusted EBITDA growth to moderate to single-digit levels in subsequent quarters, focusing on expanding margins and maintaining strict cost controls [11]. Other Developments - The company confirmed the wind-down of the Ting Build Scorecard, indicating a strategic pivot toward operational efficiency [12]. - Ongoing progress with NIXI in India was highlighted, signaling forward movement in expanding its registry footprint [12].