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Tucows(TCX) - 2020 Q1 - Earnings Call Transcript
2020-05-07 22:27
Financial Data and Key Metrics Changes - Total revenue increased 6% year-over-year to $84 million, while gross profit increased 11% [19][43] - Net income increased just over 1% year-over-year to over $2.8 million, or $0.27 a share, while adjusted EBITDA increased 34% to $12.7 million [19][55] - Cash flow from operations was $14.1 million, up 57% from the first quarter of last year [20][56] Business Line Data and Key Metrics Changes - Domains business saw total gross margin dollars increase 20% year-over-year, with gross margin dollars for Domain Services increasing 23% [20][21] - Ting Mobile service revenue for Q1 was down 2.9% year-over-year, but gross margin on service revenue was flat versus a year ago [27][28] - Ting Internet showed continued progress with 11,600 Internet subscribers, despite temporary suspension of new installs [36][33] Market Data and Key Metrics Changes - Total wholesale registrations for the first quarter increased 5% year-over-year to 4.3 million, driven mainly by the Ascio acquisition [22] - Renewal rate for the Wholesale channel was 78%, consistent with recent performance and above the industry average [22] - Retail Domains channel saw total registrations up slightly to 421,000, following previous declines [24] Company Strategy and Development Direction - Company is taking a conservative view and planning for current circumstances to persist for the foreseeable future [61][63] - Management is rethinking installation practices, marketing practices, and product offerings, believing changes are more or less permanent [63][64] - The pandemic is seen as an acceleration of existing trends, with a focus on reliability and predictability of earnings [71][72] Management Comments on Operating Environment and Future Outlook - Management acknowledges the uncertainty in the current environment and emphasizes the importance of distinguishing between what can be known and what cannot [62] - The company is optimistic about the resilience of its business model, with all three business lines having strong performance during the pandemic [70][71] - Future growth opportunities are being evaluated, particularly in light of changes in consumer behavior and market dynamics [72][73] Other Important Information - The company has a renewed open market buyback program, allowing for the purchase of up to $40 million of its stock until February 2021 [60] - Deferred revenue at the end of the first quarter was $153 million, up from $149 million at the end of the fourth quarter of last year [58] Summary of Q&A Session Questions and Answers Question: What is the company's outlook regarding the impact of COVID-19 on its operations? - Management indicated that the pandemic has accelerated existing trends and that the company is adapting its practices accordingly [63][64] Question: How is the company managing its workforce and operations during the pandemic? - The company has moved to a distributed workforce model and has been proactive in adjusting installation processes to ensure safety [10][39]
Tucows(TCX) - 2020 Q1 - Quarterly Report
2020-05-07 21:07
PART I FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2020, detailing the company's financial position, performance, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $437.8 million and liabilities to $342.5 million, driven by the Cedar acquisition and increased deferred revenue Consolidated Balance Sheet Highlights (in thousands of U.S. dollars) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$437,840** | **$425,918** | | Cash and cash equivalents | $12,446 | $20,393 | | Property and equipment | $94,289 | $82,121 | | Goodwill | $115,837 | $109,818 | | **Total Liabilities** | **$342,484** | **$331,724** | | Deferred revenue, current portion | $126,152 | $123,101 | | Loan payable, long-term portion | $113,545 | $113,503 | | **Total Stockholders' Equity** | **$95,356** | **$94,194** | [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Net revenues for Q1 2020 increased to $84.0 million, with stable net income of $2.8 million and diluted EPS of $0.26 Q1 2020 Statement of Operations Summary (in thousands of U.S. dollars, except per share data) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net revenues | $83,985 | $78,953 | | Gross profit | $25,150 | $22,651 | | Income from operations | $5,172 | $5,028 | | Net income | $2,834 | $2,799 | | Diluted earnings per common share | $0.26 | $0.26 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to $14.1 million, while investing and financing activities led to a net cash decrease of $7.9 million Q1 2020 Cash Flow Summary (in thousands of U.S. dollars) | Cash Flow Activity | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,073 | $8,991 | | Net cash used in investing activities | ($18,713) | ($38,459) | | Net cash (used in) provided by financing activities | ($3,307) | $27,866 | | **Increase (decrease) in cash** | **($7,947)** | **($1,602)** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key disclosures include the $13.9 million Cedar acquisition, hedging activities, segment performance, and the stock buyback program - On January 1, 2020, the company acquired Cedar Holdings Group, a fiber Internet provider, for a net purchase consideration of **$13.9 million**[29](index=29&type=chunk) - The company uses foreign currency forward contracts to hedge against fluctuations in the Canadian dollar, with a notional amount of **$61.8 million** as of March 31, 2020[38](index=38&type=chunk)[40](index=40&type=chunk) Segment Gross Profit (in thousands of U.S. dollars) | Segment | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Network Access Services | $9,904 | $9,454 | | Domain Services | $15,246 | $13,197 | | **Total Gross Profit** | **$25,150** | **$22,651** | - In Q1 2020, the company repurchased **66,738 shares for $3.1 million** under its $40 million stock buyback program[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 results, including 6% revenue growth, a 35% increase in Adjusted EBITDA, and the impacts of COVID-19 [Overview and Key Business Metrics](index=32&type=section&id=Overview%20and%20Key%20Business%20Metrics) Key metrics show growth in Ting Internet accounts, a decline in Ting Mobile subscribers, and a decrease in total domains under management Key Operating Metrics | Metric | March 31, 2020 | March 31, 2019 | | :--- | :--- | :--- | | Ting mobile accounts under management (in '000s) | 154 | 160 | | Ting mobile subscribers under management (in '000s) | 272 | 284 | | Ting Internet accounts under management (in '000s) | 12 | 8 | | Ting Internet serviceable addresses (in '000s) | 45 | 32 | | Total domain names under management (in '000s) | 23,895 | 25,207 | [COVID-19 Response and Impact](index=38&type=section&id=COVID-19%20Response%20and%20Impact) The company details its operational response to COVID-19 and the varied financial impacts across its business segments - The company transitioned to a remote work model and is providing uninterrupted services across its brands[151](index=151&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Roam Mobility, which relies on global travel, saw **revenues trend toward zero**, accounting for the majority of the negative financial impact from COVID-19[165](index=165&type=chunk) - Ting Fiber **paused in-home installations**, which slowed new customer acquisition, though existing recurring revenue remains stable[166](index=166&type=chunk) - The Domain Services segment has **not experienced any significant financial or operational impacts** related to COVID-19[167](index=167&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Q1 2020 net revenues increased 6% to $84.0 million, driven by acquisitions, leading to a 35% rise in Adjusted EBITDA to $12.7 million Net Revenues by Source (in thousands of U.S. dollars) | Revenue Source | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | **Total Network Access Services** | **$24,456** | **$23,252** | | Mobile Services | $20,148 | $20,809 | | Other Services (Ting Internet) | $4,308 | $2,443 | | **Total Domain Services** | **$59,529** | **$55,701** | | Wholesale | $50,671 | $46,775 | | Retail | $8,449 | $8,642 | | **Total Net Revenues** | **$83,985** | **$78,953** | - The **6% increase in total net revenue** was primarily driven by $4.6 million from the prior year acquisition of Ascio and a $1.9 million increase in fiber access revenues[190](index=190&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands of U.S. dollars) | Line Item | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net income for the period | $2,834 | $2,799 | | Depreciation & Amortization | $6,291 | $3,965 | | Interest expense, net | $1,150 | $972 | | Provision for income taxes | $1,101 | $1,257 | | Stock-based compensation | $801 | $525 | | Other adjustments | $504 | $113 | | **Adjusted EBITDA** | **$12,681** | **$9,431** | [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased by $8.0 million to $12.4 million due to acquisitions and capex, supported by a $240 million credit facility - Cash and cash equivalents **decreased by $8.0 million** during the quarter to $12.4 million[249](index=249&type=chunk) - Key uses of cash included **$9.9 million for property and equipment**, **$8.8 million for the Cedar acquisition**, and **$3.1 million for stock repurchases**[249](index=249&type=chunk)[260](index=260&type=chunk) - The company has an Amended 2019 Credit Facility of up to **$240 million**, with **$114.4 million drawn** as of March 31, 2020[250](index=250&type=chunk)[272](index=272&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, managed by forward contracts, and interest rate changes on its credit facility - The company's primary market risk is **foreign currency exposure**, as revenues are in USD and a major portion of expenses are in CAD, managed with forward contracts[266](index=266&type=chunk)[267](index=267&type=chunk) Outstanding Foreign Exchange Forward Contracts (as of March 31, 2020) | Maturity Date | Notional Amount (USD thousands) | Weighted Avg. Exchange Rate | | :--- | :--- | :--- | | April - June 2020 | $9,653 | 1.3296 | | July - September 2020 | $10,656 | 1.3227 | | October - December 2020 | $9,658 | 1.3227 | | January - September 2021 | $31,784 | ~1.4318 | | **Total** | **$61,751** | **1.3795** | - The company is exposed to interest rate risk on its **$114.4 million outstanding balance**; a 1% adverse change would increase annual interest payments by approximately **$1.1 million**[271](index=271&type=chunk)[272](index=272&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, excluding the recently acquired Cedar business - The CEO and CFO concluded that **disclosure controls and procedures were effective** as of March 31, 2020[273](index=273&type=chunk) - The evaluation of controls **excluded Cedar**, which was acquired during the first quarter of 2020[273](index=273&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending legal proceedings expected to have a material adverse effect on the business - The company reports **no legal proceedings** that are expected to materially harm the business[277](index=277&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) Risk factors are updated to include the adverse impacts of the COVID-19 pandemic on the company's operations and specific business lines - A new risk factor has been added concerning the **adverse impact of health epidemics**, such as the COVID-19 pandemic[279](index=279&type=chunk) - Specific business impacts from COVID-19 are highlighted as risks, including **Roam Mobility revenues trending to zero** and a **slowdown in Ting Fiber installations**[280](index=280&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 66,738 shares for $3.1 million under a new $40 million stock buyback program Share Repurchases in Q1 2020 | Period | Total Shares Repurchased | Average Price Paid per share | | :--- | :--- | :--- | | January 2020 | - | - | | February 2020 | - | - | | March 2020 | 66,738 | $46.71 | - A new **$40 million stock buyback program** was approved on February 12, 2020, set to terminate on February 12, 2021[283](index=283&type=chunk) [Item 3. Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None[284](index=284&type=chunk) [Item 4. Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's business - Not applicable[285](index=285&type=chunk) [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) The company did not report any other material information - None[286](index=286&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q
Tucows(TCX) - 2019 Q4 - Annual Report
2020-03-04 21:02
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-32600 Tucows Inc. (Exact Name of Registrant ...
Tucows(TCX) - 2019 Q4 - Earnings Call Presentation
2020-02-13 18:48
Investor presentation 02.12.2020 Nasdaq (TCX) | TSX (TC) Safe Harbor Statement information, future events or otherwise. | --- | --- | |-------------------------------------------------------------------------------------------------|-------| | | | | This presentation may contain forward-looking statements, relating to the Company's | | | operations or to the environment in which it operates, which are based on Tucows Inc.'s | | | operations, estimates, forecasts and projections. These statements are not gua ...
Tucows(TCX) - 2019 Q4 - Earnings Call Transcript
2020-02-13 01:25
Tucows Inc. (NASDAQ:TCX) Q4 2019 Results Earnings Conference Call February 12, 2020 5:00 PM ET Company Participants Monica Webb - Director-Market Development & Government Affairs Elliot Noss - President and Chief Executive Officer Dave Singh - Chief Financial Officer Conference Call Participants Operator Welcome to Tucows' Fourth Quarter 2019 Management Commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the Company. A transcript of these remarks is also available on the ...
Tucows(TCX) - 2019 Q3 - Earnings Call Transcript
2019-11-08 21:24
Tucows, Inc. (NASDAQ:TCX) Q3 2019 Earnings Conference Call November 6, 2019 5:05 PM ET Company Participants Monica Webb – Director-Market Development & Government Affairs Elliot Noss – President and Chief Executive Officer Dave Singh – Chief Financial Officer Conference Call Participants Monica Webb Welcome to Tucows' Third Quarter 2019 Management Commentary. We've pre-recorded prepared remarks, regarding the quarter and outlook for the Company. A transcript of these remarks is also available on the Company ...
Tucows(TCX) - 2019 Q3 - Quarterly Report
2019-11-06 22:09
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | | Trading | | | --- | --- | --- | | Title of each class | Symbol(s) | Name of each exchange on which registered | | Common Stock | TCX | NASDAQ ...
Tucows(TCX) - 2019 Q2 - Earnings Call Presentation
2019-08-08 05:08
Investor Presentation elliot noss | president + ceo August 2019 1 This presentation may contain forward-looking statements, relating to the Company's operations or to the environment in which it operates, which are based on Tucows Inc.'s operations, estimates, forecasts and projections. These statements are not guarantees of future performance and are subject to important risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate or differ materially from ac ...
Tucows(TCX) - 2019 Q2 - Earnings Call Transcript
2019-08-08 03:03
Tucows Inc. (NASDAQ:TCX) Q2 2019 Results Earnings Conference Call August 7, 2019 8:00 AM ET Company Participants Monica Webb - Director, Market Development & Government Affairs, Ting Elliot Noss - CEO Dave Singh - CFO Conference Call Participants Operator Welcome to Tucows’ second quarter 2019 management commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the Company. A transcript of these remarks is also available on the Company’s website. In lieu of a live question-and- ...
Tucows(TCX) - 2019 Q2 - Quarterly Report
2019-08-07 21:09
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-32600 TUCOWS INC. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of (I.R.S. Employer Inco ...