Tucows (TCX) Q4 2024 Prepared Remarks earnings summary

Executive summary

• Achieved fourth consecutive year of consolidated revenue growth, with 2024 adjusted EBITDA at the top end of guidance, driven by improved Ting results and strong KPIs across all segments.

• Portfolio includes domain services, platform services (Wavelo), and fiber internet (Ting), balancing cash generation with long-term growth investments.

• Q4 profitability impacted by one-time impairment and restructuring charges at Ting, but underlying metrics improved excluding these items.

• Progress made in deleveraging through cash flow from Wavelo and Domains, reducing syndicated debt.

• 23 consecutive years of revenue growth, with an 8.1% annual ROIC since going public.

Financial highlights

• Q4 2024 revenue was $93.1 million, up 7.1% year-over-year; gross profit rose 19% to $21.2 million.

• Adjusted EBITDA for Q4 grew 403% to $12.8 million; full-year adjusted EBITDA was just under $35 million.

• Q4 net loss was $45.3 million, primarily due to one-time impairment and restructuring charges; adjusted net loss was $15.8 million.

• Adjusted EPS loss was $1.43 per share for the quarter.

• Ended Q4 with $56.9 million in cash and $192.5 million in net syndicated debt (leverage ratio 3.26x).

Outlook and guidance

• 2025 consolidated adjusted EBITDA guidance is around $56 million (up 75% over 2024), or $46 million after a one-time $9 million Verizon MVNO wind-down charge.

• Segment guidance: $44 million for Domains, $13 million for Wavelo, break-even for Ting, and a $1 million loss for corporate (or $10 million loss with Verizon charge).

• Ting expected to improve from a $22 million EBITDA loss to break-even in 2025.

• Ongoing investment in fiber infrastructure and SaaS platform to drive long-term growth.

• Management commentary and outlook available via pre-recorded audio and transcript on the company website.