Momentum Continues in Q2 as Tucows Reports Growth in Revenue and Profitability

Rhea-AI Summary

Tucows (NASDAQ: TCX) reported strong Q2 2025 financial results, with revenue growing 10.1% to $98.5 million compared to Q2 2024. The company demonstrated growth across all three business segments - Ting Internet Services, Wavelo Platform Services, and Tucows Domain Services.

Key highlights include a 37% increase in Adjusted EBITDA to $12.6 million, a 6.2% rise in gross profit to $22.1 million, and improved net loss position of $15.6 million ($1.41 per share) compared to $18.6 million loss in Q2 2024. The company's cash position strengthened to $68.6 million, up from $52.2 million year-over-year.

The company's strategic shift to a capital-light model at Ting, combined with margin expansion in Wavelo and Tucows Domains, contributed to improved operational efficiency despite a one-time lease adjustment impact.

Positive

• Revenue growth of 10.1% year-over-year to $98.5 million
• Adjusted EBITDA increased 37% to $12.6 million
• Cash position improved to $68.6 million from $52.2 million YoY
• Net loss decreased by 16% year-over-year
• Strong performance across all three business segments
• Successful implementation of capital-light model at Ting

Negative

• Net loss of $15.6 million despite revenue growth
• One-time lease adjustment negatively impacted Ting's gross margin
• Income earned on sale of transferred assets declined 7%
• Interest expense increased to $13.6 million from $12.5 million YoY

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On the day this news was published, TCX gained 10.10%, reflecting a significant positive market reaction. Argus tracked a peak move of +4.9% during that session. Our momentum scanner triggered 8 alerts that day, indicating moderate trading interest and price volatility. This price movement added approximately $21M to the company's valuation, bringing the market cap to $225M at that time.

Data tracked by StockTitan Argus on the day of publication.

TORONTO, Aug. 7, 2025 /PRNewswire/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC), a global internet services leader, today reported its unaudited financial results for the second quarter ended June 30, 2025. All figures are in U.S. dollars.

"Q2 showed good progress in all three businesses," said Elliot Noss, President & CEO of Tucows. "Revenue grew 10% on the back of across-the-board topline gains, with Wavelo and Tucows Domains coming in ahead of plan. Gross profit rose 6%, and net of a one-off fiber-lease expense at Ting—each business continued the robust year-over-year margin expansion we saw in Q1. Most importantly, our ongoing work to improve capital and operational efficiency, including Ting's pivot to a capital-light model, helped drive a 37% jump in Adjusted EBITDA, highlighting our improved economics. This put our mid-year Adjusted EBITDA slightly ahead of progress towards our 2025 guidance."

Financial Results

Consolidated net revenue for the second quarter of 2025 increased 10.1% to $98.5 million from $89.4 million for the second quarter of 2024, driven by strong year-over-year revenue gains from all three Tucows businesses.

Gross profit for the second quarter of 2025 increased 6.2% to $22.1 million from $20.8 million from the second quarter of 2024. The increase in gross profit was driven by strong year-over-year margin gains from Wavelo and Tucows Domains, but was offset by a decrease in gross margin from Ting, due to a one-time, non-cash lease adjustment resulting from a revision to lease payment recognition periods for certain contracts.

Net loss for the second quarter of 2025 decreased to $15.6 million, or a loss of $1.41 per share, compared to a net loss of $18.6 million, or a loss of $1.70 per share, for the second quarter of 2024, reflecting improved operational efficiency and revenue momentum. Adjusted net income¹ (loss) and Adjusted EPS¹ in Q2 2025 are ($16.3 million) and ($1.47) per share compared to Q2 2024 Adjusted net income¹  (loss) of ($17.8 million) and Adjusted EPS¹ of ($1.63) per share.

Adjusted EBITDA¹ for the second quarter of 2025 grew 37% to $12.6 million from $9.2 million for the second quarter of 2024. The year-over-year improvement was fueled by revenue growth across all three segments: margin expansion from Wavelo and Tucows Domains, Ting's shift to a capital-light model, and rigorous cost discipline and AI-driven efficiencies across the Company.

We ended the second quarter of 2025 with cash and cash equivalents, and restricted cash and restricted cash equivalents of $68.6 million. This compares with $55.0 million at the end of the first quarter of 2025 and $52.2 million at the end of the second quarter of 2024.

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

	3 Months ended June 30			6 Months ended June 30
	2025 (unaudited)	2024 (unaudited)	% Change (unaudited)	2025 (unaudited)	2024 (unaudited)	% Change (unaudited)
Net Revenues	98,463	89,423	10 %	193,072	176,880	9 %
Gross Profit2	22,110	20,810	6 %	45,641	39,126	17 %
Income Earned on Sale of Transferred Assets, net	3,112	3,357	(7) %	5,853	6,978	(16) %
Net Income (Loss)2	(15,637)	(18,604)	16 %	(30,770)	(45,088)	32 %
Adjusted Net Income (Loss)¹	(16,277)	(17,835)	9 %	(31,187)	(41,215)	24 %
Basic earnings (Loss) per common share	(1.41)	(1.70)	17 %	(2.79)	(4.12)	32 %
Adjusted Basic earnings (Loss) per common share¹	(1.47)	(1.63)	10 %	(2.82)	(3.77)	25 %
Adjusted EBITDA¹	12,577	9,178	37 %	26,248	13,380	96 %
Net cash provided by (used in) operating activities	6,566	(4,707)	239 %	(4,685)	(10,386)	55 %

1 Non-GAAP financial measures are described below and reconciled to GAAP measures in the accompanying tables.

2 Gross profit and Net Income (Loss) for Q2 2025 includes a one-time, immaterial, non-cash increase in lease expense of $2.7 million related to a lease accounting adjustment for certain long-term network access agreements.

Summary of Revenues, Gross Profit and Adjusted EBITDA
(In Thousands of US Dollars)

	Revenue		Gross Profit		Adj. EBITDA¹
	3 Months ended June 30		3 Months ended June 30		3 Months ended June 30
	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)
Ting Internet Services:
Fiber Internet Services	16,410	14,571	7,7042	9,818	(3,651)2	(6,442)
Wavelo Platform Services:
Platform Services	12,656	10,495	12,561	10,163
Other Professional Services	0	6	0	(1)
Total Wavelo Platform Services	12,656	10,501	12,561	10,162	5,360	3,911
Tucows Domain Services:
Wholesale
Domain Services	51,557	48,504	10,365	9,583
Value Added Services	5,757	4,524	5,300	4,004
Total Wholesale	57,314	53,028	15,665	13,587
Retail	10,290	9,340	5,895	5,282
Total Tucows Domain Services	67,604	62,368	21,560	18,869	12,543	11,217
Corporate:
Mobile Services and Eliminations	1,793	1,983	(2,431)	(754)	(1,675)	492
Network Expenses:
Network, other costs	n/a	n/a	(6,023)	(6,862)	n/a	n/a
Network, depreciation of property and equipment	n/a	n/a	(10,460)	(10,057)	n/a	n/a
Network, amortization of intangible assets	n/a	n/a	(366)	(366)	n/a	n/a
Network, impairment	n/a	n/a	(435)	0	n/a	n/a
Total Network Expenses	n/a	n/a	(17,284)	(17,285)	n/a	n/a
Total	98,463	89,423	22,1102	20,810	12,5772	9,178

1 Non-GAAP financial measures are described below and reconciled to GAAP measures in the accompanying tables.

2Ting's gross margin for Q2 2025 includes a one-time, immaterial, non-cash increase in lease expense of $2.7 million related to a lease accounting adjustment for certain long-term network access agreements.

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.

The following table reconciles net income (loss) to Adjusted EBITDA (in thousands of US dollars):

	3 Months ended June 30		6 Months ended June 30
	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)
Net income (Loss) for the period**	(15,637)	(18,604)	(30,770)	(45,088)
Less:
Provision (recovery) for income taxes	2,265	1,220	4,431	2,994
Depreciation of property and equipment	10,539	10,173	20,999	20,160
Impairment of property and equipment	435	-	639	53
Loss (gain) on disposition of property and equipment	(1,788)	-	(1,788)	-
Amortization of intangible assets	1,115	1,201	2,321	2,880
Interest expense, net	13,621	12,553	27,234	24,432
Stock-based compensation	1,386	1,702	2,891	3,575
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities	(72)	164	(441)	554
Acquisition and transition costs*	713	769	732	3,820
Adjusted EBITDA	12,577	9,178	26,248	13,380

* Acquisition and transition costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.

** Net Income (Loss) for Q2 2025 includes a one-time, immaterial, non-cash increase in lease expense of $2.7 million related to a lease accounting adjustment for certain long-term network access agreements.

Adjusted Net Income and Adjusted Basic Earnings Per Common Share (Adjusted EPS)

The Company believes that the provision of this supplemental non-GAAP measure allows investors to best evaluate our operating results and understand the operating trends of our core business without the effect of acquisition and transition costs, impairment expenses and losses on extinguishment of debt. Acquisition and transition costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments. Since adjusted net income and adjusted EPS are non-GAAP financial performance measures, the Company's calculation of adjusted net income and adjusted EPS 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.

The Company's adjusted net income and adjusted EPS definitions exclude from the calculation of reported GAAP net income and GAAP EPS, the effect of the following items: impairment of property and expenses, acquisition and transition costs (including restructuring charges) and loss on debt extinguishment.

The following table reconciles adjusted net income and adjusted EPS to GAAP net income (In thousands of US dollars, except Per Share data):

	3 Months ended June 30		6 Months ended June 30
	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)
Net Income (Loss) for the period**	(15,637)	(18,604)	(30,770)	(45,088)
Less:
Acquisition and transition costs*	713	769	732	3,820
Impairment of property and equipment	435	0	639	53
Loss (gain) on disposition of property and equipment	(1,788)	0	(1,788)	0
Adjusted Net Income (Loss)¹ for the period	(16,277)	(17,835)	(31,187)	(41,215)
Adjusted Basic Earnings (Loss) Per Common Share¹	(1.47)	(1.63)	(2.82)	(3.77)

* Acquisition and transition costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.

** Net Income (Loss) for Q2 2025 includes a one-time, immaterial, non-cash increase in lease expense of $2.7 million related to a lease accounting adjustment for certain long-term network access agreements.

Management Commentary

Concurrent with the dissemination of its quarterly financial results news release at 5:05 p.m. ET on Thursday, August 7, 2025, management's pre-recorded audio commentary (and transcript), discussing the quarter and outlook for the Company will be posted to the Tucows website at http://www.tucows.com/investors/financials.

Following management's prepared commentary, for the subsequent seven days, until Thursday, August 14, 2025, shareholders, analysts and prospective investors can submit questions to Tucows' management at ir@tucows.com. Management will post responses to questions in an audio recording and transcript to the Company's website at http://www.tucows.com/investors/financials, on Tuesday, August 26, 2025, at approximately 5 p.m. ET. All questions will receive a response, however, questions of a more specific nature may be responded to directly.

About Tucows

Tucows helps connect more people to the benefit of internet access through communications service technology, domain services, and fiber-optic internet infrastructure. Ting (https://ting.com) delivers fixed fiber Internet access with outstanding customer support. Wavelo (https://wavelo.com) is a telecommunications software suite for service providers that simplifies the management of mobile and internet network access; provisioning, billing and subscription; developer tools; and more. Tucows Domains (https://tucowsdomains.com) manages approximately 24 million domain names and millions of value-added services through a global reseller network of over 35,000 web hosts and ISPs. Hover (https://hover.com) makes it easy for individuals and small businesses to manage their domain names and email addresses. More information can be found on Tucows' corporate website (https://tucows.com).

Tucows, Ting, Wavelo, and Hover are registered trademarks of Tucows Inc. or its subsidiaries.

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our expectations regarding our future financial results and, including, without limitation, our expectations regarding our ability to realize synergies from the Enom acquisition and our expectation for growth of Ting Internet. These statements are based on management's current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Information about other potential factors that could affect Tucows' business, results of operations and financial condition is included in the Risk Factors sections of Tucows' filings with the Securities and Exchange Commission. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements are based on information available to Tucows as of the date they are made. Tucows assumes no obligation to update any forward-looking statements, except as may be required by law.

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SOURCE Tucows Inc.

FAQ

What were Tucows (TCX) key financial results for Q2 2025?

Tucows reported Q2 2025 revenue of $98.5 million (up 10.1%), Adjusted EBITDA of $12.6 million (up 37%), and a net loss of $15.6 million ($1.41 per share).

How did Tucows (TCX) individual business segments perform in Q2 2025?

All three segments showed growth: Ting Internet Services revenue reached $16.4M, Wavelo Platform Services hit $12.7M, and Tucows Domain Services achieved $67.6M.

What is Tucows (TCX) current cash position as of Q2 2025?

Tucows ended Q2 2025 with $68.6 million in cash and cash equivalents, up from $55.0 million in Q1 2025 and $52.2 million in Q2 2024.

How has Tucows (TCX) capital-light model affected its performance?

The capital-light model at Ting contributed to a 37% increase in Adjusted EBITDA and improved operational efficiency across the company.

What caused the decrease in Ting's gross margin for Tucows (TCX) in Q2 2025?

A one-time, non-cash lease adjustment of $2.7 million related to lease payment recognition periods for certain contracts impacted Ting's gross margin.