Tucows(TCX)2024-11-09 18:10Financial Data and Key Metrics - Consolidated revenue for Q3 2024 increased 6.1% YoY to $92.3 million, driven by growth in Ting and Domains businesses [30] - Tucows Domains revenue grew 5.9% YoY to $64.7 million, with gross margin up 7.8% to $19.8 million [30][34] - Ting revenue increased 19% YoY to $15.3 million, with gross margin up 38% to $11 million [31][34] - Wavelo revenue decreased 9% YoY to $10.1 million, with gross margin down 4.6% to $10 million [31][35] - Adjusted EBITDA for Q3 2024 was $8.7 million, up 94% YoY, driven by profitability improvements in Ting and Domains [37] Business Line Performance - Tucows Domains delivered its seventh consecutive quarter of revenue growth, with domain services revenue up 6% YoY to $64.7 million [11][12] - Wholesale channel revenue for Domains increased 6% YoY to $55 million, with value-added services gross margin up 26% YoY [13] - Retail channel revenue for Domains grew 5% YoY to $9.7 million, with gross margin up 8% YoY [14] - Wavelo's revenue decreased 9% YoY to $10.1 million, primarily due to churn from DISH's Boost subscribers [17][31] - Ting added 1,400 net new subscribers in Q3, growing 21% YoY to nearly 50,000 subscribers [26] Market and Strategic Focus - Ting has shifted focus from market expansion to improving penetration, churn, and ARPU, with plans to stop all new market expansions [7][29] - Ting expects to reach adjusted EBITDA breakeven in 2025, with significant growth in adjusted EBITDA for Tucows overall [9] - Wavelo is focusing on larger telecom prospects, with sales cycles targeting MNOs, MVNOs, and ISPs with complex systems [22] - Tucows Domains continues to invest in platform and infrastructure development, with registry services being a key midterm opportunity [15] Management Commentary on Industry and Outlook - The fiber mid-market has seen little to no common equity transactions in the past year, making it challenging for Ting to secure long-term equity partners [7] - Telecom is entering an era of compounding inefficiency due to convergence, consolidation, and shifting customer needs, creating opportunities for Wavelo's platform [23] - Ting's fiber business is seen as a long-term value driver, with a focus on loading existing footprints and improving operational KPIs [44][45] - The company expects a dynamic environment for small fiber ISPs in 2025, with Ting positioned to benefit from its operational focus [47] Other Important Information - Tucows laid off over 40% of the Ting workforce, reducing cash operating expenses by $22 million, primarily in people costs [6] - The company had $75.2 million in cash and cash equivalents at the end of Q3 2024, with $15.9 million classified as restricted cash [39] - Ting's CapEx spend decreased from $12 million in Q2 to $8.2 million in Q3, with future CapEx expected to be near exclusively success-based [28] - The company repaid $2.5 million on its syndicated loan in Q3, with a leverage ratio of 3.9x [41] Q&A Summary - No live Q&A session was conducted during the call. Shareholders and analysts were invited to submit questions via email, with responses to be posted on the company's website by November 26 [2][49]