Tucows(US:TCX)2020-11-18 00:14Financial Data and Key Metrics Changes - The company expects the contribution from the mobile business in 2021 to exceed that of 2020, with the second half of the year anticipated to be larger than the first half [4] - The third quarter Gain on Sale number included a one-time $3.5 million non-cash write-down, which was netted from the $4.6 million gross Gain on Sale, indicating that this number is not representative of future quarters [10] - The company continues to be comfortable with its 2020 EBITDA guidance of $50 million [11] Business Line Data and Key Metrics Changes - The Mobile Services Enabler business model is expected to have healthy gross margins due to its fixed cost nature, with little variable cost [6] - Other professional services revenue will vary over time due to one-off or special projects, and does not correlate directly to the health of the strategic mobile business [7] - The third quarter contribution of Mobile Services was as expected, with the transition to the MSE model anticipated to be neutral to slightly negative on financial performance for the year [11] Market Data and Key Metrics Changes - The company is expanding its fiber footprint in California, with Culver City being the third town in California and the twelfth in the U.S., bringing 23,000 serviceable addresses [19] - The transition from coax to fiber is expected to be crucial for the company over the next five years, with a $100 million investment made prior to the pandemic [15] Company Strategy and Development Direction - The company is focused on scaling its MSE platform to support DISH and migrating Boost customers, while also looking for opportunities in the global transition from 4G to 5G [21] - The company plans to increase CapEx significantly in 2021 to support growth and is not capital-constrained, but rather focused on scaling the organization [18] - The company aims to provide guidance on the number of homes passed for the Internet business in the next quarter [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in 2021 regarding investor understanding due to the complexity of the transaction but prioritizes cash-generating outcomes [5] - The company is optimistic about the future, stating that 2021 will be a year of focused effort and execution [22] Other Important Information - The company has launched new pricing for Ting Mobile, enhancing its competitive position in the market [12][13] - The company is utilizing microtrenching in Culver City to build faster and with less disruption compared to traditional methods [19] Q&A Session Summary Question: What is the expected impact of the shift to the MSE model on financial performance? - Management expects the impact to be neutral to slightly negative for the year, but remains comfortable with the EBITDA guidance [11] Question: How will the gross margins for various revenue streams be affected? - The mobile business is expected to have stable gross margins due to its fixed cost structure [6] Question: What are the plans for the Ting Internet business? - The company plans to provide guidance on growth and CapEx for the Internet business in the next quarter, with a focus on scaling and deployment [14][18]