Tucows Inc.: Q4 FY2024 earnings call

What management said about Q4 FY2024, from the documents filed with the SEC on 13 March 2025: press release. The quarter’s numbers.

Key takeaways

Results revised after subsequent event: After a recognized subsequent event, the company reduced the previously disclosed non-cash impairment charge for property and equipment and reported the amended results. Source
Q4 net loss narrowed per share: Q4 net loss is $42.5 million, or $3.86 per share, against $45.3 million and $4.11 per share in the earlier release. Source
Net revenue rose 7%: Net revenues were $93.1 million, up 7% from $87.0 million; full year was $362.3 million, up 7% from $339.3 million. Source
Ting revenue rose, loss narrowed: Ting fiber revenue was $15.7 million against $13.8 million; Ting adjusted EBITDA was a $1.5 million loss against a $12.4 million loss a year earlier. Source
Q4 impairment now $18.3 million: Impairment of property and equipment is $18.3 million for the quarter, $2.81 million below the earlier figure, and $19.2 million for the year, down from $22.0 million earlier. Source
Adjusted EBITDA rose to $12.8 million: Adjusted EBITDA was $12.8 million for the quarter against $2.6 million, and $34.9 million for the year against $15.5 million; both match the February release. Source

“All numbers have been updated in this release and in other Q4 2024 impacted reports, including the unaudited financial statements. The 2024 10-K reflects the revised results.”
Tucows Inc., press release

Amended fourth quarter results

Results revised after subsequent event: After a recognized subsequent event, the company reduced the previously disclosed non-cash impairment charge for property and equipment and reported the amended results. Source
Q4 net loss narrowed per share: Q4 net loss is $42.5 million, or $3.86 per share, against $45.3 million and $4.11 per share in the earlier release. Source
Full-year net loss also revised: Full-year net loss is $109.9 million, or $10.02 per share, against $112.7 million and $10.27 per share earlier. Source

Revenue and gross profit

Net revenue rose 7%: Net revenues were $93.1 million, up 7% from $87.0 million; full year was $362.3 million, up 7% from $339.3 million. Source
Gross profit rose 19%: Gross profit was $21.2 million, up 19% from $17.8 million; full-year gross profit was $83.0 million, up 25% from $66.7 million. Source
Transferred asset income declined: Income earned on sale of transferred assets, net, was $3.2 million against $4.1 million, down 20%; the full year was $14.0 million, down 18%. Source

Segment results

Ting revenue rose, loss narrowed: Ting fiber revenue was $15.7 million against $13.8 million; Ting adjusted EBITDA was a $1.5 million loss against a $12.4 million loss a year earlier. Source
Domain services revenue grew: Domain services revenue was $65.7 million, up from $61.8 million: wholesale $56.1 million, including value added services of $5.5 million (up from $4.2 million), and retail $9.6 million. Segment adjusted EBITDA was $11.6 million against $10.8 million. Source
Wavelo revenue and EBITDA rose: Wavelo platform revenue was $9.9 million against $9.5 million; segment adjusted EBITDA was $3.7 million against $2.6 million. Source
Mobile services flat, EBITDA lower: Mobile services and eliminations revenue was $1.8 million in both periods; adjusted EBITDA was a $1.0 million loss against $1.5 million of income. Source

Impairment and network costs

Q4 impairment now $18.3 million: Impairment of property and equipment is $18.3 million for the quarter, $2.81 million below the earlier figure, and $19.2 million for the year, down from $22.0 million earlier. Source
Network expenses $17.4 million total: Total network expenses were $17.4 million against $17.6 million; network depreciation rose to $10.5 million from $9.5 million, and other network costs fell to $6.0 million from $7.6 million. Source

Adjusted EBITDA and non-GAAP measures

Adjusted EBITDA rose to $12.8 million: Adjusted EBITDA was $12.8 million for the quarter against $2.6 million, and $34.9 million for the year against $15.5 million; both match the February release. Source
Adjusted net loss narrowed: Adjusted net loss was $15.8 million against $22.4 million; adjusted EPS was $(1.43) against $(2.05). Full-year adjusted net loss was $76.8 million, with adjusted EPS of $(7.00) against $(6.88). Source
Adjusted EBITDA definition exclusions: Adjusted EBITDA excludes depreciation, impairment, amortization, income tax, net interest expense and stock-based compensation, among other items. Source

Transition, tax and stock costs

Acquisition and transition costs rose: Acquisition and transition costs were $8.4 million against $0.8 million for the quarter; for the year they were $13.9 million against $1.9 million. Source
Income tax provision versus recovery: Income tax provision was $1.9 million for the quarter, against a $1.3 million recovery a year earlier; the full-year provision was $8.0 million against a $6.9 million recovery. Source
Stock-based compensation amounts: Stock-based compensation was $1.6 million for the quarter against $1.5 million; for the year it was $7.0 million against $8.1 million. Source

Products and business lines

Ting fiber internet access: Ting provides fixed fiber internet access and is reported as the Ting Internet Services segment. Source
Wavelo software suite for providers: Wavelo is a software suite for service providers covering network access management, provisioning, billing and subscriptions, and developer tools. Source
Hover domain and email management: Hover serves individuals and small businesses for managing domain names and email addresses. Source

Coming up, as management said on 13 March 2025

Q&A responses posted March 4: Responses to shareholder and analyst questions will be posted as audio and transcript on March 4, 2025, around 5 p.m. ET. Source

Figures management reported

Figure	Reported
Global reseller network (web hosts and ISPs) Source	over 35,000

Risks management discussed

Operational: Ting impairment and restructuring charges were cited as a cause of the larger quarterly loss. Source
Financial: Higher interest expense was cited as a cause of the larger quarterly loss. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Tucows issues amendment to Q4 2024 earnings

TORONTO, March 13, 2025 - Tucows Inc. (NASDAQ:TCX, TSX:TC), a global internet services leader, today reported an amendment to its unaudited financial results for the fourth quarter and full year ended December 31, 2024. All figures are in U.S. dollars.

Updated Financial Results As a result of a recognized subsequent event, we have reduced our previously disclosed non-cash impairment charge for property and equipment. The previously disclosed amount for Q4 2024 and FY 2024 was reduced by $2.81 million, reflecting updated valuation inputs. All numbers have been updated in this release and in other Q4 2024 impacted reports, including the unaudited financial statements. The 2024 10-K reflects the revised results.

Net loss for the fourth quarter of 2024 was $42.5 million, or a loss of $3.86 per share, compared with net loss of $23.4 million, or a loss of $2.14 per share, for the fourth quarter of 2023. The increased loss was primarily a result of one-time impairment in Ting and restructuring charges, as well as increased interest expense. Excluding impairment, restructuring items and other transition costs, Adjusted net income(loss) and Adjusted EPS in Q4 2024 are ($15.8 million) and ($1.43) per share compared to Q4 2023 Adjusted net income (loss) of ($22.4 million) and Adjusted EPS of ($2.05) per share.

Summary Financial Results

(In Thousands of US Dollars, except Per Share data)

	3 Months ended December 31			12 Months ended December 31
	2024 (unaudited)	2023 (unaudited)	% Change (unaudited)	2024 (unaudited)	2023 (unaudited)	% Change (unaudited)
Net Revenues	93,098	86,958	7%	362,275	339,337	7%
Gross Profit	21,223	17,821	19%	83,029	66,667	25%
Income Earned on Sale of Transferred Assets, net	3,244	4,062	(20)%	13,978	17,033	(18)%
Net Income (Loss)	(42,475)	(23,374)	(82)%	(109,860)	(96,197)	(14)%
Adjusted Net Income (Loss)¹	(15,775)	(22,382)	30%	(76,817)	(74,779)	(3)%
Basic earnings (Loss) per common share	(3.86)	(2.14)	(80)%	(10.02)	(8.85)	(13)%
Adjusted Basic earnings (Loss) per common share¹	(1.43)	(2.05)	30%	(7.00)	(6.88)	(2)%

Non-GAAP financial measures are described below and reconciled to GAAP measures in the accompanying tables.

Summary of Revenues, Gross Profit and Adjusted EBITDA

(In Thousands of US Dollars)

	Revenue		Gross Profit		Adj. EBITDA¹
	3 Months ended December 31		3 Months ended December 31		3 Months ended December 31
	2024 (unaudited)	2023 (unaudited)	2024 (unaudited)	2023 (unaudited)	2024 (unaudited)	2023 (unaudited)
Ting Internet Services:
Fiber Internet Services	15,749	13,821	10,994	7,881	(1,468)	(12,366)
Wavelo Platform Services:
Platform Services	9,888	9,545	9,368	9,214	3,679	2,604
Tucows Domain Services:
Wholesale
Domain Services	50,586	48,279	9,967	9,968
Value Added Services	5,480	4,184	4,981	3,661
Total Wholesale	56,066	52,463	14,948	13,629
Retail	9,608	9,348	5,393	5,229
Total Tucows Domain Services	65,674	61,811	20,341	18,858	11,633	10,794
Corporate:
Mobile Services and Eliminations	1,787	1,781	(2,052)	(501)	(995)	1,522
Network Expenses:
Network, other costs	n/a	n/a	(5,990)	(7,584)	n/a	n/a
Network, depreciation of property and equipment	n/a	n/a	(10,536)	(9,533)	n/a	n/a
Network, amortization of intangible assets	n/a	n/a	(366)	(371)	n/a	n/a
Network, impairment	n/a	n/a	(536)	(143)	n/a	n/a
Total Network Expenses	n/a	n/a	(17,428)	(17,631)	n/a	n/a
Total	93,098	86,958	21,223	17,821	12,849	2,554

Non-GAAP financial measures are described below and reconciled to GAAP measures in the accompanying tables.

Notes:

1. Tucows reports all financial information required in conformity with United States generally accepted accounting principles (GAAP).

Along with this information, to assist financial statement users in an assessment of our historical performance, the Company discloses non-GAAP financial measures in press releases and on investor conference calls and related events, as the Company believes that the non-GAAP information enhances investors' overall understanding of our financial performance, and should be read in addition to, rather than instead of, the financial statements prepared in accordance with GAAP.

Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies and/or analysts and may differ from period to period. The Company endeavors to compensate for these limitations by providing the relevant disclosure of the items excluded in the calculation of Adjusted EBITDA to net income based on U.S. GAAP; Adjusted net income to GAAP net income; and adjusted basic earnings per share to GAAP basic earnings per share, which should be considered when evaluating the Company's results. Tucows strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.

Adjusted EBITDA

The Company believes that the provision of this supplemental non-GAAP measure allows investors to evaluate the operational and financial performance of the Company’s core business using similar evaluation measures to those used by management. The Company uses Adjusted EBITDA to measure its performance and prepare its budgets. Since Adjusted EBITDA is a non-GAAP financial performance measure, the Company’s calculation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Because Adjusted EBITDA is calculated before certain recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a liquidity measure.

The Company’s Adjusted EBITDA definition excludes depreciation, impairment and loss on disposition of property and equipment, amortization of intangible assets, income tax provision, interest expense (net), stock-based compensation, asset impairment, gains and losses from unrealized foreign currency transactions, loss on debt extinguishment and costs that are not indicative of on-going performance (profitability), including acquisition and transition costs. Gains and losses from unrealized foreign currency transactions removes the unrealized effect of the change in the mark-to-market values on outstanding unhedged foreign currency contracts, as well as the unrealized effect from the translation of monetary accounts denominated in non-U.S. dollars to U.S. dollars.

The following table reconciles net income (loss) to Adjusted EBITDA (in thousands of US dollars):

	3 Months ended December 31		12 Months ended December 31
	2024 (unaudited)	2023 (unaudited)	2024 (unaudited)	2023 (unaudited)
Net income (Loss) for the period	(42,475)	(23,374)	(109,860)	(96,197)
Less:
Provision (recovery) for income taxes	1,918	(1,316)	7,986	(6,873)
Depreciation of property and equipment	10,637	9,661	40,323	36,431
Impairment of property and equipment	18,262	143	19,167	4,822
Amortization of intangible assets	1,208	2,728	5,297	10,829
Interest expense, net	13,748	12,651	51,275	41,771
Loss on debt extinguishment	-	-	-	14,680
Stock-based compensation	1,638	1,528	7,021	8,134
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities	(525)	(316)	(168)	(62)
Acquisition and transition costs*	8,438	849	13,876	1,916
Adjusted EBITDA	12,849	2,554	34,917	15,451

* Acquisition and transition costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.

Adjusted Net Income and Adjusted Basic Earnings Per Common Share (Adjusted EPS)

The Company believes that the provision of this supplemental non-GAAP measure allows investors to best evaluate our operating results and understand the operating trends of our core business without the effect of acquisition and transition costs, impairment expenses and losses on extinguishment of debt. Acquisition and transition costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments. Since adjusted net income and adjusted EPS are non-GAAP financial performance measures, the Company’s calculation of adjusted net income and adjusted EPS may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP.

The Company’s adjusted net income and adjusted EPS definitions exclude from the calculation of reported GAAP net income and GAAP EPS, the effect of the following items: impairment of property and expenses, acquisition and transition costs (including restructuring charges) and loss on debt extinguishment.

The following table reconciles adjusted net income and adjusted EPS to GAAP net income (In thousands of US dollars, except Per Share data):

	3 Months ended December 31		12 Months ended December 31
	2024 (unaudited)	2023 (unaudited)	2024 (unaudited)	2023 (unaudited)
Net Income (Loss) for the period	(42,475)	(23,374)	(109,860)	(96,197)
Less:
Loss on debt extinguishment	-	-	-	14,680
Acquisition and transition costs*	8,438	849	13,876	1,916
Impairment of property and equipment	18,262	143	19,167	4,822
Adjusted Net Income (Loss)¹ for the period	(15,775)	(22,382)	(76,817)	(74,779)
Adjusted Basic Earnings (Loss) Per Common Share¹	(1.43)	(2.05)	(7.00)	(6.88)

Management Commentary

Concurrent with the dissemination of its quarterly financial results news release at 5:05 p.m. ET on Thursday, February 13, 2025, management’s pre-recorded audio commentary (and transcript), discussing the quarter and outlook for the Company will be posted to the Tucows website at http://www.tucows.com/investors/financials.

Following management’s prepared commentary, for the subsequent seven days, until Thursday, February 20, 2025, shareholders, analysts and prospective investors can submit questions to Tucows’ management at ir@tucows.com. Management will post responses to questions in an audio recording and transcript to the Company’s website at http://www.tucows.com/investors/financials, on Tuesday, March 4, 2025, at approximately 5 p.m. ET. All questions will receive a response, however, questions of a more specific nature may be responded to directly.

About Tucows

Tucows helps connect more people to the benefit of internet access through communications service technology, domain services, and fiber-optic internet infrastructure. Ting (https://ting.com) delivers fixed fiber Internet access with outstanding customer support. Wavelo (https://wavelo.com) is a telecommunications software suite for service providers that simplifies the management of mobile and internet network access; provisioning, billing and subscription; developer tools; and more. Tucows Domains (https://tucowsdomains.com) 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. Hover (https://hover.com) makes it easy for individuals and small businesses to manage their domain names and email addresses. More information can be found on Tucows’ corporate website (https://tucows.com).

Tucows, Ting, Wavelo, and Hover are registered trademarks of Tucows Inc. or its subsidiaries.

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our expectations regarding our future financial results and, including, without limitation, our expectations regarding our ability to realize synergies from the Enom acquisition and our expectation for growth of Ting Internet. These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Information about other potential factors that could affect Tucows’ business, results of operations and financial condition is included in the Risk Factors sections of Tucows’ filings with the Securities and Exchange Commission. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements are based on information available to Tucows as of the date they are made. Tucows assumes no obligation to update any forward-looking statements, except as may be required by law.

Contacts
Monica Webb
Vice President, Investor Relations
647.898.9924 mwebb@tucows.com