Tucows delivers on 2024 Adjusted EBITDA guidance and fourth consecutive year of revenue growth

Canada NewsWire

TORONTO, Feb. 13, 2025

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

"Tucows closed 2024 with strong operating revenue growth for the fourth consecutive year, showing the resilience of our business," said Elliot Noss, Tucows President and CEO. "Adjusted EBITDA for the year reached the top of our guidance range, driven in large part by Ting's improved results. While Q4 profitability was affected by an annual impairment charge for Ting and restructuring costs associated with workforce reductions, these were one-time impacts. Excluding these charges, we are seeing meaningful improvements across our key financial metrics as we continue to optimize revenue and cost efficiencies. Additionally, we made further progress in deleveraging the business, using cash flow from Wavelo and Tucows Domains to reduce our syndicated debt."

Financial Results

Consolidated net revenue for the fourth quarter of 2024 increased 7.1% to $93.1 million from $87.0 million for the fourth quarter of 2023, driven primarily by year-over-year revenue gains from Ting and Tucows Domains.

Gross profit for the fourth quarter of 2024 increased 19% to $21.2 million from $17.8 million from the fourth quarter of 2023. The increase in gross profit was due primarily driven by year-over-year gains from the Ting and Domains businesses.

Net loss for the fourth quarter of 2024 was $45.3 million, or a loss of $4.11 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(1) (loss) and Adjusted EPS(1) in Q4 2024 are ($15.8 million) and ($1.43) per share compared to Q4 2023 Adjusted net income(1) (loss) of ($22.4 million) and Adjusted EPS(1) of ($2.05) per share.

Adjusted EBITDA(1) for the fourth quarter of 2024 increased 403% to $12.8 million from $2.6 million for the fourth quarter of 2023. The year-over-year increase was primarily due to growth of revenues from Domains and Ting, and cost management in the Ting business.

Cash equivalents, restricted cash and restricted cash equivalents at the end of the fourth quarter of 2024 were $73.2 million compared with $91.1 million at the end of the third quarter of 2024 and $92.7 million at the end of the fourth quarter of 2023.

Summary Financial Results

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

 
              3 Months ended December 31                12 Months ended December 31 
              2024          2023          % Change      2024          2023          % Change 
               (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Net Revenues        93,098        86,958           7 %       362,275       339,337           7 % 
Gross Profit        21,224        17,821          19 %        83,030        66,667          25 % 
Income 
 Earned on 
 Sale of 
 Transferred 
 Assets, net         3,244         4,062        (20) %        13,978        17,033        (18) % 
Net Income 
 (Loss)           (45,287)      (23,374)        (94) %     (112,672)      (96,197)        (17) % 
Adjusted Net 
 Income 
 (Loss)(1)        (15,775)      (22,382)          30 %      (76,817)      (74,779)         (3) % 
Basic 
 earnings 
 (Loss) per 
 common 
 share              (4.11)        (2.14)        (92) %       (10.27)        (8.85)        (16) % 
Adjusted 
 Basic 
 earnings 
 (Loss) per 
 common 
 share(1)           (1.43)        (2.05)          30 %        (6.98)        (6.86)         (2) % 
 
 
1. 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. EBITDA(1) 
                 3 Months ended              3 Months ended              3 Months ended 
                  December 31                 December 31                 December 31 
                 2024          2023          2024          2023          2024          2023 
                  (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Ting Internet Services: 
Fiber Internet 
 Services              15,749        13,821        10,995         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 
 DomainServices        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       (5,989)       (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         (537)         (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        21,224        17,821        12,849         2,554 
 
 
(1) 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.

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