Investor presentation 1 08.06.2020 Nasdaq (TCX) | TSX (TC) Safe Harbor Statement information, future events or otherwise. 2 | --- | --- | |-------------------------------------------------------------------------------------------------|-------| | | | | 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 ...

Tucows, Inc. (NASDAQ:TCX) Q2 2020 Earnings Conference Call August 5, 2020 8:00 PM ET Company Participants Monica Webb - Head, Market Development and Strategic Partnerships Elliot Noss - President and Chief Executive Officer Dave Singh - Chief Financial Officer Conference Call Participants Monica Webb Welcome to Tucows’ Second Quarter 2020 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 comp ...

PART I FINANCIAL INFORMATION [Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Tucows Inc.'s unaudited interim consolidated financial statements as of June 30, 2020, and for the three and six-month periods then ended Consolidated Balance Sheet Highlights (in thousands of U.S. dollars) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$442,191** | **$425,918** | | Total Current Assets | $141,634 | $145,675 | | Goodwill | $116,270 | $109,818 | | **Total Liabilities** | **$344,817** | **$331,724** | | Total Current Liabilities | $165,093 | $156,908 | | Loan payable, long-term portion | $113,608 | $113,503 | | **Total Stockholders' Equity** | **$97,374** | **$94,194** | Consolidated Statement of Operations Highlights (in thousands of U.S. dollars) | Metric | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $82,122 | $84,117 | $166,107 | $163,070 | | Gross Profit | $22,966 | $24,507 | $48,116 | $47,158 | | Income from Operations | $1,537 | $5,749 | $6,709 | $10,777 | | Net Income | $157 | $2,616 | $2,991 | $5,415 | Consolidated Statement of Cash Flows Highlights (in thousands of U.S. dollars) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $23,012 | $15,970 | | Net cash used in investing activities | ($30,932) | ($51,401) | | Net cash (used in) provided by financing activities | ($3,614) | $34,797 | | **Net (decrease) in cash and cash equivalents** | **($11,534)** | **($634)** | [Note 4: Acquisitions](index=9&type=section&id=Note%204.%20Acquisitions) On January 1, 2020, the company acquired Cedar Holdings Group, a fiber Internet provider, for a net purchase consideration of $13.9 million, adding $6.5 million in goodwill Cedar Acquisition Purchase Price Allocation (in thousands of U.S. dollars) | Component | Amount | | :--- | :--- | | Cash Consideration | $8,836 | | Share-based payment | $2,000 | | Fair value of contingent payments | $3,072 | | **Total estimated purchase price** | **$13,908** | | Total net assets assumed | $7,456 | | **Total goodwill** | **$6,452** | - The acquisition of Cedar contributed **$2.4 million** in revenue and a net loss of **$0.2 million** for the six months ended June 30, 2020[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 6: Goodwill and Other Intangible Assets](index=14&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangible%20Assets) As of June 30, 2020, Goodwill stood at $116.3 million, with 93% allocated to Domain Services, and a $1.4 million impairment loss was recorded for Roam Mobility customer relationships - Goodwill balance was **$116.3 million** as of June 30, 2020, up from **$109.8 million** at year-end 2019, with no impairment recognized during the period[47](index=47&type=chunk) - Due to the impact of COVID-19 on the travel industry, the company decided to discontinue its Roam Mobility operations, resulting in a **$1.4 million** impairment loss on associated customer relationships[50](index=50&type=chunk) - In June 2020, the company committed to a plan to sell its Ting Mobile customer base, reclassifying mobile customer relationships valued at **$2.6 million** as assets held-for-sale[51](index=51&type=chunk) [Note 9: Assets and liabilities held-for-sale](index=19&type=section&id=Note%209.%20Assets%20and%20liabilities%20held-for-sale) In June 2020, the company reclassified $9.0 million in assets and $0.8 million in liabilities as held-for-sale due to the planned sale of its Ting Mobile customer base, which was completed on August 1, 2020 Assets and Liabilities Held-for-Sale as of June 30, 2020 (in thousands of U.S. dollars) | Category | Amount | | :--- | :--- | | **Assets held for sale** | **$9,027** | | Accounts receivable | $4,554 | | Customer relationship intangible assets (net) | $2,581 | | Other assets | $1,892 | | **Liabilities held for sale** | **$751** | - No impairment loss was recorded as a result of classifying these assets as held-for-sale[75](index=75&type=chunk) [Note 11: Revenue](index=20&type=section&id=Note%2011.%20Revenue) The company generates revenue from Network Access Services and Domain Services, with total revenue of $166.1 million for the six months ended June 30, 2020 Disaggregation of Revenue (in thousands of U.S. dollars) | Revenue Stream | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | **Network Access Services** | **$21,981** | **$23,630** | **$46,437** | **$46,882** | | Mobile Services | $17,567 | $20,986 | $37,715 | $41,795 | | Other Services (Fiber) | $4,414 | $2,644 | $8,722 | $5,087 | | **Domain Services** | **$60,141** | **$60,487** | **$119,670** | **$116,188** | | Wholesale | $51,240 | $51,260 | $101,910 | $98,035 | | Retail | $8,567 | $8,783 | $17,017 | $17,425 | | Portfolio | $334 | $444 | $743 | $728 | | **Total Net Revenues** | **$82,122** | **$84,117** | **$166,107** | **$163,070** | [Note 14: Segment Reporting](index=26&type=section&id=Note%2014.%20Segment%20Reporting) The company operates in Network Access Services and Domain Services segments, generating $48.1 million in consolidated gross profit on $166.1 million in revenue for the six months ended June 30, 2020 Segment Performance - Six Months Ended June 30, 2020 (in thousands of U.S. dollars) | Segment | Net Revenues | Gross Profit | | :--- | :--- | :--- | | Network Access Services | $46,437 | $16,825 | | Domain Services | $119,670 | $31,291 | | **Consolidated Total** | **$166,107** | **$48,116** | Segment Performance - Six Months Ended June 30, 2019 (in thousands of U.S. dollars) | Segment | Net Revenues | Gross Profit | | :--- | :--- | :--- | | Network Access Services | $46,882 | $19,138 | | Domain Services | $116,188 | $28,020 | | **Consolidated Total** | **$163,070** | **$47,158** | [Note 19: Subsequent Events](index=34&type=section&id=Note%2019.%20Subsequent%20Events) On August 1, 2020, Tucows sold its Ting Mobile customer accounts to DISH Wireless L.L.C., including a 10-year payment stream and a concurrent Mobile Service Enabler agreement - On August 1, 2020, Tucows sold its Ting Mobile customer accounts to DISH Wireless L.L.C[132](index=132&type=chunk) - The purchase price includes a working capital payment and a **10-year payment stream** based on net revenue from the transferred customer accounts[134](index=134&type=chunk) - Tucows entered into a services agreement to act as a mobile service enabler (MSE) for DISH, retaining the technology platforms and intellectual property necessary for these services[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a 2% increase in H1 2020 revenue to **$166.1 million**, driven by Domain Services and Fiber growth, offset by Mobile Services declines due to COVID-19, with Adjusted EBITDA increasing **19%** to **$24.9 million** [Overview & Key Business Metrics](index=37&type=section&id=Overview%20%26%20Key%20Business%20Metrics) The company operates Network Access Services and Domain Services segments, with Ting Mobile managing 257,000 subscribers and Ting Internet growing to 13,000 accounts as of June 30, 2020 Ting Mobile Metrics (in '000s) | Metric | June 30, 2020 | June 30, 2019 | | :--- | :--- | :--- | | Accounts under management | 150 | 157 | | Subscribers under management | 257 | 280 | Ting Internet Metrics (in '000s) | Metric | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | Accounts under management | 13 | 9 | | Serviceable addresses | 49 | 34 | Domain Services Metrics (in '000s) | Metric | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Total new, renewed & transferred-in registrations | 9,503 | 8,939 | | Total domains under management (at June 30) | 24,592 | 25,010 | [COVID-19 Response and Impact](index=41&type=section&id=COVID-19%20Response%20and%20Impact) The COVID-19 pandemic significantly impacted the Network Access segment, leading to the shutdown of Roam Mobility with a **$1.43 million** impairment charge, while Domain Services experienced growth - The company shut down its Roam Mobility brands effective June 30, 2020, due to a lack of demand caused by the halt in business and leisure travel, leading to a **$1.43 million** impairment charge[183](index=183&type=chunk)[191](index=191&type=chunk) - Ting Mobile experienced a moderate drop in data usage and increased churn from low-margin business accounts as customers worked from home and businesses halted operations[190](index=190&type=chunk) - The Domain Services segment saw growth, with total domains under management in the OpenSRS brand increasing by **807,000** since March 31, 2020, as more businesses established an online presence[193](index=193&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Net revenues decreased 2% YoY to $82.1 million in Q2 2020, while H1 2020 revenues increased 2% to $166.1 million, with Adjusted EBITDA for Q2 2020 rising 6% to $12.2 million Net Revenue Change Analysis (Q2 2020 vs Q2 2019) | Category | Change (in millions) | Reason | | :--- | :--- | :--- | | Mobile Services | ($3.4) | Reduced subscribers and usage (COVID-19) | | Fiber (Other Services) | $1.8 | Acquisition of Cedar and organic growth | | Domain Services | ($0.3) | Decline in some brands offset by growth in others | | **Total Net Revenue** | **($2.0)** | | - Cost of revenues for Q2 2020 included a **$1.5 million** impairment charge related to Ting TV, a product under development for Ting Fiber that was discontinued[245](index=245&type=chunk)[260](index=260&type=chunk) - Amortization of intangible assets increased in H1 2020 by **$1.3 million**, primarily due to the acquisitions of Ascio, Cedar, and FreedomPop customer relationships[280](index=280&type=chunk) - An impairment of definite life intangible assets of **$1.4 million** was recorded in Q2 2020 due to the write-off of Roam Mobility customer relationships upon the shutdown of the business[281](index=281&type=chunk) [Adjusted EBITDA](index=57&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2020 increased by 6% to $12.2 million, and for H1 2020, it grew 19% to $24.9 million, driven by Ting Fiber and Ascio acquisition synergies Reconciliation of Net Income to Adjusted EBITDA (in thousands of U.S. dollars) | Line Item | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Net income | $157 | $2,616 | $2,991 | $5,415 | | Depreciation & Amortization | $7,510 | $4,737 | $13,707 | $8,702 | | Impairment of definite life intangible assets | $1,431 | - | $1,431 | - | | Interest expense, net | $846 | $1,314 | $1,996 | $2,286 | | Provision for income taxes | $449 | $1,819 | $1,550 | $3,076 | | Stock-based compensation | $847 | $685 | $1,648 | $1,210 | | Other adjustments | $850 | $315 | $1,263 | $228 | | **Adjusted EBITDA** | **$12,175** | **$11,486** | **$24,856** | **$20,917** | [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2020, the company's cash balance was $8.9 million, a decrease of $11.5 million from year-end 2019, primarily due to capital expenditures and acquisitions, partially offset by operating cash flow - Cash from operating activities for H1 2020 was **$23.0 million**, a **44%** increase from H1 2019[310](index=310&type=chunk) - Investing activities used **$30.9 million** in H1 2020, including **$22.1 million** for property and equipment and **$8.8 million** for the Cedar acquisition[313](index=313&type=chunk) - The company has an outstanding balance of **$114.4 million** on its Amended 2019 Credit Facility as of June 30, 2020[329](index=329&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency and interest rate risks, which it mitigates using foreign exchange forward contracts and an interest rate swap with a notional value of $70 million - The company uses foreign exchange forward contracts to hedge its Canadian dollar expense exposure, holding contracts with a notional amount of **$52.1 million** as of June 30, 2020[322](index=322&type=chunk)[323](index=323&type=chunk) - To manage interest rate risk on its credit facility, the company entered into a pay-fixed, receive-variable interest rate swap with a notional value of **$70 million**[320](index=320&type=chunk) - A sensitivity analysis indicated that a hypothetical **10%** adverse movement in the USD/CAD exchange rate would decrease net income by approximately **$1.0 million** for the quarter, before hedging effects[326](index=326&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2020, excluding the recently acquired Cedar, with no material changes to internal controls during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2020[330](index=330&type=chunk) - The assessment of disclosure controls excluded Cedar, which was acquired in Q1 2020[330](index=330&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[332](index=332&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims and lawsuits arising from the normal course of business, none of which are expected to have a material adverse effect - The company is involved in various investigations, claims, and lawsuits from normal business operations, none of which are expected to be individually or in the aggregate materially harmful[333](index=333&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, focusing on the adverse impacts of the COVID-19 pandemic and risks associated with the recent asset sale to DISH, including contingent consideration and brand sharing - The COVID-19 pandemic has adversely impacted business, leading to the shutdown of the Roam Mobility brand and reduced customer usage and increased churn for Ting Mobile[336](index=336&type=chunk) - **Contingent Consideration Risk:** The **10-year payment stream** from DISH is dependent on the revenue generated by transferred subscribers, which could be diminished by churn or lower profitability under DISH's control[339](index=339&type=chunk) - **Brand Sharing Risk:** Sharing the 'Ting' brand with DISH for mobile services while Tucows uses it for fiber could cause consumer confusion and reputational damage to the Ting Fiber business[340](index=340&type=chunk) - **MNO Commitment Risk:** Tucows retains an MNO contract not assigned to DISH and must meet its minimum revenue commitments, which may be challenging without a direct relationship with subscribers[341](index=341&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Under its $40 million stock buyback program, the company repurchased 3,500 shares for $0.2 million during Q2 2020, with approximately $36.7 million remaining available Share Repurchase Activity (Q2 2020) | Period | Total Shares Repurchased | Average Price Paid per share | Dollar value of shares that may yet be purchased | | :--- | :--- | :--- | :--- | | April 2020 | 3,500 | $46.87 | $36,719,000 | | May 2020 | - | - | $36,719,000 | | June 2020 | - | - | $36,719,000 | [Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None [Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=64&type=section&id=Item%205.%20Other%20Information) None [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including articles of incorporation, bylaws, and various certifications required by the SEC, as well as XBRL data files

Investor presentation 05.07.2020 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 ...

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]

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

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 ...

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 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, 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 ...