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Tucows Reports Narrower Y/Y Loss, Robust EBITDA Growth in Q3
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Shares of Tucows Inc. (TCX - Free Report) have gained 15.1% since reporting results for the third quarter of 2025. This compares with the S&P 500 index’s 5.4% decline over the same time frame. Over the past month, the stock has risen 22.9% compared with the S&P 500’s 7.1% fall.
Earnings & Revenue Performance
In the third quarter of 2025, Tucows’ consolidated net revenues rose 6.8% to $98.6 million from $92.3 million a year earlier, while gross profit climbed 9% to $24.2 million, reflecting broad-based strength across Tucows’ Domains, Wavelo Services and Ting Internet Services.
The adjusted net loss improved 20% year over year to $15.8 million, with adjusted EPS narrowing to a loss of $1.42 from $1.81. Adjusted EBITDA jumped 53% year over year to $13.3 million, underscoring the operating leverage management has been targeting.
Tucows’ Domains and Wavelo Services have been the primary earnings engines. Tucows’ Domains revenues increased 5% year over year to $67.8 million, with the gross margin rising 7% and segment adjusted EBITDA advancing 5% to $12.1 million.
Within Tucows’ Domains, wholesale revenues rose 5% to $58 million, supported by a 21% jump in the gross margin from higher-margin Value Added Services, particularly the expiry stream. Retail revenues grew 2%, with a flat gross margin of $5.5 million. Total domains under management and transaction volumes fell 9% and 10%, respectively, reflecting a previously disclosed bulk portfolio migration by one wholesale customer. Still, renewal rates of about 74% across all TLDs remained within historical ranges and above industry averages.
Wavelo Services again delivered robust growth, with revenues of $11.9 million rising almost 18% from the year-ago quarter and the gross margin expanding 17.5%. Adjusted EBITDA grew 25% to $4.3 million, and the gross margin represented roughly 99% of revenues, highlighting the capital-light nature of the software platform.
Ting Internet Services posted revenues of $17 million, up 11% year over year, helped in part by the ramp-up of a large senior living community. Ting Internet Services’ adjusted EBITDA loss narrowed sharply to $0.9 million from $5.1 million a year earlier, although the gross margin slipped to $10.5 million from $11 million as partner markets, where network lease costs are higher, accounted for a larger share of the total revenues.
Management Commentary
Management emphasized that the quarter demonstrates the operating leverage emerging from the portfolio. CFO Ivan Ivanov highlighted 7% revenue growth, 9% gross profit expansion and a 53% jump in adjusted EBITDA as evidence that the business is becoming “simpler and healthier,” aided by AI-driven efficiencies, cost discipline and Ting Internet Services’s capital-light pivot.
Domain CEO David Woroch pointed to continued margin expansion, especially in Value Added Services and registry operations, and reiterated confidence in the diversified reseller base despite temporary pressure from the customer portfolio migration. Wavelo Services CEO Justin Reilly described strong top-of-funnel activity, including more RFIs and RFPs as operators look for alternatives to legacy BSS/OSS platforms, even as procurement cycles lengthen. Management is selectively focusing on larger, transformational opportunities and leveraging systems integrator partnerships to scale distribution and delivery.
Factors Influencing the Headline Numbers
Several non-operating items shaped the third-quarter results. The company recorded a $10.9-million non-cash impairment charge at Ting Internet Services related to revalued inventory and warehouse lease right-of-use assets, part of the ongoing effort to streamline its asset base as Ting Internet Services completes its transition to a capital-light ISP model. This charge affected GAAP net income but is excluded from adjusted metrics.
Tucows also recognized about $4 million in gains on asset sales in the quarter, tied to the recycling of non-strategic fiber assets, including a portion of the Cedar footprint in Colorado. Year to date, divestitures have generated $20.8 million in gross proceeds on $15 million of net book value, producing gains of $5.8 million.
On the financing side, corporate net debt declined for the sixth consecutive quarter, with a further $2.5-million repayment on the syndicated bank loan bringing corporate net debt to $189.6 million. Management reported net leverage below 3X and interest coverage of 4.2X, comfortably inside covenants. Cash and restricted cash totaled $70.8 million at the quarter-end, up from $68.6 million in the prior quarter.
Guidance & Capital Allocation
Tucows reiterated its 2025 financial guidance, anchored by a target of $47 million in adjusted EBITDA. With $39.5 million generated through the first three quarters, management believes that it is “well on track” to meet that goal. The company continues to emphasize capital efficiency. Ting Internet Services’ partner-led builds are reducing capital intensity, while proceeds from asset divestitures are being used to recycle capital and support deleveraging.
In addition, Ting Internet Services elected to defer the preferred return owed to its infrastructure partner, Generate, for two quarters, with $9.5 million of payment-in-kind added to the balance of redeemable preferred units, preserving cash in the near term.
Management also highlighted a prioritized capital-allocation framework that balances debt reduction, reinvestment in core businesses and potential share buybacks.
Other Developments
Tucows has moved into a formal process to review options for Ting Internet Services, including a potential sale. Management noted that any sale is unlikely to generate significant profit, given Ting Internet Services’ asset-based debt and preferred share obligations, but believes that divesting the fiber ISP will allow the company to focus more squarely on its capital-light Tucows’ Domains and Wavelo Services platforms.
The third quarter also marked a significant leadership transition. Effective Nov. 6, 2025, long-time executive David Woroch was appointed president and CEO, succeeding Elliot Noss after roughly 25 years in the role. Noss will remain on the board and serve as a consultant to the Ting Internet Services business during the strategic review. Management framed the succession as a natural evolution that preserves Tucows’ culture and long-term strategic focus, while it navigates the next phase of its portfolio reshaping.
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Tucows Reports Narrower Y/Y Loss, Robust EBITDA Growth in Q3
Shares of Tucows Inc. (TCX - Free Report) have gained 15.1% since reporting results for the third quarter of 2025. This compares with the S&P 500 index’s 5.4% decline over the same time frame. Over the past month, the stock has risen 22.9% compared with the S&P 500’s 7.1% fall.
Earnings & Revenue Performance
In the third quarter of 2025, Tucows’ consolidated net revenues rose 6.8% to $98.6 million from $92.3 million a year earlier, while gross profit climbed 9% to $24.2 million, reflecting broad-based strength across Tucows’ Domains, Wavelo Services and Ting Internet Services.
The adjusted net loss improved 20% year over year to $15.8 million, with adjusted EPS narrowing to a loss of $1.42 from $1.81. Adjusted EBITDA jumped 53% year over year to $13.3 million, underscoring the operating leverage management has been targeting.
Tucows Inc. Price, Consensus and EPS Surprise
Tucows Inc. price-consensus-eps-surprise-chart | Tucows Inc. Quote
Other Key Business Metrics
Tucows’ Domains and Wavelo Services have been the primary earnings engines. Tucows’ Domains revenues increased 5% year over year to $67.8 million, with the gross margin rising 7% and segment adjusted EBITDA advancing 5% to $12.1 million.
Within Tucows’ Domains, wholesale revenues rose 5% to $58 million, supported by a 21% jump in the gross margin from higher-margin Value Added Services, particularly the expiry stream. Retail revenues grew 2%, with a flat gross margin of $5.5 million. Total domains under management and transaction volumes fell 9% and 10%, respectively, reflecting a previously disclosed bulk portfolio migration by one wholesale customer. Still, renewal rates of about 74% across all TLDs remained within historical ranges and above industry averages.
Wavelo Services again delivered robust growth, with revenues of $11.9 million rising almost 18% from the year-ago quarter and the gross margin expanding 17.5%. Adjusted EBITDA grew 25% to $4.3 million, and the gross margin represented roughly 99% of revenues, highlighting the capital-light nature of the software platform.
Ting Internet Services posted revenues of $17 million, up 11% year over year, helped in part by the ramp-up of a large senior living community. Ting Internet Services’ adjusted EBITDA loss narrowed sharply to $0.9 million from $5.1 million a year earlier, although the gross margin slipped to $10.5 million from $11 million as partner markets, where network lease costs are higher, accounted for a larger share of the total revenues.
Management Commentary
Management emphasized that the quarter demonstrates the operating leverage emerging from the portfolio. CFO Ivan Ivanov highlighted 7% revenue growth, 9% gross profit expansion and a 53% jump in adjusted EBITDA as evidence that the business is becoming “simpler and healthier,” aided by AI-driven efficiencies, cost discipline and Ting Internet Services’s capital-light pivot.
Domain CEO David Woroch pointed to continued margin expansion, especially in Value Added Services and registry operations, and reiterated confidence in the diversified reseller base despite temporary pressure from the customer portfolio migration. Wavelo Services CEO Justin Reilly described strong top-of-funnel activity, including more RFIs and RFPs as operators look for alternatives to legacy BSS/OSS platforms, even as procurement cycles lengthen. Management is selectively focusing on larger, transformational opportunities and leveraging systems integrator partnerships to scale distribution and delivery.
Factors Influencing the Headline Numbers
Several non-operating items shaped the third-quarter results. The company recorded a $10.9-million non-cash impairment charge at Ting Internet Services related to revalued inventory and warehouse lease right-of-use assets, part of the ongoing effort to streamline its asset base as Ting Internet Services completes its transition to a capital-light ISP model. This charge affected GAAP net income but is excluded from adjusted metrics.
Tucows also recognized about $4 million in gains on asset sales in the quarter, tied to the recycling of non-strategic fiber assets, including a portion of the Cedar footprint in Colorado. Year to date, divestitures have generated $20.8 million in gross proceeds on $15 million of net book value, producing gains of $5.8 million.
On the financing side, corporate net debt declined for the sixth consecutive quarter, with a further $2.5-million repayment on the syndicated bank loan bringing corporate net debt to $189.6 million. Management reported net leverage below 3X and interest coverage of 4.2X, comfortably inside covenants. Cash and restricted cash totaled $70.8 million at the quarter-end, up from $68.6 million in the prior quarter.
Guidance & Capital Allocation
Tucows reiterated its 2025 financial guidance, anchored by a target of $47 million in adjusted EBITDA. With $39.5 million generated through the first three quarters, management believes that it is “well on track” to meet that goal. The company continues to emphasize capital efficiency. Ting Internet Services’ partner-led builds are reducing capital intensity, while proceeds from asset divestitures are being used to recycle capital and support deleveraging.
In addition, Ting Internet Services elected to defer the preferred return owed to its infrastructure partner, Generate, for two quarters, with $9.5 million of payment-in-kind added to the balance of redeemable preferred units, preserving cash in the near term.
Management also highlighted a prioritized capital-allocation framework that balances debt reduction, reinvestment in core businesses and potential share buybacks.
Other Developments
Tucows has moved into a formal process to review options for Ting Internet Services, including a potential sale. Management noted that any sale is unlikely to generate significant profit, given Ting Internet Services’ asset-based debt and preferred share obligations, but believes that divesting the fiber ISP will allow the company to focus more squarely on its capital-light Tucows’ Domains and Wavelo Services platforms.
The third quarter also marked a significant leadership transition. Effective Nov. 6, 2025, long-time executive David Woroch was appointed president and CEO, succeeding Elliot Noss after roughly 25 years in the role. Noss will remain on the board and serve as a consultant to the Ting Internet Services business during the strategic review. Management framed the succession as a natural evolution that preserves Tucows’ culture and long-term strategic focus, while it navigates the next phase of its portfolio reshaping.