Tucows(TCX)2024-11-09 18:10Financial Data and Key Metrics - Consolidated revenue for Q3 2024 increased 6.1% YoY to 64.7 million, with gross margin up 7.8% to 15.3 million, with gross margin up 38% to 10.1 million, with gross margin down 4.6% to 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 55 million, with value-added services gross margin up 26% YoY [13] - Retail channel revenue for Domains grew 5% 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 75.2 million in cash and cash equivalents at the end of Q3 2024, with 12 million in Q2 to 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]