Tucows (TCX) investor relations material

Executive summary

• Consolidated revenue rose 2% year-over-year to $96.7 million in Q1 2026, led by Ting and Wavelo growth, though Domains revenue declined due to fewer domains under management.

• Net loss widened to $18.1 million ($1.63/share) from $15.1 million ($1.37/share) in Q1 2025, reflecting higher operating expenses and interest costs.

• Adjusted EBITDA declined 15% year-over-year to $11.7 million, impacted by increased corporate expenses, legacy mobile obligations, and Wavelo investments.

• Positive operating cash flow of $3.5 million, reversing a negative $11.3 million in Q1 2025.

• Strategic review and divestiture process for Ting underway to improve capital flexibility and focus on core scalable businesses.

Financial highlights

• Gross profit for Q1 2026 was $24.1 million, up from $23.5 million in Q1 2025, with improved margins and lower network expenses.

• Total cost of revenues increased 2% to $72.5 million, mainly from Ting subscriber growth and new construction costs.

• Cash and equivalents at quarter-end were $44.3 million, with total liquidity (including restricted and reserve funds) at $61.9 million.

• Interest expense for Q1 2026 was $14.2 million, reflecting higher debt balances.

• Net cash from operating activities improved to $3.5 million from $(11.3) million year-over-year.

Outlook and guidance

• Management is reviewing strategic alternatives for Ting due to ongoing capital needs and a Return Breach event on preferred units.

• Focus on scaling Domains and Wavelo, leveraging recurring revenue and margin strength, with continued investment in Wavelo's go-to-market efforts.

• Divestiture of Ting expected to enable self-funded growth, deleveraging, and long-term value creation.

• Continued emphasis on operational efficiency, AI-driven product enhancements, and disciplined capital allocation.

• No formal changes to risk factors or forward-looking statements, but ongoing risks related to debt, competition, and market conditions are highlighted.