Tucows Delivers Strong Results in Q3 And Reiterates Full-Year Financial Guidance

Rhea-AI Summary

Tucows (NASDAQ: TCX) reported Q3 2025 results on November 6, 2025. Consolidated net revenue was $98.6M (up 6.8% YoY) and gross profit was $24.2M (up 9% YoY). Q3 GAAP net loss was $23.0M (loss per share $2.08); adjusted net loss improved to $15.8M (adjusted EPS $(1.42)). Adjusted EBITDA rose 53% YoY to $13.3M for Q3 and year-to-date Adjusted EBITDA reached $39.5M. Cash and equivalents were $70.8M at quarter end. Management reiterated full-year 2025 guidance and highlighted margin expansion at Wavelo and Domains plus Ting's shift to a capital-light model.

Positive

• Q3 Adjusted EBITDA +53% to $13.3M
• YTD Adjusted EBITDA +79% to $39.5M
• Adjusted net loss improved 20% YoY to $(15.8M) in Q3

Negative

• Cash and equivalents down from $91.1M to $70.8M (~22%)
• Large impairment expense of $10.9M recorded in Q3
• GAAP net loss remained substantial at $23.0M for Q3

Insights

Equity analyst

Tucows shows clear operational improvement: revenue and gross profit growth with a large 53% rise in Adjusted EBITDA, though GAAP losses persist.

Revenue rose to 98.6 million in Q3 2025, up 6.8% year‑over‑year, and gross profit grew 9% to 24.2 million. Adjusted EBITDA expanded sharply to 13.3 million (a 53% increase), driven by margin gains at Wavelo and Tucows Domains, and a capital‑light shift at Ting; these items explain the operating leverage management highlights.

Risks and dependencies include the continued gap between improved non‑GAAP results and a GAAP net loss of (23.0) million, the year‑over‑year decline in cash from 91.1 million to 70.8 million, and sensitivity to the successful execution of stated efficiency and AI initiatives. Watch management’s posted commentary and Q&A timeline: prepared remarks on November 6, 2025, question submission open until November 13, 2025, and posted responses on November 25, 2025. These items will clarify whether Adjusted EBITDA momentum translates to sustained GAAP profitability and cash improvement over the coming quarters.

TORONTO, Nov. 6, 2025 /PRNewswire/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC), a global internet services leader, today reported its unaudited financial results for the third quarter ended September 30, 2025. All figures are in U.S. dollars.

"We're seeing the operating leverage we've been working toward," said Ivan Ivanov, CFO of Tucows. "Broad‑based topline growth, strong economics at Wavelo, continued margin expansion from Domains, and a more capital‑efficient Ting combined to deliver a 53% increase in Adjusted EBITDA on 9% gross‑profit growth. This puts our year-to-date consolidated Adjusted EBITDA of $39.5 million slightly ahead of progress towards our 2025 guidance. The business is becoming simpler and healthier, and we have a clear line of sight to further improvement with initiatives underway to deliver value for Tucows' shareholders."

Financial Results

Consolidated net revenue for the third quarter of 2025 increased 6.8% to $98.6 million from $92.3 million for the third quarter of 2024, driven by revenue gains from all three Tucows businesses.

Gross profit for the third quarter of 2025 increased 9% to $24.2 million from $22.2 million from the third quarter of 2024. The increase in gross profit was driven by strong year-over-year margin gains from Wavelo and Tucows Domains.

Net loss for the third quarter was $23.0 million ($2.08 per share), compared with a net loss of $22.3 million ($2.03 per share) in Q3 2024. Adjusted net loss¹ was $15.8 million (adjusted EPS¹ of $(1.42)) in Q3 2025 versus $19.8 million (adjusted EPS¹ of $(1.81)) in Q3 2024.

Adjusted EBITDA¹ for the third quarter of 2025 grew 53% to $13.3 million from $8.7 million for the third 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 cost discipline and AI-driven efficiencies across the Company.

We ended the third quarter of 2025 with cash and cash equivalents, and restricted cash and restricted cash equivalents of $70.8 million. This compares with $68.6 million at the end of the second quarter of 2025 and $91.1 million at the end of the third quarter of 2024.

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

	3 Months ended September 30			9 Months ended September 30
	2025 (unaudited)	2024 (unaudited)	% Change (unaudited)	2025 (unaudited)	2024 (unaudited)	% Change (unaudited)
Net Revenues	98,558	92,297	7 %	291,630	269,177	8 %
Gross Profit	24,181	22,188	9 %	69,822	61,314	14 %
Income Earned on Sale of Transferred Assets, net	3,020	3,853	(22) %	8,873	10,831	(18) %
Net Income (Loss)	(23,019)	(22,297)	(3) %	(53,789)	(67,385)	20 %
Adjusted Net Income (Loss)¹	(15,788)	(19,827)	20 %	(46,979)	(61,042)	23 %
Basic earnings (Loss) per common share	(2.08)	(2.03)	(2) %	(4.87)	(6.15)	21 %
Adjusted Basic earnings (Loss) per common share¹	(1.42)	(1.81)	21 %	(4.25)	(5.57)	24 %
Adjusted EBITDA¹	13,269	8,688	53 %	39,517	22,068	79 %
Net cash provided by (used in) operating activities	1,534	(4,564)	134 %	(3,151)	(14,950)	79 %

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

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

	Revenue		Gross Profit 2		Adj. EBITDA¹
	3 Months ended September 30		3 Months ended September 30		3 Months ended September 30
	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)
DOMAINS AND WAVELO SERVICES
Tucows Domain Services:
Wholesale
Domain Services	51,888	49,871
Value Added Services	6,107	5,175
Total Wholesale	57,995	55,046
Retail	9,842	9,669
Total Tucows Domain Services	67,837	64,715	19,105	17,843	12,097	11,529
Wavelo Services:
Platform Services	11,856	10,075
Other Professional Services	0	7
Total Wavelo Platform Services	11,856	10,082	7,674	6,150	4,285	3,429
Total Domains and Wavelo Services	79,693	74,797	26,779	23,993	16,382	14,958
TING INTERNET SERVICES
Fiber Internet Services	16,976	15,310	339	(578)	(882)	(5,070)
CORPORATE & OTHER
Mobile Services and Eliminations	1,889	2,190	(2,937)	(1,227)	(2,231)	(1,200)
Total	98,558	92,297	24,181	22,188	13,269	8,688

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

2 Beginning in the third quarter of 2025, the Company revised its presentation of segment gross profit to reflect amounts net of network expenses. This change provides a more consistent view of segment-level profitability and aligns with how management evaluates operating performance. The revision did not impact gross profit, Adjusted EBITDA or revenue.

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 September 30		9 Months ended September 30
	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)
Net income (Loss) for the period	(23,019)	(22,297)	(53,789)	(67,385)
Less:
Provision (recovery) for income taxes	2,456	3,074	6,887	6,068
Depreciation of property and equipment	10,405	9,526	31,404	29,686
Impairment of property and equipment	10,885	852	11,524	905
Loss (gain) on disposition of property and equipment	(3,965)	-	(5,753)	-
Amortization of intangible assets	1,072	1,209	3,393	4,089
Interest expense, net	13,901	13,095	41,135	37,527
Stock-based compensation	1,387	1,808	4,278	5,383
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities	(164)	(197)	(601)	357
Acquisition and transition costs*	311	1,618	1,039	5,438
Adjusted EBITDA	13,269	8,688	39,517	22,068

* 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.

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 September 30		9 Months ended September 30
	2025 (unaudited)	2024 (unaudited)	2025 (unaudited)	2024 (unaudited)
Net Income (Loss) for the period	(23,019)	(22,297)	(53,789)	(67,385)
Less:
Acquisition and transition costs*	311	1,618	1,039	5,438
Impairment of property and equipment	10,885	852	11,524	905
Loss (gain) on disposition of property and equipment	(3,965)	0	(5,753)	0
Adjusted Net Income (Loss)¹ for the period	(15,788)	(19,827)	(46,979)	(61,042)
Adjusted Basic Earnings (Loss) Per Common Share¹	(1.42)	(1.81)	(4.25)	(5.57)

* 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.

Management Commentary

Concurrent with the dissemination of its quarterly financial results news release at 5:05 p.m. ET on Thursday, November 6, 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, November 13, 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, November 25, 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 over 22 million domain names and millions of value-added services through a global reseller network of over 33,000 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.

View original content to download multimedia:https://www.prnewswire.com/news-releases/tucows-delivers-strong-results-in-q3-and-reiterates-full-year-financial-guidance-302607848.html

SOURCE Tucows Inc.

FAQ

What were Tucows (TCX) Q3 2025 revenue and gross profit figures?

Q3 2025 net revenue was $98.6M and gross profit was $24.2M.

How much did Tucows (TCX) Adjusted EBITDA change in Q3 2025?

Tucows reported Q3 2025 Adjusted EBITDA of $13.3M, a 53% increase year-over-year.

Did Tucows (TCX) report a GAAP profit in Q3 2025?

No. Tucows reported a GAAP net loss of $23.0M (loss per share $2.08) for Q3 2025.

How did Tucows (TCX) cash balances change by Q3 2025?

Cash and restricted cash totaled $70.8M at September 30, 2025, down from $91.1M a year earlier.

What drove Tucows' margin improvement in Q3 2025?

Management cited margin expansion from Wavelo and Domains, Ting's capital-light shift, and AI-driven efficiencies.

Did Tucows (TCX) change its segment presentation in Q3 2025?

Yes. Beginning Q3 2025, segment gross profit is presented net of network expenses to align with management's view of profitability.