Core Insights - Tucows Inc. reported strong operating revenue growth for the fourth consecutive year, with adjusted EBITDA reaching the top of the guidance range, primarily driven by improved results from Ting [2][3] - The company faced a net loss in Q4 2024 due to one-time impairment charges and restructuring costs, but excluding these, there were meaningful improvements in key financial metrics [2][4] Financial Performance - Consolidated net revenue for Q4 2024 increased by 7.1% to $93.1 million from $87.0 million in Q4 2023, driven by revenue gains from Ting and Tucows Domains [3][7] - Gross profit for Q4 2024 rose by 19% to $21.2 million compared to $17.8 million in Q4 2023, attributed to gains from Ting and Domains businesses [3][7] - Adjusted EBITDA for Q4 2024 surged by 403% to $12.8 million from $2.6 million in Q4 2023, mainly due to revenue growth and cost management in the Ting business [5][7] Loss and Adjusted Metrics - The net loss for Q4 2024 was $45.3 million, or a loss of $4.11 per share, compared to a net loss of $23.4 million, or a loss of $2.14 per share, in Q4 2023 [4][7] - Adjusted net loss for Q4 2024 was $15.8 million, or an adjusted EPS of ($1.43), an improvement from the adjusted net loss of $22.4 million and adjusted EPS of ($2.05) in Q4 2023 [4][18] Cash Position - Cash equivalents, restricted cash, and restricted cash equivalents at the end of Q4 2024 were $73.2 million, down from $91.1 million at the end of Q3 2024 and $92.7 million at the end of Q4 2023 [6][7] Business Segments - Ting Internet Services generated revenue of $15.7 million in Q4 2024, up from $13.8 million in Q4 2023, while Wavelo Platform Services reported revenue of $9.9 million [9] - Tucows Domain Services saw total revenue of $65.7 million in Q4 2024, compared to $61.8 million in Q4 2023, reflecting growth in both wholesale and retail segments [9] Management Commentary - Management emphasized the resilience of the business and ongoing efforts to optimize revenue and cost efficiencies, alongside progress in deleveraging through cash flow from Wavelo and Tucows Domains [2][19]

Core Points - Tucows Inc. has announced a new stock buyback program to repurchase up to $40 million of its common stock in the open market [1][2] - The buyback program will start on February 14, 2025, and will end on or before February 13, 2026 [2] - The previous buyback program, also worth $40 million, which began on February 23, 2024, has been terminated [2] Buyback Program Details - Purchases will be made exclusively through the Nasdaq Capital Market and will depend on available cash and market conditions [2][3] - Tucows may suspend or discontinue the repurchases at any time, particularly if it is deemed to be making an acquisition of its own shares under relevant regulations [3] - All shares purchased will be retired and returned to treasury [2] Financial Information - The buyback will be funded from available working capital and existing credit facilities [4] - As of February 12, 2025, Tucows had 11,030,156 common shares outstanding [4] Company Overview - Tucows provides internet access through various services including communications technology, domain services, and fiber-optic internet infrastructure [5] - The company operates Ting, which offers fixed fiber Internet access, and Wavelo, a telecommunications software suite [5] - Tucows Domains manages approximately 25 million domain names through a global reseller network [5]

Core Points - Tucows Inc. will report its financial results for the fourth quarter ended December 31, 2024, on February 13, 2025, at 5:05 p.m. ET [1] - A pre-recorded audio commentary and transcript discussing the quarter and outlook will be available on the Tucows website concurrently with the financial results release [2] - Shareholders, analysts, and prospective investors can submit questions to management for seven days following the results announcement, with responses to be posted on March 4, 2025 [3] Company Overview - Tucows connects people to internet access through various services including communications technology, domain services, and fiber-optic internet infrastructure [4] - The company operates Ting, which provides fixed fiber internet access, and Wavelo, a telecommunications software suite for service providers [4] - Tucows Domains manages approximately 25 million domain names and offers services through a global reseller network of over 35,000 web hosts and ISPs [4]

Financial 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]

Financial Performance - Consolidated net revenue for Q3 2024 increased by 6.1% to $92.3 million from $87.0 million in Q3 2023, driven by revenue gains from Ting and Domains[3] - Gross profit for Q3 2024 rose by 32.4% to $22.2 million compared to $16.8 million in Q3 2023, primarily due to significant gross margin gains from Ting and Domains[4] - Adjusted EBITDA for Q3 2024 increased by 94.3% to $8.7 million from $4.5 million in Q3 2023, attributed to revenue growth from Domains and Ting, along with cost management in the Ting business[6] - Net loss for Q3 2024 was $22.3 million, or a loss of $2.03 per share, an improvement from a net loss of $22.8 million, or $2.09 per share, in Q3 2023[5] Cash and Liquidity - Cash equivalents at the end of Q3 2024 were $91.1 million, up from $52.2 million at the end of Q2 2024, but down from $122.4 million at the end of Q3 2023[7] - The net cash used in operating activities for the first nine months of 2024 was $(14.95) million, a slight increase in cash outflow compared to $(13.77) million in the same period of 2023[8] Revenue Breakdown - Revenue from Ting Internet Services for Q3 2024 was $15.3 million, up from $12.9 million in Q3 2023, reflecting a year-over-year growth[9] - Total revenue from Tucows Domain Services for Q3 2024 was $64.7 million, compared to $61.1 million in Q3 2023, indicating a growth of approximately 4.3%[9] Operational Efficiency - The company undertook a second workforce reduction in the Ting business as part of a capital efficiency plan aimed at maximizing existing network contributions[2] - Tucows continues to focus on cost controls across all businesses while aiming for revenue and margin gains[2] Future Outlook - Tucows expects to realize synergies from the Enom acquisition, contributing to future financial results[18] - The company anticipates growth in Ting Internet, although specific growth figures were not disclosed[18] - Forward-looking statements are subject to uncertainties and risks that could materially affect actual results[18]

Core Viewpoint - Tucows Inc. demonstrated a clear focus on revenue and margin improvement in Q3 2024, primarily driven by the Ting Internet and Tucows Domain segments, alongside strategic workforce reductions to enhance capital efficiency [1][10]. Q3 Results - The company reported a net loss of $2.03 per share, an improvement from the $2.09 loss in the same quarter last year [2]. - Total revenues for the quarter reached $92.3 million, reflecting a 6.1% increase from $87 million in the prior-year quarter [2]. Segmental Performance - **Ting Internet Services**: Revenues increased by 19% to $15.3 million from $12.9 million year-over-year, with gross margin rising to $10.9 million from $8 million [3]. - **Wavelo Platform Services**: Revenues declined by 9% to $10.1 million from $11.1 million year-over-year, attributed to reduced revenues in other professional services [4]. - **Tucows Domain Services**: Revenue grew by 6% to $64.7 million from $61.1 million year-over-year, with wholesale domain services revenue rising to $55 million from $51.9 million [5]. Profitability Metrics - Gross profit increased by 32.4% to $22.2 million from $16.8 million year-over-year, driven by margin improvements in the Ting Internet and Tucows Domain segments [6]. - Adjusted EBITDA surged by 94.3% to $8.7 million from $4.5 million year-over-year, resulting from improved revenues and stringent cost management [7]. Cost Analysis - Total network expenses decreased by 10% from $19.5 million in Q3 2023 to $17.5 million in Q3 2024, reflecting lower impairment charges and operational efficiencies [8]. Cash, Debt & Capital Expenditure - At the end of Q3 2024, the company held $91.1 million in cash, up from $52.2 million in Q2 2024 but down from $122.4 million a year ago [9]. - The company is focused on deleveraging and maintaining a robust balance sheet through cost-control initiatives [9]. Other Developments - Tucows completed a second round of workforce reductions in the Ting Internet division as part of its restructuring strategy, contributing to an improved cost structure [10].

Financial Performance - For the three months ended September 30, 2024, the company reported net revenue of $92.3 million, an increase from $87.0 million for the same period in 2023, representing a growth of approximately 2.9%[190] - Total net revenues for the three months ended September 30, 2024, increased by $5.3 million or 6%, to $92.3 million compared to the same period in 2023[245] - Total net revenues for the nine months ended September 30, 2024, increased by $16.8 million or 7%, to $269.2 million compared to the same period in 2023[246] - Ting generated $15.3 million in net revenue during the three months ended September 30, 2024, up $2.5 million or 19% compared to the same period in 2023[251] - Net revenues from Wavelo Platform Services increased by $2.4 million or 9% to $29.9 million for the nine months ended September 30, 2024, compared to the same period in 2023[255] - Net revenues from Other Professional Services decreased by $1.6 million or 98% to $26,000 for the nine months ended September 30, 2024, compared to the same period in 2023[257] - Wholesale domain services net revenue increased by $5.8 million or 4% to $146.5 million for the nine months ended September 30, 2024, compared to the same period in 2023[259] - Retail domain services net revenue increased by $1.9 million or 7% to $28.0 million for the nine months ended September 30, 2024, compared to the same period in 2023[264] - Net revenues from Mobile Services increased by $0.4 million or 7% to $6.3 million for the nine months ended September 30, 2024, compared to the same period in 2023[266] Subscriber Growth - As of September 30, 2024, Ting Internet had 50,000 active subscribers, up from 41,000 active subscribers as of September 30, 2023, indicating a growth of approximately 22%[192] - Internet subscribers under management increased to 50,000 in September 2024, up from 41,000 in September 2023, representing a growth of 21.95%[206] - Wavelo's integration into Ting Internet has enabled faster subscriber growth and footprint expansion, with revenues tied to subscriber volumes[214] Infrastructure and Services - Ting Internet had access to 132,000 owned infrastructure serviceable addresses, an increase from 114,000 in the previous year, reflecting a growth of approximately 15.8%[192] - The company operates three segments: Ting, Wavelo, and Tucows Domains, each focusing on distinct services and markets[188] - Tucows Domains manages 24.6 million domain names, with an increase of less than 0.1 million, or less than 1%, since September 30, 2023[202] - Total domain names under management reached 24,565 in September 2024, slightly up from 24,543 in September 2023, indicating a growth of 0.09%[209] Cost Management and Efficiency - The company incurred non-recurring charges of approximately $2.6 million related to a workforce reduction aimed at streamlining operations within the Ting segment[194] - The Capital Efficiency Plan is expected to incur non-recurring charges of approximately $7.4 million, impacting about 42% of Ting's workforce[195] - The company anticipates that the workforce reductions and Capital Efficiency Plan will lead to savings primarily in sales and marketing, with smaller impacts in other operational areas[196] - The company has executed a capital efficiency plan that will significantly slow new Ting Internet footprint expansion, potentially impacting long-lived asset values[222] Financial Obligations and Risks - Cash and cash equivalents decreased by $17.5 million as of September 30, 2024, primarily due to $44.8 million invested in property and equipment for Ting Internet expansion[326] - Net cash outflows from operating activities for the nine months ended September 30, 2024, totaled $15.0 million, a 9% increase compared to the same period in 2023[332] - The Company ended September 30, 2024, with a remaining principal balance of $197.4 million on the 2023 Credit Facility, with repayments due in 2026[330] - Ting may not meet its financial obligations over the twelve months following September 30, 2024, without additional financing[342] - The company is subject to market risk exposure related to changes in interest rates under the 2023 Credit Agreement[346] Internal Controls and Compliance - The company is in the process of remediating a material weakness in internal control over financial reporting[359] - Management concluded that disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting as of September 30, 2024[356] - The company believes its consolidated statements fairly represent its financial position, results of operations, and cash flows despite the material weakness[357] - The company is involved in various investigations and lawsuits, none of which are believed to materially harm the business[360] Adjusted EBITDA - Adjusted EBITDA for Q3 2024 increased by $4.2 million or 94%, reaching $8.7 million compared to Q3 2023, primarily driven by subscriber growth in Ting and reduced sales and marketing expenses[323] - For the nine months ended September 30, 2024, Adjusted EBITDA rose by $9.2 million or 71%, totaling $22.1 million, with significant contributions from Ting, Wavelo, and Tucows Domains[324] - Ting's contribution to Adjusted EBITDA increased by $10.7 million for the nine months ended September 30, 2024, driven by subscriber growth and reduced spending[324]

Core Insights - Tucows Inc. reported strong year-over-year growth in revenue, gross profit, and adjusted EBITDA for Q3 2024, emphasizing revenue generation and cost control measures [2][3][6] Financial Performance - Consolidated net revenue for Q3 2024 increased by 6.1% to $92.3 million from $87.0 million in Q3 2023, primarily driven by revenue gains from Ting and Domains [3][9] - Gross profit for Q3 2024 rose by 32.4% to $22.2 million from $16.8 million in Q3 2023, attributed to significant gross margin improvements from Ting and Domains [4][9] - Adjusted EBITDA for Q3 2024 surged by 94.3% to $8.7 million from $4.5 million in Q3 2023, mainly due to revenue growth from Domains and Ting, along with effective cost management in the Ting business [6][9] Loss and Cash Flow - The net loss for Q3 2024 was $22.3 million, or a loss of $2.03 per share, compared to a net loss of $22.8 million, or $2.09 per share, in Q3 2023, reflecting improved revenue and gross profit along with reduced operating expenses [5][9] - Cash equivalents at the end of Q3 2024 were $91.1 million, an increase from $52.2 million at the end of Q2 2024, but a decrease from $122.4 million at the end of Q3 2023 [7][9] Business Segments - In the Ting Internet Services segment, revenue for Q3 2024 was $15.3 million, up from $12.9 million in Q3 2023, while gross profit increased significantly [9][10] - The Wavelo platform services generated $10.1 million in revenue for Q3 2024, slightly down from $10.7 million in Q3 2023, indicating a need for strategic adjustments [9][10] Management Commentary - Management highlighted the implementation of cost controls and a workforce reduction in the Ting business as part of a capital efficiency plan aimed at maximizing existing network contributions [2][5]

Capital Efficiency Plan - Tucows Inc has implemented a capital efficiency plan, including significant layoffs in its Ting business and at the head office level, as part of a shared services reorganization [1] - The plan impacts approximately 42% of Ting's workforce and 17% of Tucows' total workforce [2] - The decision was made to cut expenses and move towards Ting becoming self-sufficient, with the goal of transitioning Ting to a cash-generating business that sustains its own operations and growth [2] Financial Impact and Goals - The capital efficiency plan is expected to lead to significant Adjusted EBITDA growth for Tucows in 2025, with Ting business projected to be around Adjusted EBITDA breakeven in 2025 [2] - The plan aims to put Ting and Tucows businesses back on paths of growing Adjusted EBITDA, with a focus on increasing penetration within existing footprints and large partner markets like Memphis and Colorado Springs [2] - The company has secured capital from a recent asset-backed securitization to support this plan [2] Upcoming Details - The capital efficiency plan will be discussed in more detail in the upcoming Q3 2024 Management Remarks on November 7, 2024 [3] - Links to the third quarter remarks and related earnings reports will be available on Tucows' investor relations website [3] Company Overview - Tucows Inc is a global internet services leader, providing communications service technology, domain services, and fiber-optic internet infrastructure [4] - Ting delivers fixed fiber Internet access with outstanding customer support, while Wavelo offers a telecommunications software suite for service providers [4] - Tucows Domains manages approximately 25 million domain names and millions of value-added services through a global reseller network of over 35,000 web hosts and ISPs [4] - Hover provides domain name and email management services for individuals and small businesses [4]

TORONTO, Oct. 24, 2024 /PRNewswire/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC) today announced that it will report its financial results for the third quarter ended September 30, 2024, via news release on Thursday, November 7, 2024 at 5:05 p.m. ET. Concurrent with the dissemination of its quarterly financial results news release at 5:05 p.m. ET on Thursday, November 7, 2024, management's pre-recorded audio commentary and transcript discussing the quarter and outlook for the Company will be posted to the Tucows w ...