Tucows (TCX) Q1 2026 Prepared Remarks earnings summary

Executive summary

• Q1 2026 consolidated net revenue rose 2% year-over-year to $96.7 million, led by Ting and Wavelo growth, with Domains margin gains.

• Gross profit increased 2.5% to $24.1 million, with margin expansion in Domains and Ting, and lower network expenses.

• Adjusted EBITDA was $11.7 million, down 15% year-over-year due to investments in Wavelo and lower corporate margins.

• Net loss widened to $18.1 million ($1.63/share), and adjusted net loss was $16.9 million ($1.51/share), mainly from professional fees, legacy mobile obligations, and higher operating expenses.

• Returned to positive operating cash flow of $3.5 million, a $14.8 million improvement from a negative $11.3 million in Q1 2025.

Financial highlights

• Domains revenue declined 2% year-over-year to $64.1 million, but gross profit grew 2% to $18.6 million.

• Wavelo revenue was $11.6 million, with gross profit of $7 million, both slightly down due to increased sales and marketing investment.

• Ting revenue surged 19% to $19.4 million, with gross profit turning positive at $1.7 million and adjusted EBITDA loss halved year-over-year.

• Corporate segment revenue flat at $1.6 million, but gross profit and adjusted EBITDA declined due to mobile contract obligations.

• Operating cash flow improved to $3.5 million, and cash and equivalents at quarter-end were $44.3 million, with total liquidity at $61.9 million.

Outlook and guidance

• Expect full benefit of Radix Registry migration in Q2, boosting wholesale segment.

• Ting divestiture process underway to improve capital flexibility and enable self-funded growth.

• Wavelo's investment in go-to-market expected to normalize as pipeline converts to growth.

• Focus remains on generating free cash flow, improving capital flexibility, and disciplined execution for the rest of 2026.

• Continued investment in AI to accelerate software development and improve operating leverage.