Tucows(TCX) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Consolidated revenue for Q4 2025 was $98.7 million, up 6% year-over-year, with all three segments contributing [10] - Q4 gross profit was $24.1 million, up 14% year-over-year, supported by a favorable mix [10] - Adjusted EBITDA for Q4 was $11.1 million, down 14% year-over-year, while total consolidated adjusted EBITDA for fiscal 2025 was $50.6 million, which was $3.6 million above guidance and represents a 45% increase from fiscal 2024 [11][12] Business Segment Data and Key Metrics Changes - Tucows Domains revenue grew to $66.4 million in Q4 2025 from $65.7 million, with a 4% increase in gross profit to $19.2 million [13] - Wavelo's Q4 revenue was $11.7 million, a 19% increase year-over-year, with adjusted EBITDA of $3.4 million [14][16] - Ting Internet reported Q4 revenue of $18.5 million, up 18% year-over-year, with an adjusted EBITDA loss of $0.9 million, an improvement from a $1.5 million loss in Q4 2024 [16] Market Data and Key Metrics Changes - Domains under management and transactions are normalizing at a modestly lower level due to a customer taking their business in-house [5] - The wholesale channel revenue rose 2% year-over-year to $57 million, supported by strong growth in value-added services [13] Company Strategy and Development Direction - The company aims to transition into a capital-light business with a lean operating model, focusing on recurring revenue and strong customer retention [24][25] - The leadership approach emphasizes customer-centric execution, operational excellence, and financial rigor in decision-making [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complexity of the current operating environment and expressed confidence in the company's ability to navigate changes [4] - The outlook for fiscal 2026 includes an adjusted EBITDA range of $47 million-$49 million for Tucows Domains and $14.5 million-$15.5 million for Wavelo, with corporate adjusted EBITDA expected to be between -$6 million and -$9 million [20][21] Other Important Information - The company ended the quarter with cash and restricted cash of $64.2 million, down from $73.2 million in Q4 of last year [18] - Corporate net debt, excluding Ting, was $189.5 million, with compliance maintained under the TCX syndicated facility [18] Q&A Session Summary - There was no live Q&A session; however, shareholders and analysts were invited to submit questions via email, with responses to be posted on the company's website [2][28]