Tucows Inc. Aktie

Welcome to the Tucows First Quarter 2026 Management Commentary. We have prerecorded prepared remarks regarding the quarter and outlook for the company. A Tucows-generated transcript of these remarks with relevant links is also available on the company's website. We will begin with opening remarks and business segment commentary from David Woroch, President and CEO of Tucows and Tucows Domains; followed by Ivan Ivanov, Tucows CFO, who will discuss our financial results in detail, and we will finish with closing remarks from David Woroch.

In lieu of a live question-and-answer period following these remarks, shareholders, analysts and prospective investors are invited to submit questions to Tucows management. Please submit questions via e-mail to [email protected] until Thursday, May 14. Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the Tucows website on Wednesday, May 20, at approximately 5:00 p.m. Eastern Time.

We would also like to advise that the updated investor presentation and the Tucows quarterly KPI summary, which provides key metrics for all of our businesses for the last five quarters as well as for full years 2024, 2025 and 2026 year-to-date and also includes historical financial results is available in the Investors section of the website.

Now for management's prepared remarks. On Thursday, May 7, Tucows issued a news release reporting its financial results for the first quarter ended March 31, 2026. That news release and the company's financial statements are available on the company's website at tucows.com under the Investors section. Please note the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable to its business.

Now I would like to turn the call over to Tucows' President and Chief Executive Officer, David Woroch. Go ahead, Dave.

Thank you, Monica. Tucows has always been a company built on durable recurring revenue, a long-term mindset and a practical approach to innovation, and that continued to show through in the quarter. Across the business, our teams remain focused on operating well and advancing the work in front of us. Overall, in Q1, we saw continued progress against the priorities in each of our business segments. I'll begin with some high-level comments on the quarter and developments across Domains, Wavelo and Ting, and then Ivan will take you through the segment and consolidated financial results in more detail.

With Tucows Domains, gross profit and adjusted EBITDA both increased year-over-year, reflecting the consistency of our business model, while revenue was modestly below the prior year period. Our reseller channel and customer base continues to support healthy margins and Q1 benefited from a favorable mix of higher-margin product sales, customer composition and prudent expense management. Domain Services remained the primary driver of profitability with a healthy, albeit lower contribution from value-added services. This lower contribution is against a particularly strong prior year comparison with more modest expiry stream sales in the current quarter.

Retail continued to perform well, and we are pleased to share that we completed the migration of the Radix Registry portfolio in mid-March with the full quarterly benefit expected in our Wholesale segment in Q2. More broadly, we remain focused on disciplined execution across the Domains business, including scaling complementary growth areas like registry, while continuing to manage the core business for profitability and cash generation.

For Wavelo, Q1 was a solid start to the year. Revenue was modestly ahead of the prior year period and subscriber levels remain broadly stable year-over-year. We continue to benefit from the operating foundation we built in 2025, including a disciplined approach to profitability, a more mature go-to-market program and a product and pipeline strategy that we believe positions us well for future bookings growth. That said, the year-over-year comparison reflects the fact that the prior year period benefited from both a rate card increase and customer subscriber growth, while subscriber levels have since moderated.

Consistent with what we said last quarter, Q1 also reflected continued investment in sales and marketing as we work to strengthen pipeline health and support future growth. Those investments weighed on gross profit and adjusted EBITDA year-over-year. Even so, we remain confident in the strategy. We are investing thoughtfully and selectively in go-to-market capacity while maintaining a lean operating model, and we believe that balance continues to position Wavelo well for long-term profitable growth.

Ting's Q1 results marked important progress with subscriber growth and revenue both accelerating. Adjusted EBITDA improved by 50% versus Q1 of last year, reflecting the benefits of a growing subscriber base, continued capital discipline and contributions from a senior living community contract. At the same time, Ting's partner footprint continues to expand, supporting a more capital-efficient path to growth. With respect to Ting's strategic process, our priorities remain unchanged. We continue to actively progress work to reach an outcome that best supports long-term value creation. While we are not in a position to provide a substantive update today, this remains a top priority for management and the Board.

Now we'll hear from our CFO, Ivan Ivanov, who will discuss our financial results in detail.

Thanks, Dave, and thank you all for joining us today. Consolidated net revenue for the first quarter of '26 increased 2% to $96.7 million from $94.6 million for the first quarter of '25, driven by strong revenue gains from Ting Fiber. I'll walk through each business following the consolidated results, but to break out the Q1 revenue contributions, Domains, Wavelo and Corporate combined drove $77.2 million and Ting contributed $19.4 million. Q1 gross profit was $24.1 million, up 2.5% year-over-year, supported by margin expansion from Domains and Ting, moderated network costs and partially offset by headwinds from the legacy mobile business, which are recognized in our Corporate segment.

Breaking out Q1 gross profit by business, $22.4 million came in from Domains, Wavelo and Corporate and $1.7 million from Ting. Operating expenses in Q1 were $28.4 million, up 11% year-over-year, primarily from higher sales and marketing spend in Ting and Wavelo. We delivered $11.7 million in adjusted EBITDA this quarter, down 15% year-over-year from $13.7 million, primarily due to gross margin decreases in our Corporate segment as well as investment in Wavelo's go-to-market efforts. Of Q1 adjusted EBITDA, $12.1 million came from Domains, Wavelo and Corporate combined and a negative $0.4 million for Ting.

On a GAAP basis, net loss for the quarter was $18.1 million or $1.63 loss per share, an increase from a net loss of $15.1 million or $1.37 per share for Q1 of last year. On a non-GAAP adjusted basis, net loss for Q1 '26 was $16.9 million or a loss of $1.51 per share compared to an adjusted net loss of $14.9 million or $1.35 loss per share in Q1 '25, with the year-over-year changes primarily attributable to professional fees and legacy mobile obligations.

Let me now walk through the segments. As a reminder, beginning in Q3 '25, we revised our presentation of gross profit in our press release to reflect amounts net of network expenses, aligning external reporting with how we manage the business. However, we continue to provide investors with gross margin and network expenses broken out by business in our KPI summary, and I will address factors in each business impacting gross margin.

Let me first start with Tucows Domains. Q1 revenue for Tucows Domains declined 2% year-over-year to $64.1 million from $65.3 million, while gross profit grew by 2% in Q1 to $18.6 million from $18.3 million in Q1 '25 after network expenses. Gross profit performance was supported by a favorable mix of high-margin product sales. Domains adjusted EBITDA was $11.6 million for the quarter, up modestly from the prior year on the back of margin expansion and prudent expense management.

Within Domains, Q1 '26 wholesale revenue declined 3% to $54.3 million from $55.9 million in Q1 '25, reflecting the tailwind of the impact from a large customer moving low-margin domains in-house. At the same time, wholesale gross margin, net of network expenses rose 1% in Q1 '26 over the last year due to a favorable mix of higher-margin product sales. Within the wholesale channel, Domain Services gross margin generated $10 million in Q1 '26 for a year-over-year gain of 4%. Value-added services was down 5% year-over-year to $5.1 million in Q1 '26 from moderated expiry sales. In Q1 '26, retail revenue increased 5% year-over-year to $9.8 million and retail gross margin increased 8% to $5.6 million in Q1 of this year.

Turning to Wavelo. Q1 revenue was $11.6 million with a slight increase year-over-year. Q1 gross profit was $7 million, down from $7.8 million in Q1 '25, and Wavelo's adjusted EBITDA was $3.6 million, down year-over-year from $4.4 million. Both the gross profit and adjusted EBITDA year-over-year reductions were primarily due to continued investment in Wavelo sales and marketing, which began in Q2 of last year. It is also worth noting the prior year comparison -- in 2025, Wavelo benefited from both a rate card increase and subscriber growth. The rate contribution has now leveled off, so we're comparing against a stronger base.

Turning to Ting Internet. Q1 '26 revenue was $19.4 million, up 19% year-over-year, driven primarily by construction revenue associated with Ting's contract with a senior living community as well as continued subscriber growth. As a reminder, construction services revenue is generated from the design, construction and installation of fiber optic network infrastructure under a specific customer agreement with revenue recognized over time as control of the infrastructure transfers to the customer.

For services requiring installation, revenue is recognized once the customer service is activated. Ting's Q1 gross profit was $1.7 million, up from a negligible amount in Q1 '25. Adjusted EBITDA improved to a loss of $0.4 million versus a loss of $0.8 million in the prior year period, continuing the momentum in Ting's path towards profitability.

At the corporate level, Q1 '26 revenue was flat year-over-year at $1.6 million. Q1 gross profit was negative $3.2 million compared to a negative $2.6 million in Q1 of last year. Corporate adjusted EBITDA for Q1 was negative $3.1 million from a negative $1.5 million in Q1 '25. The reduced profitability in the quarter was primarily impacted by mobile contract obligations and lower revenue on the legacy mobile business. As a reminder, profitability from our remaining legacy mobile arrangements continues to be challenged on both the revenue and cost side.

Under the EchoStar agreement, our long-term payment stream depends on the margin generated by the subscriber base transferred in 2020, so returns could be pressured if subscriber churn is higher than expected or if pricing and cost dynamics reduce underlying profitability. Separately, while penalties under our remaining MVNO agreement ended with the completion of the contract term in January of this year, we are now on a month-to-month contract basis with an option to renew.

Let me now move to cash flow and balance sheet. Consolidated cash flow from operating activities for Q1 '26 was $3.5 million compared with a negative $11.3 million in Q1 of last year, making a return to positive operating cash flow trajectory established in Q2 and Q3 of last year. If we break out cash flow from operations for Q1 '26, Domains, Wavelo and Corporate combined generated $7.2 million, and Ting generated a $3.7 million outflow mainly from the ABS interest paid.

On capital expenditures, we invested $3.6 million into Ting in Q1 '26 and $1.9 million in Domains and Wavelo combined. We ended Q1 with cash and restricted cash of $34.6 million for Ting and cash of $27.4 million, excluding Ting. We continue to prioritize discipline, capital allocation and maintaining liquidity across the organization. Corporate net debt, excluding Ting, was $162.2 million as of quarter end, net of deferred financing costs. And importantly, we remained in compliance with our covenants under the TCX syndicated facility. For Q1 '26, the leverage ratio was 3.29x and interest coverage was 4.12x, both on site. Ting's net debt stands at $417.8 million and consists of both ABS notes and preferred shares.

In summary, Tucows delivered a solid first quarter in 2026 with consolidated net revenue growing, margin expansion in both Domains and Ting and a return to positive operating cash flow. Domains continues to be the reliable cash-generating engine of the business, while Ting's trajectory is increasingly improving with adjusted EBITDA, reflecting the unit economics of a maturing fiber business moving steadily towards breakeven.

Wavelo is investing deliberately in go-to-market to position itself for the next phase of growth, and Tucows ended the quarter with improved cash position year-over-year while remaining in full covenant compliance. And we're working to address the headwinds from legacy mobile obligations as well as the ongoing strategic initiative work for Ting.

With that, thank you, and I'll pass it back to Dave for his closing remarks.

Thanks, Ivan. Let me close with this. Q1 was a solid start to 2026. We saw continued progress across the business. Revenue and gross profit grew, and we returned to positive operating cash flow, a meaningful swing from the same quarter last year and continued execution against the priorities we laid out at the start of the year. Domains continues to demonstrate what a well-run, durable platform business looks like disciplined expenses, healthy margins and consistent cash generation. The Radix registry migration is now complete, and we expect the full benefit to show in Q2. Ting's trajectory continues to improve. Subscriber growth accelerated, gross profit turned meaningfully positive and adjusted EBITDA losses were cut in half year-over-year. That reflects both the underlying unit economics of a maturing fiber network and the capital efficiency measures we've been deliberate about executing.

Wavelo is in an investment phase, and we're being intentional about it. The spend is in go-to-market. It's in support of future bookings, and we remain confident in the strategy. The year-over-year comparison will continue to reflect that investment, and you should expect that to normalize as we convert pipeline to growth. The Ting strategic process remains a top priority, and we understand investors are looking for greater clarity. While we are not in a position to say more today, I want to be clear. We are actively working toward an outcome that creates long-term value for shareholders. We are hopeful for a good outcome, and we'll share a more meaningful update as soon as it is appropriate to do so.

The area that weighed most on Q1, and I want to be direct about this, was the corporate segment, specifically mobile obligations and professional fees. Those headwinds were real, but represent costs that are not expected to recur indefinitely and that we're working to eliminate. What I can tell you is that the financial position we're in, positive operating cash flow, covenant compliance, improved year-over-year liquidity gives us the ability to navigate this period from a position of stability.

My priorities for the rest of 2026 have not changed, generate free cash flow, improve capital flexibility and continue to hold ourselves accountable to the principles I outlined last quarter: Simpler, more focused, more disciplined. That is the company we are building, and Q1 is a step in that direction.

Thank you all for your continued support, and we look forward to updating you on our progress.

If you have any questions about the quarter or today's commentary, please send them to [email protected] by May 14 and look for our recorded Q&A audio response and transcript to this call to be posted to the Tucows website on Wednesday, May 20, at approximately 5:00 p.m. Eastern Time.

Welcome to Tucows question-and-answer dialogue for Q1 2026. David Woroch, President and Chief Executive Officer of Tucows and Tucows Domains will be responding to your questions. For your convenience, this audio file is also available as a transcript in the Investors section of our website, along with our Q1 2026 financial results and updated reports. I would also like to remind investors that if you would like to receive our quarterly results and Q&A via e-mail, please make the request to [email protected].

Please note that the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-Q and 10-K. The company urges you to read its security filings for a full description of the risk factors applicable to its business.

Today's commentary includes responses to questions submitted to us following the prerecorded management remarks regarding the quarter and outlook for the company. We are grouping similar questions into categories that we feel are addressing common queries. If your questions reach a certain threshold or volume, we may ask to schedule a call instead to ensure we can address the full scope of your questions. And if you feel that the recorded questions and/or any direct e-mail you may receive do not address the full body of your questions, please let us know. Go ahead, Dave.

Thank you, Monica, and welcome to our Q&A for our first quarter financial results. Our first question relates to our increased investment in Wavelo discussed in the Q1 management remarks.

We are looking at Wavelo through the same lens we are applying across all Tucows businesses, strategic fit, capital requirements, growth potential and contribution to shareholder value. As I talked about in Q4, our goal is to transition Tucows into a more focused capital-light company with a lean operating model built around businesses that have recurring revenue, strong retention, platform economics, business-critical workflows and clear opportunities to benefit from shared infrastructure and operational discipline. Wavelo has many of those attributes, which is why we make targeted investments, particularly in product and go-to-market, but those investments are not open-ended. They are being evaluated against clear expectation for bookings conversion and long-term value creation, and how those are both best achieved. More broadly, every business in the Tucows portfolio is being assessed for strategic fit, and how it can create the most value. Ting is in a process because we believe its best path is with an operator that has the capital and operating scale to bring it to profitability. The remaining mobile business is only strategic as part of a converged offering with Ting Internet, and we are working to solve for that in parallel with the Ting process. Tucows' Domains path to growth involves continuing to gain scale and expand margin where the primary gains will come from expanding the channel and new products. Accelerating that growth is contingent on improving liquidity, another key focus for our management team. Another investor asks where we are in the renewal process for our syndicated debt, which expires in September 2027. We are in active discussions on the Tucows renewal. I will remind investors that our syndicated debt peaked at $238.9 million in Q4 2022, and it's now at $189.6 million, plus Tucows $27.4 million in cash.

Thank you for listening to our Q&A. And a reminder that if you feel that the recorded answers or any direct e-mail you receive do not address your question, please follow up with us at [email protected].

Welcome to the Tucows First Quarter 2026 Management Commentary. We have prerecorded prepared remarks regarding the quarter and outlook for the company. A Tucows-generated transcript of these remarks with relevant links is also available on the company's website.

We will begin with opening remarks and business segment commentary from David Woroch, President and CEO of Tucows and Tucows Domains, followed by Ivan Ivanov, Tucows CFO, who will discuss our financial results in detail, and we will finish with closing remarks from David Woroch.

In lieu of a live question-and-answer period following these remarks, shareholders, analysts and prospective investors are invited to submit questions to Tucows management. Please submit questions via e-mail to [email protected] until Thursday, May 14. Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the Tucows' website on Wednesday, May 20, at approximately 5:00 p.m. Eastern Time.

We would also like to advise that the updated investor presentation and the Tucows quarterly KPI summary, which provides key metrics for all of our businesses for the last 5 quarters as well as for full years 2024, 2025 and 2026 year-to-date and also includes historical financial results, is available in the Investors section of the website.

Now for management's prepared remarks. On Thursday, May 7, Tucows issued a news release reporting its financial results for the first quarter ended March 31, 2026. That news release and the company's financial statements are available on the company's website at tucows.com under the Investors section. Please note the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable to its business.

Now I would like to turn the call over to Tucows President and Chief Executive Officer, David Woroch.

Go ahead, Dave.

Thank you, Monica. Tucows has always been a company built on durable, recurring revenue, a long-term mindset, and a practical approach to innovation, and that continued to show through in the quarter. Across the business, our teams remained focused on operating well and advancing the work in front of us.

Overall, in Q1, we saw continued progress against the priorities in each of our business segments. I'll begin with some high-level comments on the quarter and developments across Domains, Wavelo, and Ting, and then Ivan will take you through the segment and consolidated financial results in more detail.

With Tucows Domains, gross profit and Adjusted EBITDA both increased year over year, reflecting the consistency of our business model, while revenue was modestly below the prior-year period. Our reseller channel and customer base continues to support healthy margins, and Q1 benefited from a favorable mix of higher-margin product sales, customer composition and prudent expense management.

Domain Services remained the primary driver of profitability, with a healthy, albeit lower, contribution from Value Added Services. This lower contribution is against a particularly strong prior-year comparison, with more modest expiry stream sales in the current quarter.

Retail continued to perform well, and we are pleased to share that we completed the migration of the Radix registry portfolio in mid-March, with the full quarterly benefit expected in our Wholesale segment in Q2. More broadly, we remain focused on disciplined execution across the Domains business, including scaling complementary growth areas like registry, while continuing to manage the core business for profitability and cash generation.

For Wavelo, Q1 was a solid start to the year. Revenue was modestly ahead of the prior-year period, and subscriber levels remained broadly stable year over year. We continue to benefit from the operating foundation we built in 2025, including a disciplined approach to profitability, a more mature go-to-market program, and a product and pipeline strategy that we believe positions us well for future bookings growth. That said, the year-over-year comparison reflects the fact that the prior-year period benefited from both a rate card increase and customer subscriber growth, while subscriber levels have since moderated.

Consistent with what we said last quarter, Q1 also reflected continued investment in sales and marketing as we work to strengthen pipeline health and support future growth. Those investments weighed on gross profit and adjusted EBITDA year over year. Even so, we remain confident in the strategy. We are investing thoughtfully and selectively in go-to-market capacity while maintaining a lean operating model, and we believe that balance continues to position Wavelo well for long-term, profitable growth.

Ting’s Q1 results marked important progress with subscriber growth and revenue both accelerating. Adjusted EBITDA improved by 50% versus Q1 of last year, reflecting the benefits of a growing subscriber base, continued capital discipline, and contributions from a senior living community contract. At the same time, Ting’s partner footprint continues to expand, supporting a more capital-efficient path to growth.

With respect to Ting’s strategic process, our priorities remain unchanged. We continue to actively progress work to reach an outcome that best supports long-term value creation. While we are not in a position to provide a substantive update today, this remains a top priority for management and the Board.

Now we'll hear from our CFO, Ivan Ivanov, who will discuss our financial results in detail.

Thanks, Dave, and thank you all for joining us today. Consolidated net revenue for the first quarter of '26 increased 2% to $96.7 million from $94.6 million for the first quarter of '25, driven by strong revenue gains from Ting Fiber. I'll walk through each business following the consolidated results, but to break out the Q1 revenue contributions; Domains, Wavelo and Corporate combined drove $77.2 million and Ting contributed $19.4 million. Q1 gross profit was $24.1 million, up 2.5% year over year, supported by margin expansion from Domains and Ting, moderated network costs, and partially offset by headwinds from the legacy mobile business, which are recognized in our Corporate segment.

Breaking out Q1 gross profit by business, $22.4 million came in from Domains, Wavelo and Corporate and $1.7 million from Ting. Operating expenses in Q1 were $28.4 million, up 11% year over year, primarily from higher sales and marketing spend in Ting and Wavelo.

We delivered $11.7 million in Adjusted EBITDA this quarter, down 15% year over year from $13.7 million, primarily due to gross margin decreases in our Corporate segment, as well as investment in Wavelo’s go-to-market efforts. Of Q1 Adjusted EBITDA, $12.1 million came from Domains, Wavelo and Corporate combined, and a negative $0.4 million for Ting. On a GAAP basis, net loss for the quarter was $18.1 million, or $1.63 loss per share, an increase from a net loss of $15.1 million, or $1.37 per share for Q1 of last year.

On a non-GAAP adjusted basis, net loss for Q1 '26 was $16.9 million or a loss of $1.51 per share compared to an adjusted net loss of $14.9 million or $1.35 loss per share in Q1 '25, with the year-over-year changes primarily attributable to professional fees and legacy mobile obligations.

Let me now walk through the segments. As a reminder, beginning in Q3 '25, we revised our presentation of gross profit in our press release to reflect amounts net of network expenses, aligning external reporting with how we manage the business. However, we continue to provide investors with gross margin and network expenses broken out by business in our KPI Summary, and I will address factors in each business impacting gross margin.

Let me first start with Tucows Domains. Q1 revenue for Tucows Domains declined 2% year over year to $64.1 million from $65.3 million, while gross profit grew by 2% in Q1 to $18.6 million from $18.3 million in Q1 '25 after network expenses. Gross profit performance was supported by a favorable mix of high-margin product sales. Domains adjusted EBITDA was $11.6 million for the quarter, up modestly from the prior year on the back of margin expansion and prudent expense management.

Within Domains, Q1 '26 Wholesale revenue declined 3% to $54.3 million from $55.9 million in Q1 '25, reflecting the tail end of the impact from a large customer moving low-margin domains in-house. At the same time, Wholesale gross margin, net of network expenses, rose 1% in Q1 '26 over the last year due to a favorable mix of higher-margin product sales.

Within the Wholesale channel, Domain Services' gross margin generated $10 million in Q1 '26, for a year-over-year gain of 4%. Value Added Services was down 5% year over year, to $5.1 million in Q1 '26, from moderated expiry sales. In Q1 '26, Retail revenue increased 5% year over year to $9.8 million and Retail gross margin increased 8% to $5.6 million in Q1 of this year.

Turning to Wavelo, Q1 revenue was $11.6 million, with a slight increase year over year. Q1 gross profit was $7 million, down from $7.8 million in Q1 '25, and Wavelo's adjusted EBITDA was $3.6 million, down year over year from $4.4 million. Both the gross profit and adjusted EBITDA year-over-year reductions were primarily due to continued investment in Wavelo's sales and marketing, which began in Q2 of last year.

It is also worth noting the prior-year comparison: in 2025, Wavelo benefited from both a rate card increase and subscriber growth. The rate contribution has now leveled off, so we're comparing against a stronger base.

Turning to Ting Internet, Q1 '26 revenue was $19.4 million, up 19% year over year, driven primarily by construction revenue associated with Ting's contract with a senior living community, as well as continued subscriber growth. As a reminder, construction services revenue is generated from the design, construction, and installation of fiber-optic network infrastructure under a specific customer agreement, with revenue recognized over time as control of the infrastructure transfers to the customer.

For services requiring installation, revenue is recognized once the customer's service is activated. Ting's Q1 gross profit was $1.7 million, up from a negligible amount in Q1 '25. Adjusted EBITDA improved to a loss of $0.4 million, versus a loss of $0.8 million in the prior-year period, continuing the momentum in Ting's path toward profitability. At the Corporate level, Q1 '26 revenue was flat year over year at $1.6 million. Q1 gross profit was negative $3.2 million, compared to negative $2.6 million in Q1 of last year.

Corporate adjusted EBITDA for Q1 was negative $3.1 million, from a negative $1.5 million in Q1 '25. The reduced profitability in the quarter was primarily impacted by mobile contract obligations and lower revenue on the legacy mobile business. As a reminder, profitability from our remaining legacy mobile arrangements continues to be challenged on both the revenue and cost side.

Under the EchoStar agreement, our long-term payment stream depends on the margin generated by the subscriber base transferred in 2020, so returns could be pressured if subscriber churn is higher than expected or if pricing and cost dynamics reduce underlying profitability.

Separately, while penalties under our remaining MVNO agreement ended with the completion of the contract term in January of this year, we are now on a month-to-month contract basis with an option to renew.

Let me now move to cash flow and balance sheet. Consolidated cash flow from operating activities for Q1 '26 was $3.5 million, compared with a negative $11.3 million in Q1 of last year, making a return to the positive operating cash flow trajectory established in Q2 and Q3 of last year. If we break out cash flow from operations for Q1 '26, Domains, Wavelo, and Corporate combined generated $7.2 million and Ting generated a $3.7 million outflow, mainly from the ABS interest paid.

On capital expenditures, we invested $3.6 million into Ting in Q1 '26 and $1.9 million in Domains and Wavelo combined. We ended Q1 with cash and restricted cash of $34.6 million for Ting and cash of $27.4 million excluding Ting. We continue to prioritize disciplined capital allocation and maintaining liquidity across the organization.

Corporate net debt, excluding Ting, was $162.2 million as of quarter end, net of deferred financing costs, and importantly, we remained in compliance with our covenants under the TCX syndicated facility. For Q1 '26, the leverage ratio was 3.29x and interest coverage was 4.12x, both onside.

Ting's net debt stands at $417.8 million and consists of both ABS notes and preferred shares. In summary, Tucows delivered a solid first quarter in 2026, with consolidated net revenue growing, margin expansion in both Domains and Ting, and a return to positive operating cash flow. Domains continues to be the reliable cash-generating engine of the business, while Ting's trajectory is increasingly improving, with adjusted EBITDA reflecting the unit economics of a maturing fiber business moving steadily toward breakeven.

Wavelo is investing deliberately in go-to-market to position itself for the next phase of growth, and Tucows ended the quarter with an improved cash position year over year, while remaining in full covenant compliance. And we're working to address the headwinds from legacy mobile obligations as well as the ongoing strategic initiative work for Ting.

With that, thank you and I will pass it back to Dave for his closing remarks.

Thanks, Ivan. Let me close with this. Q1 was a solid start to 2026. We saw continued progress across the business: revenue and gross profit grew, and we returned to positive operating cash flow, a meaningful swing from the same quarter last year, and continued execution against the priorities we laid out at the start of the year.

Domains continues to demonstrate what a well-run, durable platform business looks like: disciplined expenses, healthy margins, and consistent cash generation. The Radix registry migration is now complete, and we expect the full benefit to show in Q2. Ting's trajectory continues to improve. Subscriber growth accelerated; gross profit turned meaningfully positive, and adjusted EBITDA losses were cut in half year over year. That reflects both the underlying unit economics of a maturing fiber network and the capital efficiency measures we've been deliberate about executing.

Wavelo is in an investment phase, and we're being intentional about it. The spend is in go-to-market; it's in support of future bookings and we remain confident in the strategy. The year-over-year comparison will continue to reflect that investment, and you should expect that to normalize as we convert pipeline to growth. The Ting strategic process remains a top priority, and we understand investors are looking for greater clarity. While we are not in a position to say more today, I want to be clear: we are actively working toward an outcome that creates long-term value for shareholders. We are hopeful for a good outcome and will share a more meaningful update as soon as it is appropriate to do so.

The area that weighed most on Q1, and I want to be direct about this, was the Corporate segment, specifically mobile obligations and professional fees. Those headwinds were real, but represent costs that are not expected to recur indefinitely and that we're working to eliminate.

What I can tell you is that the financial position we are in: positive operating cash flow, covenant compliance, improved year-over-year liquidity, gives us the ability to navigate this period from a position of stability. My priorities for the rest of 2026 have not changed: generate free cash flow, improve capital flexibility, and continue to hold ourselves accountable to the principles I outlined last quarter: simpler, more focused, more disciplined, that is the company we are building, and Q1 is a step in that direction. Thank you all for your continued support, and we look forward to updating you on our progress.

If you have any questions about the quarter or today's commentary, please send them to [email protected] by May 14, and look for our recorded Q&A audio response and transcript to this call to be posted to the Tucows' website on Wednesday, May 20, at approximately 5 p.m. Eastern time.

Welcome to Tucows' question-and-answer dialogue for Q4 2025. David Woroch, President and Chief Executive Officer of Tucows and Tucows Domains, will be responding to your questions.

For your convenience, this audio file is also available as a transcript in the Investors section of our website, along with our Q4 2025 financial results and updated reports. I would also like to remind investors that if you would like to receive our quarterly results and Q&A via e-mail, please make the request to [email protected].

Please note that the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-Q and 10-K. The company urges you to read its security filings for a full description of the risk factors applicable to its business.

Today's commentary includes responses to questions submitted to us following the prerecorded management remarks regarding the quarter and outlook for the company. We are grouping similar questions into categories that we feel are addressing common queries. If your questions reach a certain threshold or volume, we may ask to schedule a call instead to ensure we can address the full scope of your questions. And if you feel that the recorded questions and/or any direct e-mail you may receive do not address the full body of your questions, please let us know.

Go ahead, Dave.

Thank you, Monica, and welcome to our Q&A for our fourth quarter financial results. This quarter, we received 3 questions from investors, which we'll address here.

We recognize that many of you are taking a wait-and-see approach regarding the Ting process, and we understand that perspective. The first question is, is there any update you can provide on the sale of Ting assets? Has the process been delayed as the price of such assets begins to fall with the broad market sell-off?

The Ting process has not been delayed. It is ongoing, and we do not believe that external volatility has a direct impact on the time line. We continue to work closely with our financial advisers to determine the optimal path forward. Based on our experience with acquisitions and domains, transactions of this nature require a thorough diligence and coordination among multiple stakeholders, and time lines are driven by the specifics of the asset and the availability of information. We remain deeply engaged in the process and focused on achieving the best outcome.

The next question is, why is the adjusted EBITDA margin on Wavelo expected to be down year-over-year as per 2026 guidance?

As noted in the management remarks with our Q4 release, there are Ting Fiber and mobile customers on the Wavelo platform. Based on different potential outcomes for the Ting process, this could result in a reduction of fees for Wavelo. There is a range here, and we are conservatively forecasting that possibility in Wavelo's adjusted EBITDA guidance. Additionally, we layered in some investments midway through 2025 that are now fully annualized costs in 2026, and we're continuing to invest to grow Wavelo's top line while still remaining below the cost structure of our competitors.

And lastly, we had a question on the announced stock buyback program stating, "I know you always renew this. What is the company's access to liquidity? I also assume that the window is closed until the conclusion of the fiber divestiture."

As a reminder to investors, the annual buyback authorization provides flexibility, not a commitment to buy back stock, and any deployment will be evaluated against return thresholds and liquidity considerations. Liquidity and balance sheet strength remain priorities. As discussed in recent quarters, continued deleveraging of the Tucows' syndicated debt and completion of the Ting divestiture process are central to further strengthening our liquidity profile. The syndicated debt paydown is ongoing, and each dollar repaid increases available borrowing capacity up to the committed limit. A successful Ting divestiture would further enhance liquidity by improving our consolidated free cash flow and adjusted EBITDA profile, supporting greater borrowing capacity and overall financial flexibility.

Capital allocation remains conservative and deliberate. We are developing a formal framework to guide the appropriate balance between continued deleveraging, reinvestment in the business, potential acquisition opportunities and share repurchases. Currently, our liquidity, excluding Ting, consists of approximately $20.9 million of unrestricted cash. Liquidity remains sound, and our immediate focus is consistent free cash flow generation and further balance sheet strengthening.

Thank you for listening to our Q&A. And a reminder that if you feel that the recorded answers or any direct e-mail you receive do not address your question, please follow up with us at [email protected].

Welcome to the Tucows Fourth Quarter 2025 Management Commentary. We have prerecorded remarks regarding the quarter and outlook for the company. A Tucows generated transcript of these remarks with relevant links is also available on the company's website.

We will begin with opening remarks and business segment commentary from David Woroch, President and CEO of Tucows and Tucows Domains; followed by Ivan Ivanov, Tucows CFO, who will discuss our financial results in detail, and we will finish with closing remarks, including 2026 guidance from David Woroch.

In lieu of a live question-and-answer period following these remarks, shareholders, analysts and prospective investors are invited to submit questions to Tucows management. Please submit questions via e-mail to [email protected] until Thursday, February 19. Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the Tucows website on Wednesday, February 25, at approximately 5:00 p.m. Eastern Time.

We would also like to advise that the updated investor presentation and the Tucows Quarterly KPI Summary, which provides key metrics for all of our businesses for the last 8 quarters as well as for full years 2023, 2024 and 2025, and also includes historical financial results is available in the Investors section of the website. As a reminder, beginning last quarter, we revised our presentation of gross profit in our press release to reflect amounts net of network expenses, aligning external reporting with how we manage the business.

Now for management's prepared remarks. On Thursday, February 12, Tucows issued a news release reporting its financial results for the fourth quarter ended December 31, 2025. That news release and the company's financial statements are available on the company's website at tucows.com under the Investors section.

Please note the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable to its business.

Now I would like to turn the call over to Tucows' President and Chief Executive Officer, David Woroch. Go ahead, Dave.

Thank you, Monica. I want to start by acknowledging the teams across Tucows, Domains, Wavelo, Ting and our corporate teams who have continued to execute through a period of real complexity. Tucows has always been a company that builds durable platforms, operates with a long-term mindset and embraces innovation as a practical tool. Our teams have continued that legacy, operating the business efficiently, innovating and navigating change when and where needed.

I'm also appreciative of our Board of Directors who are deeply engaged in the transformation of the business and Elliot, who has been a productive partner in the Ting process and leadership transition.

This quarter was a solid bookend to a strong year for Tucows. We finished 2025 with adjusted EBITDA of $50.6 million, $3.6 million above guidance. The gains were primarily driven by outperformance from Domains and Wavelo. I'll review high-level performance and developments for each business segment, and then our CFO will review the financial results for each segment and the consolidated business in detail.

Tucows Domains delivered another strong year in 2025 with growth across revenue, gross profit and adjusted EBITDA. We finished 2025 exceeding our adjusted EBITDA guidance by $4.7 million. The 2025 performance was driven by solid execution across our core segments, growth in our emerging registry services business, and continued momentum in sales from our Expiry Stream. We are particularly pleased with the progress in scaling registry as a complementary line of business, further diversifying revenue and strengthening our long-term growth profile.

Our domains under management and transactions are normalizing at a modestly lower level as they do from time to time, a result of the previously referenced customer taking their business in-house. But with the broad, diverse and global nature of our reseller base, margin remains healthy.

For Wavelo, I'm very pleased to report for the fourth year in a row, this was our best year yet. In fiscal 2025, Wavelo delivered double-digit growth across revenue, gross profit and adjusted EBITDA, beating 2025 guidance by $4.5 million. 2025 performance was driven by renewing Wavelo's inaugural customer, aligning incentives, creating profitability through discipline and a pipeline and product posture that positions us well for 2026.

Consistent with remarks last quarter, Q4 continued the theme of modest investment in sales and marketing as we look to further strengthen pipeline health in service of 2026 bookings conversion. As we look to 2026, we enter the year with a strong pipeline and a seasoned go-to-market team focused on new customer growth. That said, I want to remind investors that we are executing with an intentionally lean sales and marketing team that represents a meaningfully smaller spend as a percentage of revenue than our competitors. We're able to do so by judiciously integrating AI and having a targeted go-to-market strategy.

For Ting, 2025 couldn't be a more different story when compared to a year ago. Despite finishing the year below guidance, Ting had solid top line growth and a meaningful improvement in adjusted EBITDA. Gross profit was flat in 2025 compared to 2024 and fell short of expectations. A portion of the margin impact reflects the mix shift between partner and owned markets. While net subscriber growth saw its strongest quarter in Q4, the outcome of a refocused and targeted sales and marketing campaign during the year, the uptick came too late to have a more meaningful impact on 2025 results.

Looking forward, we continue to work through our strategic process for Ting. As soon as we have more definitive information and visibility into timing and outcomes, we will advise investors. I understand that's not what everyone wants to hear. We too want clarity on the path forward, and it remains our top priority. When we have something meaningful and disclosable, we will share it. In the meantime, our focus is to operate Ting responsibly, protect enterprise value and preserve optionality, all while we work toward an outcome that maximizes shareholder value.

Now we'll hear from our CFO, Ivan Ivanov, who will discuss our financial results in detail.

Thank you, Dave, and thank you all for joining us today. Consolidated revenue for Q4 '25 was $98.7 million, up 6% year-over-year. All 3 segments contributed. I'll walk through each one shortly, but at the top level, Domains, Wavelo and Corporate combined drove about $80 million of that, and Ting Fiber contributed $18.5 million.

Q4 gross profit was $24.1 million, up 14% year-over-year, with margin supported by favorable mix, particularly higher-margin Domains expiry revenue and lower Wavelo cost of revenues, partially offset by headwinds in TCX from legacy Mobile obligations. Breaking it out, $22.5 million came in from Domains, Wavelo and Corporate combined and $1.6 million from Ting.

Operating expenses in Q4 were $33.1 million, down 35% year-over-year, and that's largely a comparison matter. Last year, Q4 included large restructuring costs and impairment charges, so the year-over-year decline reflects that normalization. We delivered $11.1 million in adjusted EBITDA, down 14% year-over-year or $1.8 million. Of Q4 adjusted EBITDA, $11.9 million came from Domains, Wavelo and Corporate combined and negative $0.9 million from Ting.

Now stepping back for the full year fiscal '25, total consolidated adjusted EBITDA was $50.6 million, which came in $3.6 million above our annual guidance and represents a 45% increase from fiscal '24. If we view fiscal '25 adjusted EBITDA, excluding Ting, it is $56.8 million. On a GAAP basis, net loss for the quarter was $22 million or $1.98 per share, a significant improvement from a net loss of $42.5 million or $3.86 per share for Q4 of last year. On a non-GAAP adjusted basis, net loss for Q4 '25 was $19.4 million or $1.73 per share compared to an adjusted net loss of $15.8 million or $1.43 per share in Q4 '24 with year-over-year changes primarily attributable to professional fees and legacy mobile obligations.

Let me now walk through the segments, starting with Domains. Q4 revenue grew modestly year-over-year to $66.4 million from $65.7 million, accompanied by a 4% increase in gross profit to $19.2 million in Q4 '25 from $18.4 million last year after network expenses. Gross profit performance was supported by the high-margin Expiry Stream. Adjusted EBITDA was $12.5 million for the quarter, up 7% from the prior year on the back of expiry-driven margin strength and prudent expense management. Tucows Domains finished fiscal '25 above guidance at $48.7 million.

Within Domains, the wholesale business was slightly up year-over-year, supported by strong growth in value-added services. Q4 revenue for the wholesale channel rose 2% year-over-year to $57 million compared to $56.1 million for Q4 of last year. Wholesale gross margin increased 7% to $16 million from $15 million last year. I'll remind investors that gross margin is reported net of network expenses. Within the wholesale channel, Domain Services gross margin was flat year-over-year at $10.1 million in Q4. Value-added services had another exceptional quarter, generating $5.8 million in gross margin for a year-over-year gain of 17%, driven by strong sales from our Expiry Stream. In Q4, the Retail segment posted modest declines in revenue and gross margin year-over-year to $9.4 million and $5.2 million, respectively.

Turning to Wavelo. Q4 revenue was $11.7 million, a 19% increase from Q4 of last year. Q4 gross profit was $6.6 million, up 7% year-over-year, supported by EchoStar renewal and rate card dynamics, and improved COGS. Wavelo's adjusted EBITDA was $3.4 million, down year-over-year from $3.7 million, primarily due to higher operating investment, most notably in sales and marketing and investment in the platform. Wavelo finished fiscal '25 at adjusted EBITDA of $17.5 million, $4.5 million above guidance.

Now shifting to Ting Internet. Q4 revenue was $18.5 million, up 18% year-over-year, supported by subscriber growth. Q4 gross profit was $1.6 million, up from negative $1.2 million in Q4 '24. Gross margin percentage decreased as a result of the shift towards partner markets, which require significantly less CapEx but have a higher associated cost of revenue than organic markets. Ting reported an adjusted EBITDA loss of $0.9 million in Q4, an improvement from $1.5 million loss in Q4 of last year.

At a corporate level, Q4 revenue was $2 million, up from $1.8 million in Q4 of last year. Q4 gross profit was negative $3.2 million compared to negative $2.2 million a year ago. Corporate adjusted EBITDA for Q4 was negative $3.9 million from a negative $1 million in Q4 '24. The TCX profitability in the quarter was primarily impacted by elevated professional fees and the mobile business commitments.

Let me now move to cash flow and balance sheet. Consolidated cash flow from operating activities was negative $2.6 million. If we break that out, Domains, Wavelo and TCX generated $4.4 million, which is typically lower than other quarters due to seasonality. Ting generated a $7 million outflow, mainly from ABS interest and working capital requirements.

We ended the quarter with cash and restricted cash of $64.2 million, down from $73.2 million in Q4 of last year. We continue to prioritize disciplined capital allocation and maintaining liquidity across the organization. Corporate net debt, excluding Ting, was $189.5 million as of quarter end, and importantly, we remained in compliance with our covenants under the TCX syndicated facility. For the fourth quarter, the leverage ratio was 3.12x and the interest coverage was 4.17x, both comfortably on site. Ting's net debt stands at $438.8 million, including the ABS notes and the preferred shares.

In summary, Q4 delivered solid broad-based revenue growth with strength across Domains, Wavelo and Ting, and gross profit supported by favorable mix. Heading into '26, we are positioned to build on this momentum and expand profitability as we normalize cost items and continue to execute on operational and capital efficiency, supported by positive operating cash from Tucows Domains and Wavelo.

With that, thank you, and I'll pass it back to Dave for his closing remarks.

Thanks, Ivan. First, I'll provide our initial outlook for fiscal 2026 for Wavelo, Tucows Domains and Corporate. This excludes guidance for Ting until we have more definitive information on the Ting strategic process. The guidance assumes business as usual operations and is subject to macro conditions and other risks described in our filings.

For Tucows Domains, we expect an adjusted EBITDA range of $47 million to $49 million. This reflects the integration and maintenance of our registry contracts and the continued, but moderated contribution from higher-margin Expiry Stream sales, which benefited from an outsized performance in 2025.

For Wavelo, we expect an adjusted EBITDA range of $14.5 million to $15.5 million. This outlook assumes a continued investment and expansion of Wavelo's product features, a modest ramp in sales and marketing spend in service of 2026 bookings conversion and accounts for the range of outcomes for the Ting Internet and Mobile subscribers currently on the platform.

For corporate, we expect an adjusted EBITDA range of negative $6 million to negative $9 million. This is primarily driven by our legacy mobile contract obligations, and we have plans to reduce those costs. To a smaller degree, corporate overhead is also factored in here, where we expect to absorb some of the corporate costs related to Ting, but which will be streamlined over time. This provides total consolidated guidance for 2026, without Ting, of a range of $52.5 million to $58.5 million.

After 25 years at Tucows, I'm coming into this role with a very clear view. This is a period of significant change and 2026 will be a year of transition. We are in the process of resetting how we operate, how we allocate capital and how we hold ourselves accountable for returns. Our shareholders want a company that is simpler to understand, more consistently cash generative and more intentional about building value per share.

I'll start by outlining my vision for Tucows, what we're building, how we'll run it and how we'll deploy capital. My leadership approach has 4 principles. First, customer-centric execution. For Tucows Domains, that means earning the right to be the trusted platform behind our resellers and partners through reliability, economics and product velocity. For Wavelo, it means proving every quarter that we're helping operators modernize and operate better, not just selling software. Our ultimate measure of success is that our customers are spending money with us.

Second, move faster and with clarity. Focus creates speed. We'll simplify our action plans and prioritize results, making it easier for teams to execute.

Third, operational excellence. We'll be decisive about what's working, what isn't, and the best path forward to leverage our strengths. We'll run the company with performance metrics that tie to customer acquisition and retention, margin and cash generation.

Fourth, financial rigor in all decision-making. Our goal is consistent, compounding value creation, growth built on a quantitative basis that includes recurring revenue, strong unit economics and disciplined capital allocation. Here's our strategy once we get to the other side of the Ting process.

We intend to transition Tucows into a capital-light business with a lean operating model. We'll leverage our technical expertise, operational capabilities and competence in scaling platform businesses to build a company that develops, acquires and operates technology services that benefit from shared infrastructure and centralized capabilities. What kind of business fits that model? One with recurring revenue with strong customer retention and a competitive moat; platform economics with consistent gross profit and scalable operations; business-critical workflows where reliability matters; and clear pathways to operational improvements through synergies. This strategy builds on what Tucows already does well, run platforms, integrate customers, serve partners at scale and improve efficiency over time.

One of the biggest restrictions for Tucows over the past several years has been our constrained ability to deploy cash strategically. And I'm going to speak plainly here. Tucows' cash needs have constrained what we could do strategically and financially across Tucows for multiple years. I have a track record of building the Domains business prudently and generating cash that has been used over the years to fund acquisitions, technology upgrades, stock buybacks and support the expansion of Tucows' other businesses. As we work through the Ting process, we will position Tucows to regain flexibility and to use that flexibility in a disciplined way. And that discipline starts with a simple, measurable priority, consistently generating free cash flow.

As we improve our capital flexibility, particularly through a more capital-light approach, we intend to translate operating performance into cash by tightly managing CapEx, maintaining cost discipline and improving working capital so we can self-fund growth, continue to deleverage and create capacity for long-term value creation. Which brings me to capital allocation. How we deploy capital, including balancing deleveraging with investment will be fundamental to future growth. We are working on a framework that will guide those decisions to maximize outcomes for shareholders, and I look forward to sharing more in the coming quarters.

Tucows has always embraced innovation, and we're working to accelerate that with AI, specifically across internal operations. Using an example, it's become a core part of how we build and maintain our code base, and we've seen adoption expand from managers to engineers. I also want to be clear about our approach. We won't overstate uncertain future benefits and we'll adopt AI in a way that protects customers, partners and the integrity of our platforms. Our approach will be practical and measurable, improving support workflows and resolution times, automating repetitive operational tasks and accelerating product delivery where it improves customer outcomes.

Let me close with this. My job is to lead Tucows into its next chapter. A more focused, more disciplined, more capital-light company built around platforms, cash generation and consistent execution. You should expect clarity from us. You should expect us to prioritize shareholder value, and you should expect us to be direct, especially when conditions are uncertain.

Thank you for your time today, for your support and for holding us to a high standard. We look forward to updating you as we execute through 2026.

If you have any questions about the quarter or today's commentary, please send them to [email protected] by February 19, and look for our recorded Q&A audio response and transcript to this call to be posted to the Tucows website on Wednesday, February 25, at approximately 5:00 p.m. Eastern time.

Welcome to Tucows Second Quarter 2025 Management Commentary. We have prerecorded prepared remarks regarding the quarter and outlook for the company. A Tucows generated transcript of these remarks with relevant links is also available on the company's website.

We will begin with opening marks from Elliott Noss, President and CEO of Tucows Inc., followed by business remarks from David Woroch, CEO of Tucows Inc.; Justin Reilly, CEO of Wavelo; Elliot Noss on Ting; Ivan Ivanov, Tucows' CFO, who will discuss our financial results in detail, and we will finish with closing remarks from Elliot Noss.

In lieu of a live question-and-answer period following these remarks, shareholders, analysts and prospective investors are invited to submit questions to Tucows management. Please send the questions by e-mail to [email protected] until Thursday, August 14, management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the Tucows website on Tuesday, August 26, at approximately 5:00 p.m. Eastern Time. We would also like to advise that the updated investor presentation and the Tucows quarterly KPI summary, which provides key metrics for all of our businesses for the last 6 quarters as well as for full year 2023, 2024 and 2025 year-to-date, and also includes historical financial results is available in the Investors section of the website.

You'll notice that we are no longer adding new owned serviceable addresses and instead, partner serviceable addresses are seeing large additions. As we monetize owned fiber network assets in certain markets, you will see some of our owned serviceable address numbers moved to partner serviceable address totals where we have sold our network assets but will remain the ISP. That was the case this quarter as addresses from certain owned markets were sold and became partner serviceable addresses. Now for management's prepared remarks. On Thursday, August 7, Tucows issued a news release reporting its financial results for the second quarter ended June 30, 2025. That news release and the company's financial statements are available on the company's website at tucows.com under the Investors section. Please note, the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially.

These risk factors are described in detail in the company's documents filed with the SEC. Specifically the most recent reports on the Forms 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable to its business. Now I would like to turn the call over to Tucows President and Chief Executive Officer, Elliott Noss. Go ahead, Elliot.

Midway through 2025, Tucow's consolidated top line growth is continuing the trend of the last 4 fiscal years and first quarter, with a 10% year-over-year increase in Q2. Gross profit grew 6% year-over-year and adjusted EBITDA increased 37% to $12.6 million in Q2 and to $26.2 million year-to-date. Our year-to-date results put us slightly ahead of pace to achieve our full year adjusted EBITDA guidance of $47 million. Outperformance in both Domains and Wavelo drove the upside more than offsetting the corporate level expenses we expect to recognize in the second half.

Corporate net debt now stands at $190.3 million, marking a fifth straight quarterly decline and bringing net leverage to 3.14x with interest coverage at 3.99x, comfortably within our covenants. Although we chose not to pay down the syndicated loan this quarter, that was a decision to preserve flexibility. Our long-standing record of steadily reducing the facility remains intact and capital allocation, whether we pay down debt or hold on to our cash for other purposes is a choice we make on a quarterly basis. We continue to navigate the path of thoughtful execution and choices of direction.

And with that, I'll turn it over to Dave Woroch, CEO of Tucows Domains.

Thanks, Elliot. Tucows Domains delivered another solid quarter in Q2 with each of revenue, gross margin and adjusted EBITDA growing year-over-year. These gains build on the year-over-year growth and momentum in Q1 and highlight the steady, predictable and reliable nature of our business. In addition, we continue to build our registry services business and are pleased to share that we recently signed a contract with Radix, a registry operator to be their technical services provider. Planning is underway with the migration to our platform expected towards the end of this year. I will talk further about this exciting news in a moment.

Revenue rose 8% year-over-year in Q2. Gross margin expanded 14% and adjusted EBITDA grew 12%. Through the first half of the year, adjusted EBITDA was $24 million and up 13% year-over-year, reflecting the operating leverage within the business within Domain Services, both wholesale and retail performed well. Wholesale revenue and margin benefited from healthy reseller demand and higher margin value-added services while retail posted steady increases in both top line and gross margin. Q2 revenue for the wholesale channel rose 8% year-over-year to $57.3 million compared to $53 million for Q2 of last year. Gross margin increased 15% to $15.7 million from $13.6 million last year.

Within the wholesale channel, Domain Services delivered gross margin of $10.4 million, up 8% from $9.6 million in Q2 2024. The value-added services had another exceptional year-over-year gain in gross margin of 32%, delivering $5.3 million this quarter, driven by strong sales from our Expiry Stream. Our retail channel saw strong growth in Q2 with revenue increasing 10% year-over-year to $10.3 million. Gross margin expanded 11% to $5.9 million reflecting higher margins in the Retail Segment.

As anticipated, total domains under management and transaction volumes declined modestly, down 2% and 3%, respectively, reflecting the continued impact of one reseller that has moved a portion of its portfolio in-house. The overall combined renewal rate for all TLDs across all the 2000 Domains brands was 75%, a slight decline from previous quarters, but within our normal historical range and above the industry average.

Turning to our growth initiatives and returning specifically to our registry services business, we continue to build this business and add new clients, both small and large. In previous quarters, I've talked about being selected by NIXI, the National Internet Exchange of India and the registry operator of the in country code TLDs, we completed the migration of NIXI's 4 million domains to our platform at the end of May as planned and scheduled.

Our engagement with Radix is equally exciting. Radix is an industry leader. They are the registry operator for a portfolio of 11 TLDs, including marquee extensions like .online, .store .tech, .site .space and .fun. Radix is widely recognized preparing great and meaningful TLDs with world-class marketing that drives broad adoption. Our teams have been collaborating and planning this project for some time now. In total, we will be migrating just over 10 million domains across the 11 Radix TLDs onto our platform towards the end of this year.

Radix has the largest market share in the NGTL segment at 20%. As I've said before, we're focused on the profitability of our business. And while we do not focus on Domains under management as a key measurement, it is worth noting that this will lift the Tucows Registry segment to managing close to 17 million domains. This contract makes Tucows the infrastructure provider of choice for 2 of the largest registries globally and positions us as a strong contender for back-end registry services in the next wave of new gTLDs with applications starting in 2026.

In summary, Tucows' Domain continues to demonstrate the strength of its core franchise, delivering consistent revenue, margin and the EBITDA gains while securing transformative contracts that help drive our long-term growth trajectory. Looking ahead, we will focus on the execution of the Radix migration the continued development of our hosting and billing initiatives, a disciplined pursuit of the new gTLD opportunities slated for 2026 and the ongoing operational excellence we are known for. Thanks for listening.

And now over to Justin Reilly, CEO of Wavelo.

Thanks, Dave. The second quarter of 2025 now marks our best quarter since inception. Surpassing the record we set just last quarter. Wavelo's revenue was $12.7 million in Q2, an 11.1% increase from last quarter and a 20.5% increase from Q2 2024. Gross margin was $12.6 million this quarter, an 11.6% increase from last quarter and a 23.6% increase from Q2 2024. Adjusted EBITDA for Q2 was $5.4 million, an increase of 20.5% quarter-over-quarter and a 37% increase from Q2 2024. The growth year-over-year and quarter-over-quarter is fueled by existing customer subscriber growth as well as the new EchoStar rate card introduced as part of the 4-year renewal at the start of 2025.

As a reminder, we experienced outsized revenue recognition annually in Q2 related to bundled professional services included as part of the platform services provided to EchoStar. Adjusting for this, revenues grew 0.9% compared to last quarter as we saw additional subscribers come on to the platform. Our Q2 results are a testament to our team's discipline and agility that we've continued to drive growth and profitability amid a dynamic macro environment on organic growth we are seeing continued momentum across Tier 1 and Tier 2 opportunities with several advancing steadily through our pipeline. We've made the conscious decision to deprioritize smaller MVNO and ISP opportunities where pricing pressure dominates and our enterprise-grade platform is underutilized.

This both frees up our small but mining sales team's time to work larger deals and rightly focuses our R&D capacity with efforts consistent with our long-term growth strategy. The pipeline now consists of two distinct customer profiles, large greenfield MVNOs and ISPs and separately established Tier 1 and Tier 2 fixed and mobile operators that are constrained by chronic vendor lock-in. The latter cohort is one that will most benefit from an AI-first future, but it's unable to access its most valuable data and is underserved by today's AI solutions, which are mostly built for a general-purpose audience, Wavelo's Event Stream and Tier 1 grade platform are perfectly positioned to help unlock this future for large operators. On inorganic growth, many of our competitors were founded in the '80s and '90s, their business models, much like their technology. Were built for an era in which large human workforce is custom tailored software for not only each operator but for each line of business.

If SaaS has started to disrupt this model, then AI will put it to bed. In the last 12 months, I've seen more businesses consider moving into a process than in the previous 3 years, largely due to aging business models and aging founders. I expect the next few years will be full of M&A as the cost to refactor old software stacks with AI races to 0. Last quarter, I talked about the important task of retraining the modern Internet workforce software engineers. I also shared that Wavelo benefits from a culture of curiosity, which acts as a tailwind in the face of generational change. For our most curious engineers, this means that more than 40% of their code is written by AI today as we roll out more powerful tools that are trained on Wavelo's code base rather than the aggregate code of the Internet, we expect adoption to increase. This is important as we've solved event-driven problems in our software that no one else has been able to solve, democratizing our expert knowledge across our engineering teams widens the aperture for efficiency and further lays the groundwork for Wave lows AI-first future.

Thanks for listening. And now over to Elliot.

Thanks, Justin. Year-over-year, Ting's top line growth and large improvement in adjusted EBITDA continued in Q2. Revenue hit $16.4 million in Q2, a 12% increase year-over-year. Growth was driven by small ARPU improvements, growth in enterprise revenue and most impactfully, an 8% increase in subscribers, taking us to 52,100 total subscribers. Ting gross margin grew from $9.8 million to $10.4 million, excluding a onetime $2.7 million noncash lease accounting adjustment. Ting's adjusted EBITDA also continues to trend in a positive direction with a small loss of $600,000 in Q2, down from $6.4 million in Q2 of 2024. As above that loss is before the noncash adjustment I mentioned. I will also start to regularly, but likely not each quarter, share information on the part of the team business that is outside of the residential fiber ISP. This includes enterprise as well as fixed environment.

Fixed wireless is primarily through our Simply Bits and Cedar acquisitions. I think this is useful for investors as it identifies a small but profitable element of the Ting business that is generally overlooked. I will refer to this as Enterprise and Other. In Q2 2025, this segment generated $3.9 million of revenue and $1.3 million in contribution margin, a $720,000 improvement year-over-year, driven by a significant reduction in people costs and continued growth in enterprise and bulk customers. We also signed a landmark contract with the third largest U.S. senior living operator that once fully online in 2027 will add 12,700 bulk units and over $6 million in annual revenue. As we flagged last quarter, we've been pursuing the sale of nonstrategic assets.

These are assets that we had previously acquired or developed where we no longer have the capital to build. To this point, we have successfully sold nonstrategic assets for a total value in excess of $15 million in three separate transactions. These transactions covered noncore assets in Arizona and in our Cedar footprint in Southwest Colorado and Northern New Mexico. We place them in the hands of those who will build fiber in those footprints as appropriate. Our transformation from building networks to a pure play ISP is increasingly visible this quarter, particularly in reduced expenses year-over-year improvements in adjusted EBITDA and serviceable address tools. In our partner markets, Memphis and Colorado Springs, our partners are now delivering addresses consistently at the expected cadence and we are head down working on improved marketing in those 2 footprints.

Last year, I spoke about pausing marketing to analyze which customer acquisition tactics delivered returns and which did not. That review is complete. And by late Q2, much of the structural work is also complete and we are now operating where we are not only again driving brand value, but also driving net adds. It is time to start building on winning tactics. Early Q3 metrics show subscriber momentum returning, and we view Q2 as the trough for net adds. Our marketing team is now fully staffed and executing at pace. And we expect the biggest near-term efficiency gains to come from applying AI tools that lower acquisition costs and improve conversion.

Comparing June of this year to January of 2024, the last full month before we started to effect change, we see dramatic improvements in key KPIs in both direct marketing and door-to-door. We see CAC per order improving by nearly 40%, with people costs in marketing being cut by over 75%. And we increased conversion from the top of the funnel significantly, and marketing content is both better and produced more efficiently. We brought door-to-door in-house and have seen orders per rep increased by 20% and cost per order reduced by nearly 40%. Door-to-door is the most important tactic in fiber-to-the-home sales, and we are limited here only by our ability to recruit Finally, we continue to see the longer-term trend towards partnership models and infrastructure markets with KKR, BlackRock, Brookfield, EQT and many other major players all leaning into separating infrastructure construction for provision of services. We see this as a validation of our pivot and a tailwind for pure-play ISP models like Ting.

Now you'll hear from our CFO, Ivan Ivanov, who will discuss our financial results in detail.

Thank you, Elliot, and thank you, everyone, for joining us today. I am pleased to report another strong quarter that demonstrates the strength and resilience of our diversified business model. The second quarter gets us firmly on the path we laid out at the start of the year of continued top line momentum, growing adjusted EBITDA and disciplined capital allocation. At the consolidated level, revenue reached $98.5 million, a 10% year-over-year increase, marking our fourth consecutive quarter of double-digit top line growth driven by strong contributions from each business unit. Gross profit rose to $22.1 million, up 6% year-over-year despite absorbing a onetime $2.7 million noncash lease expense adjustment at. Adjusted EBITDA expanded 37% to $12.6 million lifting year-to-date adjusted EBITDA to $26.2 million. That leaves us slightly ahead of the run rate required to meet our full year guidance of $47 million.

Moving to each business unit's performance highlights. The Domains business continued to drive earnings with top line revenue of $67.6 million, an increase of 8% year-over-year. Gross margin grew 14%, driven by continued strong wholesale performance as well as increased contribution from both our retail channel and value-added services, which also includes our expiry auction stream. As a result, Domain's adjusted EBITDA improved 12% on year-over-year to $12.5 million. Wavelo recorded its best quarter to date. Revenue increased 21% to $12.7 million. Gross margin increased 24% to $12.6 million and adjusted EBITDA rose 37%, reflecting the upgraded rate card with DISH subscriber growth and reduced churn along with a careful cost control across the business.

Moving on to Ting. Ting generated 13% revenue growth to $16.4 million on an 8% subscriber lift and higher ARPU. Gross margin was reduced this quarter to $7.7 million from $9.8 million in Q2 of '24 by the onetime lease expense adjustment I mentioned earlier. Excluding that item, margin will have risen but sequentially as well as year-over-year. Ting reported adjusted EBITDA loss of $3.7 million for the quarter. Excluding the impact of the noncash lease adjustment, Ting adjusted EBITDA improved by $5.5 million year-over-year. We remain hyper focused on bringing Ting's to profitability.

And finally, the Corporate segment reported revenues of $1.8 million, down slightly from $2 million a year ago, with an adjusted EBITDA loss of $1.7 million. Moving on to cash and balance sheet. During the second quarter, we generated $6.6 million in cash from operating activities and ended June with $52 million in cash and equivalents as well as an additional $16.6 million in restricted cash and secured note reserve funds. Capital expenditures remained low at $3.5 million for the quarter, consistent with our shift to partner markets in fiber and we continue to recycle capital by selling nonstrategic assets. In fact, during the second quarter, we sold property and equipment along with inventory for total proceeds of $11 million. The sale resulted in a gain of $2.1 million.

In addition, subsequent to the second quarter, we completed an additional sale of certain property and equipment and intangible assets for $7 million, generating a gain of $3.6 million, which will be reflected in the third quarter's results. Our corporate net debt as defined under our covenants fell to $190.3 million, down for the fifth consecutive quarter, giving us net leverage of 3.4x dividend and improved interest coverage of 3.99x and leaving us well inside our covenants. Separately, as of quarter end on a net basis, the Ting fiber business carried $289.6 million in asset-backed securitized notes and $122.2 million in redeemable preferred equity. Looking ahead, we have clear catalysts that give us line of sight to continued margin expansion. This includes the $10 million domain Radix migration to Tucows' domains starting in November, we loss continued momentum of growth and Ting pivot to a capital-like demand-driven model. These factors combined position us well to achieve our $47 million adjusted EBITDA goal while continuing to improve our corporate leverage.

With that, thank you. And now I'll turn it back over to Elliot.

Thank you, Ivan. We finished the first half of 2025 with the company performing in line with expectations. Domain and Wavelo are ahead of plan, while Ting continues its significant transformation. Through the first half of the year, the economy is sending mixed signals with the shape of the yield curve and the stock market telling very different stores. I can list multiple economic indicators on each side of the ledger, but we continue to view the world as one where we should be prudent and conservative. We know our balance sheet does not reflect that yet. Our focus is on improving.

Ting first half was defined by change. We reduced operating expenses by approximately 60% year-over-year. We further streamlined operations through the sale of smaller noncore footprints and simplified the business. Customer service has become more efficient while retaining industry-leading churn and high ARPU. We also completed a full reset of our marketing function after extensive testing, we're now ready to ramp spend again with a focused, efficient and data-driven approach aimed at reaching the right customers at the right time.

This marks a fundamentally different posture from a year ago. Ting's team remains one of its greatest strengths as AI reshapes how work is done, for producing marketing content to better customer experience, to improving door-to-door recruitment. We believe our smart, committed workforce gives us an edge relative to both incumbents and smaller players like ourselves. More broadly, the U.S. fiber market is transitioning from hype to hard execution, with roughly half the country still to be built, capital is consolidating. Strategies are shifting and spreadsheet assumptions are being rethought. At the same time, demand continues to grow. Cable is losing ground to both fiber on the high end and fixed wireless on the low end of the market.

While mobile convergence strategies remain prominent with only Ting actually offering a converged customer experience. And Ting customers with mobile churn 30% to 40% less. Ting stands out in this environment. Our churn is well below industry norms. Our penetration in many markets exceeds what others target long term. And our converged fiber mobile product uses mobile to drive fiber. Not the other way around. Our constraint is capital. Ting is lean, differentiated and resonating with customers, but our ability to scale is limited by our balance sheet. We are actively evaluating strategic path to unlock the value we've built and support long-term success.

And with that, I look forward to your written questions and exploring areas that interest you in greater detail. Again, please send your questions to [email protected] by August 14 and look for our recorded Q&A audio response and transcript of this call to be posted to the Tucows website on Tuesday, August 26, at approximately 5:00 p.m. Eastern time. Thank you.