Tucows Inc. (NASDAQ: TCX) reports Q2 2026 net loss amid high debt load
Tucows Inc. reported net revenues of 100,556 and 197,213 for the three and six months ended June 30, 2026 (dollar amounts in thousands of U.S. dollars), while recording net losses of 20,471 and 38,578 over the same periods. Gross profit rose relative to the prior year periods, but higher operating expenses and interest expense of 14,450 and 28,315 kept results in a loss position. Basic and diluted loss per share were 1.84 and 3.46 for the quarter and year-to-date.
Cash provided by operating activities was 5,460 for the first six months, while investing activities used 9,502, mainly for additions to property and equipment. At June 30, 2026, cash and cash equivalents were 44,164, restricted cash was 5,019, and secured notes reserve funds were 11,020. Debt remains significant, with a syndicated revolver principal of 190,400 and term notes principal of 301,505, contributing to total stockholders’ deficit of 200,771.
By segment, Ting generated total fiber revenue of 21,595 in the quarter, including 4,132 of construction revenue, Wavelo produced 11,755, and Tucows Domains 64,993. Segment Adjusted EBITDA for the quarter was 16,225. Management continues to review strategic alternatives for Ting Fiber, LLC, noting substantial doubt about Ting’s ability to meet its obligations within one year without additional financing; Ting’s third‑party debt has no recourse to Tucows, and the company states this does not create substantial doubt about its own ability to continue as a going concern.
Positive
- None.
Negative
- Ting Fiber going‑concern risk: management discloses substantial doubt about Ting’s ability to meet obligations within one year without additional financing, and strategic alternatives are under review, highlighting uncertainty around that subsidiary’s future.
- High leverage and negative equity: principal outstanding on the syndicated revolver and term notes totals 190,400 and 301,505 (thousands of U.S. dollars), while stockholders’ deficit is 200,771, indicating a highly leveraged capital structure and accumulated losses.
Filing Explained
Tucows has $45.3 million of revolver capacity, while $238.5 million and $63.0 million of term-note principal are scheduled for repayment in 2028 and 2029.
Tucows reports that its revolving credit facility remains drawn but has unused borrowing capacity, while major principal repayments are scheduled beginning in
As of
The filing also identifies scheduled principal repayments of
The company disclosed authorization to repurchase up to
Common shares issued and outstanding increased from 11,111,453 at
Key Figures
Net revenues Q2 2026: 100,556 (thousands of U.S. dollars)
Net loss Q2 2026: 20,471 (thousands of U.S. dollars)
Net loss six months 2026: 38,578 (thousands of U.S. dollars)
+5 more
8 metrics
Net revenues Q2 2026
100,556 (thousands of U.S. dollars)
For the three months ended June 30, 2026
Net loss Q2 2026
20,471 (thousands of U.S. dollars)
For the three months ended June 30, 2026
Net loss six months 2026
38,578 (thousands of U.S. dollars)
For the six months ended June 30, 2026
Interest expense, net
28,315 (thousands of U.S. dollars)
Six months ended June 30, 2026
Cash and cash equivalents
44,164 (thousands of U.S. dollars)
Balance at June 30, 2026
Syndicated revolver principal
190,400 (thousands of U.S. dollars)
Outstanding under 2023 Credit Facility at June 30, 2026
Term notes principal
301,505 (thousands of U.S. dollars)
2023 and 2024 Secured Fiber Revenue Notes at June 30, 2026
Stockholders’ deficit
200,771 (thousands of U.S. dollars)
Total stockholders’ deficit as of June 30, 2026
Key Terms
cash flow hedge, Total Funded Debt to Adjusted EBITDA Ratio, Segment Adjusted EBITDA, bankruptcy-remote, +1 more
5 terms
cash flow hedge financial
"foreign exchange contracts were designated as a cash flow hedge of expected future payments"
A cash flow hedge is an accounting label for a contract or arrangement used to offset expected future swings in a company’s cash payments or receipts — for example from variable-rate interest, foreign currency sales, or forecasted purchases. It matters to investors because it aims to smooth future cash and earnings volatility: gains or losses on the hedge are held out of current profit and reported separately until the underlying transaction affects results, much like buying insurance to steady future bills.
Total Funded Debt to Adjusted EBITDA Ratio financial
"increase to the Credit Facility if the Total Funded Debt to Adjusted EBITDA Ratio is less than 3.75:1.00"
Segment Adjusted EBITDA financial
"The Company’s key measure of segment performance is Segment Adjusted EBITDA"
Segment adjusted EBITDA is a measure of how much profit a specific part of a company generates from its everyday operations, before counting interest, taxes, depreciation, amortization and one‑off items. Investors use it like checking the fuel efficiency of one car in a fleet: it helps compare which business lines truly earn money, evaluate trend performance, and decide where to invest or cut costs without distortions from financing or accounting choices.
bankruptcy-remote financial
"Ting Issuer LLC, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company"
A bankruptcy-remote structure is a legal arrangement that separates specific assets or a subsidiary from the financial troubles of its parent or sponsor, like building a fireproof wall around those assets so problems on one side don’t spread to the other. For investors, it matters because it reduces the chance that the asset pool or debt they own will be claimed by a bankrupt parent, improving predictability of cash flows and recovery prospects if something goes wrong.
Expected credit losses financial
"The following table summarizes the Company’s expected credit losses"
Expected credit losses are an accounting estimate of how much a lender or company expects to lose when borrowers or customers don’t fully pay what they owe, combining how likely nonpayment is with how big the loss would be. Investors care because these estimates determine how much a firm must set aside from earnings as a reserve, directly affecting reported profits, balance-sheet strength and perceptions of credit risk—like setting aside a rainy-day fund for unpaid bills.
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FAQ
How did Tucows (TCX) perform financially in Q2 2026?
Tucows reported net revenues of 100,556 and a net loss of 20,471 for Q2 2026 (dollar amounts in thousands of U.S. dollars). For the first six months of 2026, revenues were 197,213 and net loss 38,578, reflecting continued losses despite positive gross profit.
What is Tucows (TCX) cash and debt position as of June 30, 2026?
At June 30, 2026, Tucows held 44,164 in cash and cash equivalents and 5,019 in restricted cash. Debt included a syndicated revolver with principal of 190,400 and term notes with principal of 301,505 (all amounts in thousands of U.S. dollars), contributing to negative equity.
What going-concern issues affect Ting Fiber within Tucows (TCX)?
Management states there is substantial doubt about Ting Fiber’s ability to meet obligations within one year without additional financing. Ting has negative operating cash flows and net losses, but its third‑party debt is non‑recourse to Tucows, which does not see similar doubt at the parent level.
How profitable were Tucows (TCX) segments in Q2 2026?
In Q2 2026, Segment Adjusted EBITDA was 16,225 (thousands of U.S. dollars), with Ting at 1,520, Wavelo at 2,828, and Tucows Domains at 11,877. This non‑GAAP measure excludes depreciation, amortization, stock‑based compensation, and certain other centrally managed or non‑recurring items.
What are Tucows (TCX) future performance obligations and contract liabilities?
Remaining performance obligations totaled 230,750 at June 30, 2026, expected to be recognized over several years. Contract liabilities, mainly advance billings for domain and related services, were 155,351 (both amounts in thousands of U.S. dollars), reflecting revenue to be earned over contract terms.
How much interest expense did Tucows (TCX) incur in the first half of 2026?
For the six months ended June 30, 2026, Tucows recorded interest expense, net of 28,315 (thousands of U.S. dollars). Interest paid in cash was 16,334, while additional non‑cash interest related to amortization of debt discounts and issuance costs affected reported earnings but not immediate cash flows.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to
Commission file number 1-32600
TUCOWS INC.
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
(Address of Principal Executive Offices) (Zip Code)
(416 ) 535-0123
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T §232.405 of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | |||||||||||||||
| Non-accelerated filer | o | o | |||||||||||||||
| o | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No x
As of August 5, 2026, there were 11,182,112 outstanding shares of common stock, no par value, of the registrant.
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TUCOWS INC.
Form 10-Q Quarterly Report
INDEX
PART I FINANCIAL INFORMATION | ||||||||
Item 1. | Condensed Consolidated Financial Statements | 3 | ||||||
Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2026 and December 31, 2025 | 3 | |||||||
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the three and six months ended June 30, 2026 and 2025 | 4 | |||||||
Condensed Consolidated Statements of Cash Flows (unaudited) for the three and six months ended June 30, 2026 and 2025 | 5 | |||||||
Notes to Condensed Consolidated Financial Statements (unaudited) | 6 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 32 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 50 | ||||||
Item 4. | Controls and Procedures | 51 | ||||||
PART II OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 52 | ||||||
Item 1A. | Risk Factors | 52 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 52 | ||||||
Item 3. | Defaults Upon Senior Securities | 52 | ||||||
Item 4. | Mine Safety Disclosures | 52 | ||||||
Item 5. | Other Information | 52 | ||||||
Item 6. | Exhibits | 53 | ||||||
Signatures | 54 | |||||||
TRADEMARKS, TRADE NAMES AND SERVICE MARKS
Tucows®, EPAG®, Hover®, OpenSRS®, Ting®, ENom®, Ascio®, Simply Bits® and Wavelo® are registered trademarks of Tucows Inc. or its subsidiaries. Other service marks, trademarks and trade names of Tucows Inc. or its subsidiaries may be used in this Quarterly Report on Form 10-Q (this “Quarterly Report”). All other service marks, trademarks and trade names referred to in this Quarterly Report are the property of their respective owners. Solely for convenience, any trademarks referred to in this Quarterly Report may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we or the owner of such trademark, as applicable, will not assert, to the fullest extent under applicable law, our or its rights, or the right of the applicable licensor, to these trademarks.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Tucows Inc.
Condensed Consolidated Balance Sheets
(Dollar amounts in thousands of U.S. dollars)
(unaudited)
| June 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
Accounts receivable, net of expected credit losses of $ | |||||||||||
| Deferred costs of fulfillment, current portion | |||||||||||
| Prepaid expenses and other | |||||||||||
| Total current assets | |||||||||||
| Deferred costs of fulfillment, long-term portion | |||||||||||
| Secured notes reserve funds | |||||||||||
| Property and equipment, net | |||||||||||
| Right of use lease asset | |||||||||||
| Intangible assets | |||||||||||
| Goodwill | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||||
| Derivative instrument liability | |||||||||||
| Operating lease liability, current portion | |||||||||||
| Contract liabilities, current portion | |||||||||||
Redeemable preferred units - no par value, | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Contract liabilities, long-term portion | |||||||||||
| Operating lease liability, long-term portion | |||||||||||
| Syndicated revolver | |||||||||||
| Notes payable | |||||||||||
| Other long-term liabilities | |||||||||||
| Deferred tax liability | |||||||||||
| Stockholders' deficit | |||||||||||
Common stock - | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders' deficit | ( | ( | |||||||||
| Total liabilities and stockholders' deficit | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements
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Tucows Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Dollar amounts in thousands of U.S. dollars, except per share amounts)
(unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenues: | |||||||||||||||||||||||
| Direct cost of revenues | |||||||||||||||||||||||
| Network, other costs | |||||||||||||||||||||||
| Network, depreciation and amortization | |||||||||||||||||||||||
| Total cost of revenues | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Technical operations and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| (Gain) loss on disposition of property and equipment | ( | ( | ( | ||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
| Other income (expenses): | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Total other expenses, net | ( | ( | ( | ( | |||||||||||||||||||
| Loss before provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net loss for the period | ( | ( | ( | ( | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | |||||||||||||||||||||||
| Unrealized income (loss) on hedging activities | ( | ( | |||||||||||||||||||||
| Net amount reclassified to earnings | |||||||||||||||||||||||
Other comprehensive income (loss) net of tax expense (recovery) of $ | ( | ||||||||||||||||||||||
| Comprehensive loss, for the period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Basic and diluted loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Shares used in computing basic and diluted loss per common share | |||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements
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Tucows Inc.
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands of U.S. dollars)
(unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cash provided by: | |||||||||||||||||||||||
| Operating activities: | |||||||||||||||||||||||
| Net loss for the period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Amortization of debt discount and issuance costs | |||||||||||||||||||||||
| (Gain) loss on disposition of property and equipment | ( | ( | ( | ||||||||||||||||||||
| Impairment of property and equipment | |||||||||||||||||||||||
| Deferred income taxes (recovery) | ( | ( | ( | ||||||||||||||||||||
| Accretion of redeemable preferred units | |||||||||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||||||||
| Change in non-cash operating working capital | |||||||||||||||||||||||
| Accounts receivable | ( | ( | |||||||||||||||||||||
| Prepaid expenses and deposits | ( | ( | ( | ||||||||||||||||||||
| Deferred costs of fulfillment | ( | ( | |||||||||||||||||||||
| Accounts payable & accrued liabilities | ( | ||||||||||||||||||||||
| Contract liabilities | ( | ||||||||||||||||||||||
| Other operating assets and liabilities | ( | ( | |||||||||||||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||||||||||||||
| Financing activities: | |||||||||||||||||||||||
| Proceeds received on exercise of stock options | |||||||||||||||||||||||
| Repayment of syndicated revolver | ( | ||||||||||||||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||||||||||||||
| Investing activities: | |||||||||||||||||||||||
| Proceeds on disposal of property and equipment | |||||||||||||||||||||||
| Additions to property and equipment | ( | ( | ( | ( | |||||||||||||||||||
| Acquisition of intangible assets | ( | ( | ( | ||||||||||||||||||||
| Net cash provided by (used in) investing activities | ( | ( | |||||||||||||||||||||
| Increase (decrease) in cash and cash equivalents, restricted cash, and restricted cash equivalents | ( | ( | ( | ||||||||||||||||||||
| Cash and cash equivalents, restricted cash, and restricted cash equivalents beginning of period | |||||||||||||||||||||||
| Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period | $ | $ | $ | $ | |||||||||||||||||||
| Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents within the interim consolidated balance sheets to the amounts shown in the interim consolidated statements of cash flows above: | |||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||
| Restricted cash included in funds held by trustee | |||||||||||||||||||||||
| Restricted cash included in secured notes reserve funds | |||||||||||||||||||||||
| Total cash and cash equivalents, restricted cash, and restricted cash equivalents end of period | $ | $ | $ | $ | |||||||||||||||||||
| Supplemental cash flow information: | |||||||||||||||||||||||
| Interest paid | $ | $ | $ | $ | |||||||||||||||||||
| Income taxes paid, net | $ | $ | $ | $ | |||||||||||||||||||
| Supplementary disclosure of non-cash investing and financing activities: | |||||||||||||||||||||||
| Property and equipment acquired during the period not yet paid for | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements
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NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. Organization of the Company
Tucows Inc. (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions) is a corporate parent, allocating capital and providing efficient shared services to its three businesses Ting, Wavelo and Tucows Domains Services. Ting provides retail consumers and small businesses with high-speed fixed Internet access in a number of towns and cities across the United States. Wavelo offers platform services which provide solutions to support Communication Service Providers ("CSPs") including subscription and billing management, network orchestration and provisioning, individual developer tools, and other professional services. Tucows Domains Services is a global distributor of Internet services, including domain name registration, digital certificates, and email. It provides these services primarily through a global Internet-based distribution network of Internet Service Providers, web hosting companies and other providers of Internet services to end-users.
2. Basis of Presentation
The accompanying unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair statement of the financial position of Tucows and its subsidiaries as of June 30, 2026 and the results of operations and cash flows for the interim periods ended June 30, 2026 and 2025. The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for future periods.
Subsidiary financial condition
Beginning in the fourth quarter of 2025, the Company initiated and continues to conduct a review of strategic alternatives for the Company's subsidiary, Ting Fiber, LLC ( "Ting"). Ting continues to have negative operating cash flows and incurs net losses. In our first quarter 2026 financial statements, the Company disclosed that substantial doubt existed regarding Ting's ability to meet its obligations within one year of the issuance date of the first quarter Form 10-Q, unless Ting secured additional financing. These conditions continued to exist on June 30, 2026. See "Note 22. Subsequent events" for information regarding Ting Financing transactions post-quarter end.
3. Recent Accounting Pronouncements
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (ASU 2024-03), which requires that a public entity disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption presented on the face of the income statement. The standard also requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively as well as disclose the total amount of selling expenses and, annually, the entity’s definition of selling expenses. ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, with either retrospective or prospective application. The standard allows for early adoption of these requirements and we are currently evaluating the disclosure impacts of our adoption.
In September 2025, FASB issued ASU 2025‑06 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The amendments update the accounting model for internal-use software by eliminating the prescriptive “development-stage” framework and replacing it with a “probable-to-complete” threshold and a “significant development uncertainty” evaluation. The amendments also remove separate guidance for website development costs and require entities to apply the property, plant, and equipment disclosure requirements in Subtopic 360-10 to capitalized internal-use software. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.
4. Derivative Instruments and Hedging Activities
The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed using derivative instruments is foreign exchange rate risk.
Since October 2012, the Company has employed a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, taxes, rent and payments to Canadian domain name registry suppliers that are denominated in Canadian dollars and are expected to be paid by its Canadian operating subsidiary. The Company does not use hedging forward contracts for trading or speculative purposes. The foreign exchange contracts typically mature between one and twelve months .
The Company has designated certain of these foreign exchange transactions as cash flow hedges for forecasted transactions. Where the critical terms of the hedging instrument and the entire hedged forecasted transaction are the same, in accordance with ASC 815 Derivatives and Hedging ("ASC 815"), the Company concludes that changes in fair value and cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. The Company designated the foreign exchange hedge as a cash flow hedge of expected future payments at the inception of the contract. Accordingly, for the foreign exchange contracts, unrealized gains or losses on the effective portion of these contracts were included within other comprehensive income (loss) and reclassified to earnings when the hedged transaction is settled. Cash flows from hedging activities were classified under the same category as the cash flows from the hedged items in
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the Consolidated Statements of Cash Flows. The fair value of the foreign exchange contract, as of June 30, 2026 and December 31, 2025, is recorded as derivative instrument assets or liabilities. For certain contracts where the hedged transactions are no longer probable to occur, the loss on the associated forward contract is recognized in earnings.
As of June 30, 2026, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $24.0 million, all of which met the requirements of ASC Topic 815 and were designated as hedges.
As of December 31, 2025, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $27.2 million, all of which met the requirements of ASC Topic 815 and were designated as hedges.
As of June 30, 2026, we had the following outstanding forward contracts to trade U.S. dollars in exchange for Canadian dollars:
| Maturity date (Dollar amounts in thousands of U.S. dollars) | Notional amount of U.S. dollars | Weighted average exchange rate of U.S. dollars | Fair value Asset (Liability) | |||||||||||||||||
| July - September 2026 | ( | |||||||||||||||||||
| October - December 2026 | ( | |||||||||||||||||||
| ( | ||||||||||||||||||||
Fair value of derivative instruments and effect of derivative instruments on financial performance
The effect of these derivative instruments on our Condensed Consolidated Financial Statements were as follows (amounts presented do not include any income tax effects).
Fair value of derivative instruments in the Condensed Consolidated Balance Sheets
| Derivatives (Dollar amounts in thousands of U.S. dollars) | Balance Sheet Location | As of June 30, 2026 Fair Value Asset (Liability) | As of December 31, 2025 Fair Value Asset (Liability) | |||||||||||||||||
| Foreign Currency forward contracts designated as cash flow hedges (net) | Derivative instruments | $ | ( | $ | ( | |||||||||||||||
| Total foreign currency forward contracts (net) | Derivative instruments | $ | ( | $ | ( | |||||||||||||||
Movement in Accumulated other comprehensive income (AOCI) balance for the three months ended June 30, 2026 (Dollar amounts in thousands of U.S. dollars)
| Gains and losses on cash flow hedges | Tax impact | Total AOCI | |||||||||||||||
| Opening AOCI Balance - March 31, 2026 | $ | ( | $ | $ | ( | ||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||
| Amount reclassified from AOCI | ( | ||||||||||||||||
| Other comprehensive income (loss) for the three months ended June 30, 2026 | ( | ||||||||||||||||
| Ending AOCI Balance - June 30, 2026 | $ | ( | $ | $ | ( | ||||||||||||
Movement in AOCI balance for the six months ended June 30, 2026 (Dollar amounts in thousands of U.S. dollars)
| Gains and losses on cash flow hedges | Tax impact | Total AOCI | |||||||||||||||
| Opening AOCI balance - December 31, 2025 | $ | ( | $ | $ | ( | ||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||
| Amount reclassified from AOCI | ( | ||||||||||||||||
| Other comprehensive income (loss) for the six months ended June 30, 2026 | ( | ( | |||||||||||||||
| Ending AOCI Balance - June 30, 2026 | $ | ( | $ | $ | ( | ||||||||||||
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Effects of derivative instruments on income and AOCI for the three months ended June 30, 2026 and 2025 are as follows (Dollar amounts in thousands of U.S. dollars)
| Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative | Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | |||||||||||||||||
| Operating expenses | $ | ( | ||||||||||||||||||
| Foreign currency forward contracts for the three months ended June 30, 2026 | $ | ( | Cost of revenues | $ | ( | |||||||||||||||
| Operating expenses | $ | ( | ||||||||||||||||||
| Foreign currency forward contracts for the three months ended June 30, 2025 | $ | Cost of revenues | $ | ( | ||||||||||||||||
Effects of derivative instruments on income and AOCI for the six months ended June 30, 2026 and 2025 are as follows (Dollar amounts in thousands of U.S. dollars)
| Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative | Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | |||||||||||||||||
| Operating expenses | $ | ( | ||||||||||||||||||
| Foreign currency forward contracts for the six months ended June 30, 2026 | $ | ( | Cost of revenues | $ | ( | |||||||||||||||
| Operating expenses | $ | ( | ||||||||||||||||||
| Foreign currency forward contracts for the six months ended June 30, 2025 | $ | Cost of revenues | $ | ( | ||||||||||||||||
5. Property and Equipment
Property and equipment consist of the following (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Computer equipment | $ | $ | |||||||||
| Computer software | |||||||||||
| Capitalized internal use software | |||||||||||
| Furniture and equipment | |||||||||||
| Vehicles and tools | |||||||||||
Fiber network (1) | |||||||||||
| Customer equipment and installations | |||||||||||
| Land | |||||||||||
| Buildings | |||||||||||
| Assets under construction | |||||||||||
| Leasehold improvements | |||||||||||
| Less: | |||||||||||
| Accumulated depreciation | |||||||||||
| $ | $ | ||||||||||
(1) Fiber network is presented net of $0.2 million of government grants ($0.1 million as of December 31, 2025), with an impact of $0.1 million on accumulated depreciation ($0.1 million as of December 31, 2025).
Depreciation of property and equipment (Dollar amounts in thousands of U.S. dollars):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Depreciation of property and equipment | $ | $ | $ | $ | |||||||||||||||||||
Impairment of Property and Equipment
During the three months ended June 30, 2026 and June 30, 2025, the Company recognized a total impairment expense of $0.3 million and $0.4 million, respectively, related to specific network assets that were identified through routine inspections as being damaged and no longer in use and are recorded under "Network, other costs" in the Consolidated Statements of Operations and Comprehensive Loss.
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6. Goodwill and Other Intangible Assets
Goodwill:
Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our acquisitions.
The Company's Goodwill balance remained consistent at $130.4 83 107.7 17 22.7
Goodwill is not amortized, but is subject to an annual impairment test, or more frequently if impairment indicators are present. No
Other Intangible Assets:
Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are not amortized but are subject to annual impairment assessments and more frequently if events or changes in circumstances indicate that the assets may be impaired. As part of the normal renewal evaluation process during the periods ended June 30, 2026 and June 30, 2025, the Company assessed that all domain names that were originally acquired in the June 2006 acquisition of Mailbank.com Inc. that were up for renewal, should be renewed.
Finite-life intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of two to fifteen years . The weighted average amortization period for all finite-life intangible assets is 2.5 years.
For the three and six months ended June 30, 2026, the Company acquired customer relationship assets through hosting agreements for $0.9 million and $0.9 million. These assets are being amortized over seven years .
Net book value of acquired intangible assets consists of the following (Dollar amounts in thousands of U.S. dollars):
| Surname domain names | Brand | Customer relationships | Technology | Network rights (1) | Total | |||||||||||||||||||||||||||||||||||||||
| Amortization period | indefinite life | 7 years | 3 - 7 years | 2 - 7 years | 15 years | |||||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Adjustment to acquisition of customer relationships | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Disposals from domain portfolio, net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Amortization expense | - | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Surname domain names | Brand | Customer relationships | Technology | Network rights (1) | Total | |||||||||||||||||||||||||||||||||||||||
| Amortization period | indefinite life | 7 years | 3 - 7 years | 2 - 7 years | 15 years | |||||||||||||||||||||||||||||||||||||||
| Balances, December 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Acquisition of customer relationships | ||||||||||||||||||||||||||||||||||||||||||||
| Disposals from domain portfolio, net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Amortization expense | - | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
(1) Includes $0.1 million of indefinite life intangible assets.
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The following table shows the estimated amortization expense for each of the next 5 years and thereafter, assuming no further additions to acquired intangible assets are made (Dollar amounts in thousands of U.S. dollars):
| Year ending, December 31 | |||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
7. Long Term Debt
2023 Credit Facility
On September 22, 2023, the Company and its wholly owned subsidiaries, Tucows.com Co., Ting Inc., Tucows (Delaware) Inc., Wavelo, Inc. and Tucows (Emerald), LLC (each, a “Borrower” and together, the “Borrowers”) and certain other subsidiaries of the Company, as guarantors, entered into a Credit Agreement (the “2023 Credit Agreement”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto (the “Lenders”), to, among other things, provide the Borrowers with a revolving credit facility in an aggregate amount not to exceed $240 million (the “2023 Credit Facility”). The Borrowers may request an increase to the Credit Facility through new commitments of up to $60 million if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the 2023 Credit Agreement) is less than 3.75 :1.00. In connection with the 2023 Credit Facility, the Company incurred $0.9 million of fees paid to the Lenders and $0.3 million of legal fees related to the debt issuance. These fees have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the 2023 Credit Agreement.
On September 8, 2025, the Borrowers entered into a one-year Extension Agreement (the “Extension Agreement”). The Extension Agreement extends the term of the 2023 Credit Agreement through September 22, 2027. The material terms of the 2023 Credit Agreement remain unchanged; however, the Extension Agreement amends certain definitions relating to the treatment of specified expenses in the calculation of Adjusted EBITDA for purposes of the Total Funded Debt to Adjusted EBITDA Ratio financial covenant. In connection with the Extension Agreement, the Company incurred $0.4 million of fees paid to the Lenders. These fees have been reflected as reduction to the carrying amount of the loan payable and will be amortized over the extended term from September 2026 to September 2027.
During the three and six months ended June 30, 2026, the Company made repayments of NIL. During the three months and six months ended June 30, 2025, the Company made repayments of NIL and $2.5
2023 Credit Facility Terms
The 2023 Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The 2023 Credit Agreement requires that the Company comply with certain customary non-financial covenants and restrictions. In addition, the Company has agreed to comply with the following financial covenants: (1) a leverage ratio by maintaining at all times a Total Funded Debt to Adjusted EBITDA Ratio of not more than 3.75 :1.00; and (2) an interest coverage ratio by maintaining as of the end of each rolling four financial quarter period, an Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 :1.00. The required principal repayment of $190.4 million is due in September 2027.
During the three and six months ended June 30, 2026, and June 30, 2025 the Company was in compliance with the covenants under its credit agreements in effect at the time. During the three and six months ended June 30, 2026 and June 30, 2025, the Company recognized $0.1 million, and $0.1 million, $0.1 0.1
Borrowings under the 2023 Credit Facility will accrue interest and standby fees based on the Company's Total Funded Debt to Adjusted EBITDA ratio and the availment type as follows:
| If Total Funded Debt to EBITDA is: | ||||||||||||||||||||||||||
| Availment type or fee | Less than 2.00 | Greater than or equal to 2.00 and less than 2.75 | Greater than or equal to 2.75 and less than 3.50 | Greater than or equal to 3.50 and less than 3.75 | ||||||||||||||||||||||
| Canadian dollar borrowings based on the Canadian overnight repo rate average or U.S. dollar borrowings based on SOFR and letter of credit fees (Margin) | % | % | % | % | ||||||||||||||||||||||
| Canadian borrowings based on Prime Rate or Canadian or U.S. dollar borrowings based on Base Rate (Margin) | % | % | % | % | ||||||||||||||||||||||
| Standby fees | % | % | % | % | ||||||||||||||||||||||
The following table summarizes the Tucows businesses excluding Ting's borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Principal | $ | $ | |||||||||
| Less: unamortized debt discount and issuance costs | ( | ( | |||||||||
| Syndicated Revolver, long-term portion | $ | $ | |||||||||
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Unused Commitments and Lines of Credit
As of June 30, 2026, the 2023 Credit Facility provided for aggregate borrowings of up to $240 million, of which $190.4 million was drawn and $4.3 million was committed to letters of credit, leaving $45.3 million available for future borrowings.
See “Note 22. Subsequent Events” for the terms of a third amendment to the 2023 Credit Facility executed after the end of the quarter.
8. Notes Payable
2023 Term Notes
On May 4, 2023 (the “Closing Date”), Tucows Inc. through its indirect and wholly owned subsidiaries, including Ting entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitization transaction. On the Closing Date, Ting Issuer LLC, a Delaware limited liability company (the “Issuer”), a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company issued (i) $168,357,000 of its 5.95 % Secured Fiber Revenue Notes, Series 2023-1, Class A-2, (ii) $23,289,000 of its 7.40 % Secured Fiber Revenue Notes, Series 2023-1, Class B and (iii) $46,859,000 initial principal amount of 9.95 % Secured Fiber Revenue Notes, Series 2023-1, Class C, together, the “2023 Term Notes”. The offering was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the issuance of the 2023 Term Notes were $220.5 million, after deducting a debt discount of $11.2 million and issuance costs of $6.7 million.
The debt discount and issuance costs of the 2023 Term Notes are being amortized using the straight-line method over a five-year period between the Closing Date and the anticipated repayment date.
The 2023 Term Notes are issued under an indenture, dated May 4, 2023 (the “Base Indenture”) between the Issuer and Citibank, N.A., as trustee (the “Indenture Trustee”) as supplemented by the Series 2023-1 supplemental indenture dated May 4, 2023, (the “Series 2023-1 Supplement” and, together with the Base Indenture, the “Indenture”), between the Issuer and the Trustee. Interest payments on the 2023 Term Notes are payable on a monthly basis. The legal final maturity date of the 2023 Term Notes is in April of 2053, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2023 Term Notes will be in April 2028. If the Issuer has not repaid or refinanced the 2023 Term Notes prior to the anticipated repayment date, additional interest will accrue on the 2023 Term Notes in an amount equal to the greater of (A) 5.00 % per annum and (B) a per annum interest rate equal to the excess, if any, by which the sum of the following exceeds the original interest rate of such 2023 Term Note (i) the yield to maturity (adjusted to a “mortgage equivalent basis” pursuant to the standards and practices of the Securities Industry and Financial Markets Association) on such anticipated repayment date of the United States Treasury Security having a term closest to 10 years, plus (ii) 5.00 %, plus (iii) (x) for the 2023 Class A-2 Notes, 3.50 %, (y) for the 2023 Class B Notes, 5.00 % and (z) for the 2023 Class C Notes, 7.82 %.
2024 Term Notes
On August 20, 2024, Tucows Inc., through its indirect and wholly owned subsidiaries, including Ting, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitization transaction. On August 20, 2024, Ting Issuer LLC, the Issuer, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company, issued: (i) $55,000,000 of its 5.63 % Secured Fiber Revenue Notes, Series 2024-1, Class A-2 (the “2024 Class A-2 Notes”), (ii) $8,000,000 of its 6.85 % Secured Fiber Revenue Notes, Series 2024-1, Class B (the “2024 Class B Notes”), and (iii) $16,000,000 initial principal amount of 9.15 % Secured Fiber Revenue Notes, Series 2024-1, (the “Class C Notes” together with the 2024 Class A-2 Notes and the 2024 Class B Notes, the “2024 Term Notes”). The Tranche C notes were not sold in this transaction, and they remain available for future sale depending on market conditions. The net proceeds from the issuance of the 2024 Term Notes were $61.0 million, after deducting a debt discount of NIL and issuance costs of $2.0 million.
The 2024 Term Notes were issued under the Base Indenture (the “Base Indenture”) dated May 4, 2023, and the related Series 2024-1 Supplement (the “Series 2024-1 Supplement”), dated August 20, 2024, by and between the Issuer, the asset parties thereto, and Citibank, N.A., as trustee (in such capacity, the “Indenture Trustee”) and securities intermediary. The Base Indenture and the Series 2024-1 Supplement allow the Issuer to issue additional series of notes in the future, subject to certain conditions set forth therein. Interest payments on the 2024 Term Notes are payable on a monthly basis. The legal final maturity date of the 2024 Term Notes is in August of 2054, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2024 Term Notes will be in August 2029.
The debt discount and issuance costs of the 2024 Term Notes are being amortized using the straight-line method over a five-year period between August 20, 2024 and the anticipated repayment date.
The 2023 Term Notes and 2024 Term Notes are secured by certain of the Company’s revenue-generating assets, consisting principally of fiber-network related agreements, fiber-network assets and customer contracts (collectively, the “Securitized Assets”) that are owned by certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company that act as the guarantors (collectively with the Issuer, the “Obligor”) under the Base Indenture. The 2023 Term Notes and 2024 Term Notes are subject to a series of covenants, restrictions and other investor protections including (i) that the Issuer maintains specified reserve accounts to be used to make required payments in respect of the 2023 Term Notes and 2024 Term Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, (iii) certain indemnification payments, (iv) the guarantors comply with standard bankruptcy-remoteness covenants, including not guaranteeing or being liable for other affiliates debts or liabilities, and (v) covenants relating to recordkeeping, access to information, and similar matters.
As of June 30, 2026, the Company was in compliance with all required covenants. As of June 30, 2026, the Company’s scheduled principal repayments for the 2023 Term Notes of $238.5 million is due in April 2028 and 2024 Term Notes of $63.0 million is due in August 2029.
During the three and six months ended June 30, 2026, the Company recognized $1.0 million and $2.0 million, respectively, and during the three and six months ended June 30, 2025, the Company recognized $1.0 million and $2.0 million, respectively, of interest expense related to the amortization of the debt discount and issuance costs of the 2023 Notes and 2024 Notes.
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The following table summarizes Ting's borrowings under the 2023 and 2024 Term Notes (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Principal | $ | $ | |||||||||
| Less: unamortized issuance costs | ( | ( | |||||||||
| Less: unamortized discount | ( | ( | |||||||||
Note payable, long-term portion(1) | $ | $ | |||||||||
(1)During each of the three and six months ended June 30, 2026, the Company capitalized less than $0.1 million of interest expenses pertaining to the 2023 and 2024 Term Notes directly attributable to the development of certain AUC assets, respectively. Comparatively, for each of the three and six months ended June 30, 2025, the Company capitalized $0.1 million of interest expenses pertaining to the 2023 Term Notes and 2024 Term Notes directly attributable to the development of certain AUC assets.
Restricted Cash
Under the terms of the Indenture, revenues generated from the Securitized Assets are deposited into accounts controlled by the Indenture Trustee within two business days of receipt. The Company has no access to or control of the funds held in trust until they are disbursed by the Indenture Trustee on the 20th day of each calendar month (the “Payment Date”). In accordance with the Indenture, on each Payment Date the Indenture Trustee disburses, on behalf of the Obligor, administration fees to service providers, interest payments to the noteholders, liquidity reserve top-ups (if required), and the remaining funds to accounts controlled by the Obligor. Funds held in trust with the Indenture Trustee at the reporting date are presented as “Restricted cash” on the Company’s Condensed Consolidated Balance Sheet.
As of June 30, 2026, and December 31, 2025, Restricted cash totaled $5.0 million and $5.3 million, respectively.
Under the terms of the Indenture, the Company is also required to maintain a liquidity reserve fund equal to the sum of (A) six times the total amount of fund administration fees payable on each payment date after May 20, 2023 and (B) six times the total amount of monthly interest on the 2024 and 2023 Term Notes due and payable on each payment date after May 20, 2023. The liquidity reserve is maintained with the Indenture Trustee until the maturity of the 2024 and 2023 Term Notes and the balance is presented as “Secured notes reserve funds” on the Company’s Condensed Consolidated Balance Sheet.
9. Income Taxes
The Company’s provision for income taxes for interim periods is determined by using an estimated annual effective tax rate, adjusted for discrete items arising during the quarter. At each quarter, the Company updates the estimated annual effective tax rate and makes a year-to-date adjustment to the provision. The estimated annual effective tax rate is subject to volatility due to several factors, including accurately forecasting the Company’s net income before tax, taxable income or loss, the mix of tax jurisdictions to which they relate, intercompany transactions, and changes in statutes, regulations, and case law.
For the three and six months ended June 30, 2026, the Company recorded an income tax expense of $3.1 million and $5.5 million, respectively, on net loss before income taxes of $17.3 million and $33.1 million respectively, using an estimated effective tax rate for the fiscal year ending December 31, 2026. Our effective tax rates for the three and six months ended June 30, 2026 differ from the U.S. federal statutory rate primarily due to an increase in valuation allowance on net operating losses and the impact of foreign earnings and tax return adjustments.
Comparatively, for the three and six months ended June 30, 2025, the Company recorded an income tax expense of $2.3 million and $4.4 million, respectively, on net loss before income taxes of $13.4 million and $26.3 million, respectively, using an estimated effective tax rate for the fiscal year ending December 31, 2025. Our effective tax rates for the three months and six months ended June 30, 2025 differ from the U.S. federal statutory rate primarily due to an increase in valuation allowance on net operating losses and the impact of foreign earnings.
10. Basic and Diluted Loss per Common Share:
The following table reconciles the numerators and denominators of the basic and diluted loss per common share computation (Dollar amounts in thousands of U.S. dollars, except for share data):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator for basic and diluted loss per common share: | |||||||||||||||||||||||
| Net loss for the period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Denominator for basic and diluted loss per common share: | |||||||||||||||||||||||
| Basic and diluted weighted average number of common shares outstanding | |||||||||||||||||||||||
| Basic and diluted loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
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11. Revenue
Significant accounting policy
The Company’s revenues are derived from (a) the provisioning of retail fiber Internet services through Ting, (b) the CSP solutions and professional services through Wavelo; and (c) domain name registration contracts, other domain related value-added services, domain sale contracts, and other advertising revenue through Tucows Domains Services. Certain revenues are disclosed under Corporate and other as they are considered non-core business activities including retail mobile services, Transition Services Agreement ("TSA") revenue and eliminations of intercompany revenue. Amounts received in advance of meeting the revenue recognition criteria described below are recorded as contract liabilities. All products are generally sold without the right of return or refund.
Revenue is measured based on the consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.
Nature of goods and services
The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, see "Note 14. Segment Reporting".
(a)Ting
The Company generates Ting revenues primarily through the provisioning of fixed high-speed Internet access, and the design and construction of fiber optic network assets for a specific customer.
Ting Internet contracts provide customers Internet access at their home or business through the installation and use of our fiber optic network. Ting Internet contracts are generally prepaid and grant customers with unlimited bandwidth based on a fixed price per month basis. Because consideration is collected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access. Though the Company does not consider the installation of fixed Internet access to be a distinct performance obligation, the fees related to installation are immaterial and therefore revenue is recognized as billed.
Ting Internet access services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Internet customers is computed based on the customer’s activation date. Incentive marketing credits given to customers are recorded as a reduction of revenue.
In those cases where payment is not received at the time of sale, revenue is not recognized at contract inception unless the collection of the related accounts receivable is reasonably assured. The Company records expected refunds, rebates and credit card charge-backs as a reduction of revenues at the time of the sale based on historical experiences and current expectations.
Our construction services relate to revenue earned from the design, construction and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed.
Revenue from network construction is recognized over time, as Ting’s performance creates or enhances an asset that the customer controls as it is being constructed. Progress toward completion is measured using an output method, based primarily on network build milestones such as served addresses completed and accepted by the customer. Amounts billed in advance of revenue recognition are recorded as contract liabilities, while amounts recognized in excess of billings are recorded as contract assets.
The Company has determined that it acts as principal in providing construction services, as it is primarily responsible for fulfilling the contract, controls construction inputs, and bears the risk associated with design, materials procurement, and subcontracted construction activities. Accordingly, construction revenue is recognized on a gross basis.
(b)Wavelo
The Company generates Wavelo revenues by providing billing and provisioning platform services to CSPs to whom we also provide other professional services.
Platform service agreements contain both platform services and professional services. Platform services offer a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools through a single, cloud-based service. Professional services provided under platform service arrangements can include implementation, training, consulting or software development/modification services. Platform services and professional services are considered to be separate performance obligations.
Consideration under platform service arrangements includes both a variable component that changes each month depending on the number of subscribers hosted on the platform, as well as a fixed component of platform payments and credits.
Platform payments and associated credits are allocated between the platform services and professional services performance obligations by estimating the standalone selling price (“SSP”) of each performance obligation.
The Company estimates the SSP of professional services based on observable standalone sales. The SSP of platform services is derived using the residual approach by estimating the total contract consideration and subtracting the SSP of professional services.
Each month of providing access to the platform is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, therefore, the performance obligation consists of a series of distinct service periods. Accordingly, the platform services represent a single promise to provide continuous access (i.e. a stand-ready performance obligation) to the platform. Accordingly, the platform payment revenue allocated to platform services is recognized evenly over the term of the contract. Variable subscriber fees are allocated to the platform services and are recognized as the fees are invoiced.
Revenues related to professional services are distinct from the other promises in the contract(s) and are recognized as the related services are performed, on the basis of hours consumed.
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Other professional services consist of professional service arrangements with platform services customers which are billed based on separate Statement of Work (“SOW”) arrangements for bespoke feature development. Revenues for professional services contracted through separate SOWs are recognized at a point-in-time when the final acceptance criteria have been met.
(c)Tucows Domains
The Company generates Tucows Domains revenues primarily through Wholesale Domains Services, Wholesale Value Added Services and Retail.
Wholesale Domains Services comprise Domain registration services provided to resellers, Tucows Registry Services and WHOIS Privacy Services.
Wholesale Value Added Services comprise Domain-related value-added services provided to resellers, as well as expiry and advertising revenue streams.
Retail services comprise Domain registration contracts provided to retail customers along with related email and WHOIS privacy services.
The Company is an ICANN accredited registrar. The Company is the primary obligor with our reseller and retail registrant customers and is responsible for the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retail registrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to those customers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.
Domain registration and WHOIS Privacy Services
Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new, renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period. Though fees are collected upfront, revenue from domain registrations are recognized ratably over the registration period as domain registration contracts contain a ‘right to access’ license of IP, which is a distinct performance obligation measured over time. The registration period begins once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.
WHOIS Privacy is an ongoing service that protects the personal information of Registrants from public access.
Tucows Registry Services
Tucows Registry Services (“TRS”) provides registry platform and related technical services to operators of generic top-level domains (“gTLDs”), branded top-level domains, and country code top-level domains. These services include processing domain name transactions and maintaining the related infrastructure and support systems required to operate the registry. Revenue is primarily transaction-based and is calculated as a fixed fee per financial transaction processed during the month. Because customers simultaneously receive and consume the benefits of the registry services as they are provided, revenue is recognized in the period in which the transactions occur. Service level credits are treated as variable consideration and are recorded as a reduction of revenue in the period in which they are incurred.
Value Added Services
Domain related value-added services like digital certifications and hosted email provide our resellers and retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services are considered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain related value-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction of the performance obligations.
Expiry
The Company also sells the rights to the Company’s portfolio domains or names acquired through the Company’s domain expiry stream. The domain expiry stream involves domain names whose registration has expired and as per ICANN regulations are placed into a 40-day grace period. Though the domain names do not belong to the registrant during the 40-day grace period, the Company is restricted from allowing others to register them. The Company monetizes its domain expiry stream both through the sale of names and by allowing advertisers to place parked pages advertisements on the domains. Revenue from the sale of domain-name rights through the domain expiry stream is recognized at a point in time when control of the domain-name rights is transferred to the customer.
Advertising
Advertising revenue is derived through domain parking monetization, whereby the Company contracts with third-party Internet advertising publishers to direct web traffic from the Company’s domain expiry stream domains, surname domains and direct navigation domains to advertising websites. Compensation from Internet advertising publishers is calculated variably on a cost-per-action basis based on the number of advertising links that have been visited in a given month. Given that the variable consideration is calculated and paid on a monthly basis, no estimation of variable consideration is required.
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Disaggregation of Revenue
The following is a summary of the Company’s revenue earned from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Ting: | |||||||||||||||||||||||
| Fiber Internet Services | $ | $ | $ | $ | |||||||||||||||||||
| Construction revenue | |||||||||||||||||||||||
| Total Fiber | |||||||||||||||||||||||
| Wavelo: | |||||||||||||||||||||||
| Platform Services | |||||||||||||||||||||||
| Total Wavelo | |||||||||||||||||||||||
| Tucows Domains | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Domain Services | |||||||||||||||||||||||
| Value Added Services | |||||||||||||||||||||||
| Total Wholesale | |||||||||||||||||||||||
| Retail | |||||||||||||||||||||||
| Total Tucows Domains | |||||||||||||||||||||||
| Corporate and other*: | |||||||||||||||||||||||
| Mobile Services and eliminations | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
*Corporate and all other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280 Segment Reporting ("ASC 280"). Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.
During the three and six months ended June 30, 2026, one 11 11.2 million and $22.2 million, respectively. During the three and six months ended June 30, 2025, one 12 12.2 million and $23.1 million, respectively.
At June 30, 2026, one customer represented 42 % of accounts receivables. As of December 31, 2025, one customer represented 44 % of total accounts receivable.
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The following is a summary of the Company’s cost of revenue from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Ting: | |||||||||||||||||||||||
| Fiber Internet Services | $ | $ | $ | $ | |||||||||||||||||||
| Construction revenue | |||||||||||||||||||||||
| Total Fiber | |||||||||||||||||||||||
| Wavelo: | |||||||||||||||||||||||
| Platform Services | |||||||||||||||||||||||
| Other professional services | |||||||||||||||||||||||
| Total Wavelo | |||||||||||||||||||||||
| Tucows Domains: | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Domain Services | |||||||||||||||||||||||
| Value Added Services | |||||||||||||||||||||||
| Total Wholesale | |||||||||||||||||||||||
| Retail | |||||||||||||||||||||||
| Total Tucows Domains | |||||||||||||||||||||||
| Corporate and other*: | |||||||||||||||||||||||
| Mobile Services and eliminations | |||||||||||||||||||||||
| Network Expenses: | |||||||||||||||||||||||
| Network, other costs | |||||||||||||||||||||||
| Network, depreciation and amortization cost | |||||||||||||||||||||||
| Total Network Expenses | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
*Corporate and all other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.
Contract Balances
The following table provides information about contract liabilities from contracts with customers. The Company accounts for contract assets and liabilities on a contract-by-contract basis, with each contract presented as either a net contract asset or a net contract liability accordingly.
Some of the Company’s long-term contracts with customers are billed in advance of service, such as domain contracts and some professional service contracts. Consideration received from customers related to performance obligations which have not yet been satisfied are recorded as contract liabilities.
Contract liabilities primarily relate to the portion of the transaction price received in advance related to the unexpired term of domain name registrations and other domain related value-added services, on both a wholesale and retail basis, net of external commissions.
Significant changes in contract liabilities for the six months ended June 30, 2026 and year ended December 31, 2025 were as follows (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | |||||||
| Balance, beginning of period | $ | $ | ||||||
| Contract liabilities | ||||||||
| Recognized revenue | ( | ( | ||||||
| Balance, end of period | $ | $ | ||||||
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Remaining Performance Obligations
As the Company fulfills its performance obligations, the following table includes revenues expected to be recognized in to future related performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2026 (Dollar amounts in thousands of U.S. dollars):
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
The table above presents the aggregate amount of the transaction price allocated to remaining performance obligations for contracts with an original expected duration greater than one year. These amounts primarily relate to fixed consideration associated with long-term customer contracts and are expected to be recognized as the related performance obligations are satisfied over the remaining contract terms.
For retail mobile and internet access services, where the performance obligation is part of contracts that have an original expected duration of one year or less (typically one month), the Company has elected to apply a practical expedient to not disclose revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied).
Although domain registration contracts are deferred over the lives of the individual contracts, which can range from one to ten years , approximately 86 percent of our contract liabilities balance related to domain contracts is expected to be recognized within the next twelve months .
Professional services revenue related to platform services agreement is deferred and recognized as hours are incurred over the contract term. Any revenue for unused professional service hours is recognized as revenue at the end of the contract period.
12. Costs to obtain and fulfill a Contract
Deferred costs of fulfillment
Deferred costs to fulfill contracts primarily consist of domain registration costs which have been paid to a domain registry and are capitalized as deferred costs of fulfillment. These costs are deferred and amortized over the life of the domain which generally ranges from one to ten years . The Company also defers certain technology design and data migration costs it incurs to fulfill its performance obligations contained in our platform services arrangements. There were no impairment losses recognized in relation to the costs capitalized during the six months ended June 30, 2026. Amortization expense is included in cost of revenue.
The breakdown of the movement in the deferred costs of fulfillment balance for the six months ended June 30, 2026 and year ended December 31, 2025 is as follows (Dollar amounts in thousands of U.S. dollars).
| June 30, 2026 | December 31, 2025 | |||||||
| Balance, beginning of period | $ | $ | ||||||
| Deferral of costs | ||||||||
| Amortized expense included in cost of revenue | ( | ( | ||||||
| Balance, end of period | $ | $ | ||||||
13. Leases
The Company leases datacenters, corporate offices, warehouses and fiber-optic cables under operating leases. The Company does not have any leases classified as finance leases.
The Company's leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year .
The components of lease expense were as follows (Dollar amounts in thousands of U.S. dollars):
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating lease expense (leases with a total term greater than 12 months) | $ | $ | $ | $ | |||||||||||||||||||
| Short-term lease expense (leases with a total term of 12 months or less) | |||||||||||||||||||||||
| Variable lease expense | |||||||||||||||||||||||
| Total lease expense | $ | $ | $ | $ | |||||||||||||||||||
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Lease expense is presented in general and administrative expenses and network expenses within our Condensed Consolidated Statements of Operations and Comprehensive Loss.
Variable lease payments are determined based on specific terms and conditions outlined in the lease agreements. These may include payments for utilities, which are based on actual usage, and maintenance costs, which are determined based on expenses incurred.
Information related to leases was as follows (Dollar amounts in thousands of U.S. dollars):
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
| Supplemental cash flow information: | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating lease - operating cash flows (fixed payments) | $ | $ | $ | $ | |||||||||||||||||||
| Operating lease - operating cash flows (liability reduction) | |||||||||||||||||||||||
| New right of use assets - operating leases | |||||||||||||||||||||||
| Supplemental balance sheet information related to leases: | June 30, 2026 | December 31, 2025 | |||||||||
| Weighted average discount rate | % | % | |||||||||
| Weighted average remaining lease term | |||||||||||
Maturity of lease liability as of June 30, 2026 (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | |||||
| Remaining of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total future lease payments | |||||
| Less imputed interest | |||||
| Total | $ | ||||
Operating lease payments include payments under the non-cancellable term, without any additional amounts related to options to extend lease terms that are reasonably certain of being exercised.
The Company has agreements with several third-party network partners who construct and operate fiber networks used to deliver our internet services. Under these arrangements, the partners build and activate new serviceable addresses each month. The financial terms of these arrangements may include fixed fees, variable fees, or a combination of both. The partners control and manage the construction. The Company does not control the construction process and are therefore not considered the owner during buildout. The leases for these addresses will commence once the lessor makes the underlying assets available for the Company's use, to deliver services to its customers.
The Company has elected to use the single exchange rate approach when accounting for lease modifications. Under the single exchange rate approach, the entire right of use asset is revalued at the date of modification in the Company’s functional currency provided the re-measurement is not considered a separate contract or if the re-measurement is related to change the lease term or assessment of a lessee option to purchase the underlying asset being exercised.
14. Segment Reporting
Reportable operating segments
The Company is organized and managed based on three
The Company's reportable operating segments and their principal activities consist of the following:
1.Ting - This segment derives revenue from providing retail high speed Internet access services to individuals and small businesses. Revenues are generated in the United States.
2.Wavelo – This segment derives revenue from platform and other professional services related to communication service providers, including Mobile Network Operators and Internet Service Providers, and are primarily generated in the United States.
3.Tucows Domains – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of retail Internet domain name registration and email services to individuals and small businesses. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada and the United States.
The Company's segmented results include shared services allocations, including a profit margin, for Finance, Human Resources and other technical services, to the operating units. In addition, Wavelo charges Ting a subscriber based monthly charge for services rendered. Financial impacts from these allocations and cross segment charges are eliminated as part of the consolidation.
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Key measure of segment performance
The CEO, as the chief operating decision maker ("CODM"), regularly reviews the operations and performance by segment. The CEO reviews Segment Adjusted EBITDA (as defined below) as (i) key measures of performance for each segment and (ii) to make decisions about the allocation of resources. Depreciation of property and equipment, amortization of intangible assets, impairment of indefinite life intangible assets, gain on currency forward contracts and other expenses, net are organized along functional lines and are not included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are not reviewed at the segment level by the CEO.
The Company's key measure of segment performance is Segment Adjusted EBITDA.
The Company calculates this as segment revenue together with recurring income earned on sale of transferred assets, less cost of revenue, network expenses and certain operating expenses attributable to each segment, such as sales and marketing, technical operations and development, general and administration expenses. Segment Adjusted EBITDA excludes unrealized gains (losses) on foreign exchange, stock-based compensation and transactions that are not indicative of on-going performance, including acquisition, transaction and transition costs. Certain revenues and expenses are excluded from segment Adjusted EBITDA results as they are centrally managed and not monitored by or reported to the CEO by segment, including mobile retail services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate IT.
The Company believes that Adjusted EBITDA is an important indicator of the operational strength and performance of its segments, by identifying those items that are not directly a reflection of each segment’s performance or indicative of ongoing operational and profitability trends.
The CODM uses Adjusted EBITDA to evaluate the overall recurring profitability of each operating segment after accounting for overhead costs. Adjusted EBITDA is evaluated by the CODM by comparing current period to historical and forecasted results and is used to inform strategic decisions over segment profitability, operational efficiency, pricing strategies, cost optimization, customer churn, competitor benchmarking and cash flow.
Information by reportable segments (with the exception of disaggregated revenue, which is discussed in “Note 11. Revenue”), which is regularly reported to the chief operating decision maker, and the reconciliations thereof to the Company's income before taxes, are set out in the following tables (Dollar amounts in thousands of U.S. dollars):
| Ting | Wavelo | Tucows Domains | Consolidated Totals | ||||||||||||||||||||
| For the Three Months Ended June 30, 2026 | |||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | |||||||||||||||||||
Intersegment revenues (1) | |||||||||||||||||||||||
| Total net revenues | |||||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
Network, other costs (2) | |||||||||||||||||||||||
Sales and marketing (2) | |||||||||||||||||||||||
Technical operations and development (2) | |||||||||||||||||||||||
General and administrative (2) (3) | |||||||||||||||||||||||
Other segment items (4) | ( | ( | ( | ( | |||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Ting | Wavelo | Tucows Domains | Consolidated Totals | ||||||||||||||||||||
| For the Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | |||||||||||||||||||
Intersegment revenues (1) | |||||||||||||||||||||||
| Total net revenues | |||||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
Network, other costs (2) | |||||||||||||||||||||||
Sales and marketing (2) | |||||||||||||||||||||||
Technical operations and development (2) | |||||||||||||||||||||||
General and administrative (2) (3) | |||||||||||||||||||||||
Other segment items (4) | ( | ( | ( | ( | |||||||||||||||||||
| Segment Adjusted EBITDA | $ | ( | $ | $ | $ | ||||||||||||||||||
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| Ting | Wavelo | Tucows Domains | Consolidated Totals | ||||||||||||||||||||
| For the Six Months Ended June 30, 2026 | |||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | |||||||||||||||||||
Intersegment revenues (1) | |||||||||||||||||||||||
| Total net revenues | |||||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
Network, other costs (2) | |||||||||||||||||||||||
Sales and marketing (2) | |||||||||||||||||||||||
Technical operations and development (2) | |||||||||||||||||||||||
General and administrative (2) (3) | |||||||||||||||||||||||
Other segment items (4) | ( | ( | ( | ( | |||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Ting | Wavelo | Tucows Domains | Consolidated Totals | ||||||||||||||||||||
| For the Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | |||||||||||||||||||
Intersegment revenues (1) | |||||||||||||||||||||||
| Total net revenues | |||||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
Network, other costs (2) | |||||||||||||||||||||||
Sales and marketing (2) | |||||||||||||||||||||||
Technical operations and development (2) | |||||||||||||||||||||||
General and administrative (2) (3) | |||||||||||||||||||||||
Other segment items (4) | ( | ( | ( | ( | |||||||||||||||||||
| Segment Adjusted EBITDA | $ | ( | $ | $ | $ | ||||||||||||||||||
(1)Intercompany revenues earned for provision of services on the ISOS and Subscriber Management ("SM") platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation.
(2)Effective beginning in 2026, Network, other costs, Sales and marketing, Technical operations and development and General and administrative costs presented in segment reporting to the CODM are shown excluding stock‑based compensation expenses for all business units. This presentation reflects a change from prior periods, in which stock‑based compensation expenses was included within each expense category and subsequently adjusted in “Other segment” line items. To ensure comparability, the 2025 segment expense figures have been recast to conform to the 2026 presentation.
(3)Effective beginning in 2026, General and administrative costs presented in segment reporting to the CODM are shown excluding Gains and losses from unrealized foreign currency. This presentation reflects a change from prior periods, in which gains and losses from unrealized foreign currency was included within each expense category and subsequently adjusted in “Other segment” line items. To ensure comparability, the 2025 segment expense figures have been recast to conform to the 2026 presentation.
(4)Other segment items for each reportable segment includes other income, as well as adjustments to add back (deduct) acquisition and transition costs, which are included in other line items but are excluded from our definition of Segment Adjusted EBITDA.
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The following table reconciles Segment Adjusted EBITDA for the period to Net loss before tax for the three and six months ended June 30, 2026 and June 30, 2025:
| Reconciliation of Segment Adjusted EBITDA to Net loss before tax | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| (In Thousands of U.S. Dollars) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Reconciling items: | |||||||||||||||||||||||
Corporate and other (1) | ( | ( | ( | ( | |||||||||||||||||||
| Depreciation of property and equipment | ( | ( | ( | ( | |||||||||||||||||||
| Impairment and loss (gain) on disposition of property and equipment | ( | ( | |||||||||||||||||||||
| Amortization of intangible assets | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Stock-based compensation | ( | ( | ( | ( | |||||||||||||||||||
| Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities | ( | ( | |||||||||||||||||||||
Acquisition and other costs (2) | ( | ( | ( | ( | |||||||||||||||||||
| Net loss before tax | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(1)Items that are centrally managed and not monitored by or reported to the CEO by segment, including retail mobile services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate IT.
(2)Acquisition and other 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.
Revenue from sources outside of Canada and the United States of America comprises less than 10 % of the Company's total operating revenue.
(b) The following is a summary of the Company’s property and equipment by geographic region (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Canada | $ | $ | |||||||||
| United States | |||||||||||
| $ | $ | ||||||||||
(c) The following is a summary of the Company’s amortizable intangible assets by geographic region (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Canada | $ | $ | |||||||||
| United States | |||||||||||
| $ | $ | ||||||||||
Under ASC 326, "Financial Instruments - Credit Losses", the Company assesses the adequacy of its allowance for expected credit losses based on historical loss experience, current economic conditions and reasonable forecasts. The Company's evaluation considers the short-term nature of receivables and the high credit quality of the Company's customer base, which mitigates significant credit risk exposure.
(d) The following table summarizes the Company's expected credit losses ("ECL") (Dollar amounts in thousands of U.S. dollars):
| Expected credit losses | Balance at beginning of period | Increase in ECL provision | Write-offs during period | Balance at end of the period | |||||||||||||||||||
| Six months ended June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||
| Twelve months ended December 31, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||
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15. Stockholders' Deficit
The following table summarizes stockholders' deficit transactions for the three and six months ended June 30, 2026 (Dollar amounts in thousands of U.S. dollars):
| Common stock | Additional paid in capital | Retained earnings (Accumulated Deficit) | Accumulated other comprehensive income (loss) | Total stockholders' deficit | |||||||||||||||||||||||||||||||
| Number | Amount | ||||||||||||||||||||||||||||||||||
| Balances, March 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Stock-based compensation(1) | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | - | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | |||||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
| Common stock | Additional paid in capital | Retained earnings (Accumulated Deficit) | Accumulated other comprehensive income (loss) | Total stockholders' deficit | |||||||||||||||||||||||||||||||
| Number | Amount | ||||||||||||||||||||||||||||||||||
| Balances, December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
| Exercise of stock options | - | - | — | - | - | — | |||||||||||||||||||||||||||||
Stock-based compensation(1) | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | - | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | ( | ( | |||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
2026 Stock Buyback Program
On February 12, 2026, the Company announced that its Board of Directors (“Board”) approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on February 13, 2026 and is expected to terminate on February 12, 2027. For the three and six ended June 30, 2026, the Company did not
2025 Stock Buyback Program
On February 13, 2025, the Company announced that its Board approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on February 14, 2025 and terminated on February 12, 2026. For the three and six months ended June 30, 2026, the Company did not
2024 Stock Buyback Program
On February 22, 2024, the Company announced that its Board approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. Purchases were to be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 23, 2024 and terminated on February 22, 2025. For the three and six months ended June 30, 2025, the Company did not
16. Share-based Payments
2006 Tucows Equity Compensation Plan
On November 22, 2006, the shareholders of the Company approved the Company’s 2006 Equity Compensation Plan (the “2006 Plan”), which was amended and restated effective July 29, 2010 and which serves as a successor to the 1996 Plan. The 2006 Plan has been established for the benefit of the employees, officers, directors and certain consultants of the Company. The maximum number of common shares which had initially been set aside for issuance under the 2006 Plan is 1.25 million shares. The plan was amended to increase the number of shares set aside for issuance by an additional 0.475 million shares, 0.75 million shares and 1.53 million shares in October 2010, September 2015 and November 2020, respectively increasing the maximum to a total of 4.0 million shares. Generally, options issued under the 2006 Plan vest over a four-year period and have a term not exceeding seven years , except for automatic formula grants of non-qualified stock options, which vest after one year and have a five-year term. Prior to the September 2015 amendment to the 2006 Plan, automatic formula grants of non-qualified stock options vested immediately upon grant.
The Company's current equity-based compensation plans include provisions that allow for the “net exercise” of stock options by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the option holder can be paid for by having the option holder tender back to the Company a number of shares at fair value equal to the amounts due. These transactions are accounted for by the Company as a purchase and retirement of shares.
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The fair value of each option grant ("Company Option") is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The Company calculates expected volatility based on historical volatility of the Company’s common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on historical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of Tucows Inc. common shares at the date of grant.
Details of Company stock option transactions for the three and six months ended June 30, 2026 and June 30, 2025 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | ||||||||||||||||||||||
| Number of shares | Weighted average exercise price per share | Number of shares | Weighted average exercise price per share | ||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | |||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||
| Expired | ( | ( | |||||||||||||||||||||
| Outstanding, end of period | |||||||||||||||||||||||
| Options exercisable, end of period | $ | $ | |||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||
| Number of shares | Weighted average exercise price per share | Number of shares | Weighted average exercise price per share | ||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | |||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||
| Expired | ( | ( | |||||||||||||||||||||
| Outstanding, end of period | |||||||||||||||||||||||
| Options exercisable, end of period | $ | $ | |||||||||||||||||||||
As of June 30, 2026, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
| Options outstanding | Options exercisable | ||||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | Number outstanding | Weighted average exercise price per share | Weighted average remaining contractual life (years) | Aggregate intrinsic value | Number exercisable | Weighted average exercise price per share | Weighted average remaining contractual life (years) | Aggregate intrinsic value | |||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
$ | |||||||||||||||||||||||||||||||||||||||||||||||
$ | |||||||||||||||||||||||||||||||||||||||||||||||
$ | |||||||||||||||||||||||||||||||||||||||||||||||
$ | |||||||||||||||||||||||||||||||||||||||||||||||
$ | |||||||||||||||||||||||||||||||||||||||||||||||
$ | |||||||||||||||||||||||||||||||||||||||||||||||
$ | |||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Total unrecognized compensation cost relating to unvested stock options at June 30, 2026, prior to the consideration of expected forfeitures, is approximately $2.2 million and is expected to be recognized over a weighted average period of 2.2 years.
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2022 Wavelo Equity Compensation Plan
On November 9, 2022 the Board of Wavelo approved Wavelo's Equity Compensation Plan (“ECP”), which has been established for the benefit of the employees, officers, directors and certain consultants of Wavelo or Tucows. The Wavelo stock options were introduced in order to provide variable compensation that helps retain executives and ensures that our executives' interests are aligned with those stakeholders of the business to grow long-term value. The maximum number of Wavelo common shares which have been set aside for issuance under the 2022 Plan is 20 million shares. In June 2024, the Board approved an increase in the authorized share count to 120 million shares, with a corresponding increase in the option pool to 25 million shares. The options issued under the ECP primarily vest over a period of three years and have a seven-year term. For the initial grants under the plan, the first 25 % became exercisable within three months and vesting ratably monthly thereafter, after the third year. Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of share-based instrument at the time of the grant and are recognized as expense over the vesting period of the share-based instrument. The Company recognizes forfeitures as they occur.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The Company calculates expected volatility based on the actual volatility of comparable publicly traded companies. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company assumes the expected dividend yield to be zero .
Details of Wavelo's stock option transactions for the three and six months ended June 30, 2026 and June 30, 2025 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | ||||||||||||||||||||||
| Number of shares | Weighted average exercise price per share | Number of shares | Weighted average exercise price per share | ||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||
| Expired | ( | ( | |||||||||||||||||||||
| Outstanding, end of period | |||||||||||||||||||||||
| Options exercisable, end of period | $ | $ | |||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||
| Number of shares | Weighted average exercise price per share | Number of shares | Weighted average exercise price per share | ||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||
| Expired | ( | ( | |||||||||||||||||||||
| Outstanding, end of period | |||||||||||||||||||||||
| Options exercisable, end of period | $ | $ | |||||||||||||||||||||
As of June 30, 2026, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
| Options outstanding | Options exercisable | ||||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | Number outstanding | Weighted average exercise price per share | Weighted average remaining contractual life (years) | Aggregate intrinsic value | Number exercisable | Weighted average exercise price per share | Weighted average remaining contractual life (years) | Aggregate intrinsic value | |||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Total unrecognized compensation cost relating to unvested stock options at June 30, 2026, prior to the consideration of expected forfeitures, is approximately $2.6 million and is expected to be recognized over a weighted average period of 3.0 years.
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2022 Ting Equity Compensation Plan
On January 16, 2023, the Board of Ting approved Ting's Equity Compensation Plan (Ting ECP), which has been established for the benefit of the employees, officers, directors and certain consultants of Ting or Tucows. The Ting stock options were introduced in order to provide variable compensation that helps retain executives and ensure that our executives' interests are aligned with those stakeholders of the business to grow the long-term value. The maximum number of Ting common units that have been set aside for issuance under the plan is 10 million units, currently there are 100 million common units outstanding. Generally, options issued under the Ting ECP vest over a four-year period and have a term not exceeding seven years . Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of the grant and are recognized as expense over the vesting period of the share-based instrument.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. As option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Ting calculates expected volatility based on the actual volatility of comparable publicly traded companies. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company assumes the expected dividend yield to be zero .
Details of Ting's stock option transactions for the three and six months ended June 30, 2026 and June 30, 2025 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | ||||||||||||||||||||||
| Number of shares | Weighted average exercise price per share | Number of shares | Weighted average exercise price per share | ||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | |||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||
| Expired | ( | ( | |||||||||||||||||||||
| Outstanding, end of period | |||||||||||||||||||||||
| Options exercisable, end of period | $ | $ | |||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||
| Number of shares | Weighted average exercise price per share | Number of shares | Weighted average exercise price per share | ||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | |||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||
| Expired | ( | ( | |||||||||||||||||||||
| Outstanding, end of period | |||||||||||||||||||||||
| Options exercisable, end of period | $ | $ | |||||||||||||||||||||
As of June 30, 2026, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
| Options outstanding | Options exercisable | ||||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | Number outstanding | Weighted average exercise price per share | Weighted average remaining contractual life (years) | Aggregate intrinsic value | Number exercisable | Weighted average exercise price per share | Weighted average remaining contractual life (years) | Aggregate intrinsic value | |||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Total unrecognized compensation cost relating to unvested stock options at June 30, 2026, prior to the consideration of expected forfeitures, is approximately $0.4 million and is expected to be recognized over a weighted average period of 0.9 years.
The Company recorded total stock-based compensation expense of $1.2 million and $2.3 million for the three and six months ended June 30, 2026, respectively. The Company recorded total stock-based compensation expense of $1.4 million and $2.9 million for the three and six months ended June 30, 2025, respectively. The Company details of the stock-based compensation expense are as follows:
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Company options | $ | $ | $ | $ | |||||||||||||||||||
| Wavelo options | |||||||||||||||||||||||
| Ting options | |||||||||||||||||||||||
| Capitalized stock based compensation | ( | ( | ( | ( | |||||||||||||||||||
| Total stock based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
During the three and six months ended June 30, 2026 and June 30, 2025, the Company capitalized $0.1 million, $0.1 million, $0.1 million and $0.1 million, respectively, of stock based compensation directly attributable to the development of certain IUS assets.
17. Fair Value Measurement
For financial assets and liabilities recorded in our financial statements at fair value we utilize a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
Equity investments without readily determinable fair value include ownership rights that do not provide the Company with control or significant influence. Such equity investments are recorded at cost, less any impairment, and adjusted for subsequent observable price changes as of the date that an observable transaction takes place. Subsequent adjustments are recorded in other income (expense), net.
The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as of June 30, 2026 (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | |||||||||||||||||||||||
| Fair Value Measurement Using | Asset (Liability) at Fair value | ||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
| Derivative instrument asset (liability), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Total assets (liabilities), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||
The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as of December 31, 2025 (Dollar amounts in thousands of U.S. dollars):
| December 31, 2025 | |||||||||||||||||||||||
| Fair Value Measurement Using | Asset (Liability) at Fair value | ||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
| Derivative instrument asset (liability), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Total assets (liabilities), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||
18. Other income (expense)
On August 1, 2020, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and between the Company and DISH Wireless L.L.C. ("EchoStar", DISH's post-merger parent). Under the Purchase Agreement and in accordance with the terms and conditions set forth therein, the Company sold to EchoStar its mobile customer accounts that are marketed and sold under the Ting brand (other than certain customer accounts associated with one network operator) (“Transferred Assets”). For a period of 10 years following the execution of the Purchase Agreement, EchoStar will pay a monthly fee to the Company generally equal to an amount of net revenue received by EchoStar in connection with the transferred customer accounts minus certain fees and expenses, as further set forth in the Purchase Agreement.
The Company accounts for investment in entities over which it has the ability to exert significant influence, but does not control and is not the primary beneficiary of, using the equity method of accounting. The Company includes the proportionate share of earnings (loss) of the equity method investees in Other Income. The Company also earned other non-operational income during the period amounting to less than $0.1 million.
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The Company earned the amounts noted in the table below during the three and six months ended June 30, 2026 and June 30, 2025.
| (Dollar amounts in thousands of U.S. dollars) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Income earned on sale of transferred assets | $ | $ | $ | $ | |||||||||||||||||||
| Equity in (earnings) losses of unconsolidated businesses | ( | ( | ( | ||||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Total other income | $ | $ | $ | $ | |||||||||||||||||||
The following table provides additional information relating to Interest expense, net (Dollar amounts in thousands of U.S. dollars):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Interest expense | $ | ( | $ | ( | $ | ( | ( | ||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense, net | $ | ( | $ | ( | $ | ( | ( | ||||||||||||||||
19. Redeemable Preferred Units
On August 8, 2022 (the “Effective Date”), Ting and certain affiliated entities (the "Ting Entities") entered into a Series A Preferred Unit Purchase Agreement (the “Unit Purchase Agreement”) with Generate TF Holdings, LLC ("Generate"); and certain affiliated entities (the "Generate Entities") and closed the transaction on August 11, 2022 (the “Transaction Close”). Ting issued and sold 10,000,000 Series A Preferred Units to Generate at $6.00 per unit, resulting in gross proceeds of $60.0 million. The investment provided an additional $140 million of capital commitments available to Ting over the subsequent three year period, if certain milestones were achieved.
On December 5, 2022, Ting issued and sold an additional 4,583,333 Series A Preferred Units for gross proceeds of $27.5 million. During the year ended December 31, 2023, Ting issued an aggregate of 5,833,333 additional Series A Preferred Units for gross proceeds of $35.0 million. On May 4, 2023, Ting redeemed 5,173,067 Series A Preferred Units for $45.7 million, including a make-whole premium of $14.7 million. The redemption was accounted for as a debt extinguishment, and the associated loss was recognized in other income (expense).
As of June 30, 2026, the Series A Preferred Units have an aggregate liquidation preference of $91.5 million, plus a make-whole premium should redemption occur before the fourth anniversary of the Transaction Close and are senior to the Ting common units with respect to sale, dissolution, liquidation or winding up of Ting.
Ting had the option to issue additional Series A Preferred Units through August 8, 2025, subject to milestone achievement. Until this date, Ting was required to pay a standby fee of 0.50 % per annum on the undrawn commitment, payable quarterly.
The Series A Preferred Units accrue a preferred return at 15 % per annum, subject to adjustment between 13 % and 17 % based on certain project approval and contribution conditions. The preferred return accrues daily and compounds quarterly. The preferred return accrued during the first two years is not payable unless and until the Series A Preferred Units are redeemed. The preferred return accrued after the second anniversary of the Transaction Close is payable by Ting quarterly.
Ting incurred $0.8 million of legal fees related to the redeemable preferred unit issuance, which have been reflected as a reduction to the carrying amount of the redeemable preferred unit balance and will be amortized to interest expense, net in the accompanying Consolidated Statements of Operations and Comprehensive Loss over the expected six-year term of the instrument.
The liability was initially recorded at fair value and subsequently recorded at the present value of the settlement amount, which includes the preferred return payments required until the instrument's expected maturity on the sixth anniversary of the Transaction Close, August 10, 2028 using the implicit rate of return of the instrument, 15 %. For the six month period ended June 30, 2026, Ting recorded an interest expense of $10.4 million, the total of which was accreted. For the year ended December 31, 2025, Ting recorded an interest expense of $19.3 million, of which $14.7 million was accreted. Interest expense related to amortization of issuance costs was $0.1
Commencing in the second quarter of 2025, Ting had not paid the quarterly preferred return for more than two consecutive quarters. The unpaid amount as of June 30, 2026 is $25.1 million and has been added to the redeemable preferred units balance in the Consolidated Balance Sheets. The impact of this failure to pay is outlined below under Return Breach and Trigger Event.
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The following table summarizes Ting's borrowings under the Unit Purchase Agreement (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Opening Balance | $ | $ | |||||||||
Add: Accretion of redeemable preferred units(1) | |||||||||||
| Redeemable preferred shares balance | |||||||||||
| Less: Deferred preferred financing costs | ( | ( | |||||||||
| Total Redeemable preferred units | $ | $ | |||||||||
(1)Ting capitalizes interest expenses directly attributable to the development of qualifying assets. Qualifying assets include IUS, AUC, equipment, or other long-lived assets that meet the capitalization criteria prescribed by ASC 350. During the three and six months ended June 30, 2026 Ting capitalized less than $0.1 0.1
Return Breach and Trigger Event
On December 1, 2025, Ting received written notice from Generate asserting that a Return Breach had occurred due to Ting’s failure to pay the quarterly preferred return for the second and third quarter of 2025 and the failure to cure such nonpayment within 60 days of notice from Generate thereof. Generate further asserted that such Return Breach constituted a Trigger Event under the Ting Fiber LLC Amended and Restated Limited Liability Company Agreement, dated as of August 11, 2022 (the "LLC Agreement") and reserved its rights to pursue available remedies under the LLC Agreement and applicable law. Such remedies include the right to elect conversion of the Series A Preferred Units into common units of Ting and a call right to purchase certain fiber network assets of Ting at the lower of the fair market value of such assets, and the aggregate invested capital in such assets plus 10 %. Generate has not exercised either of these rights as of June 30, 2026.
Additionally, as a result of the Return Breach and related Trigger Event asserted by Generate on December 1, 2025, Generate has the ability, at its option, to make a request for redemption of all Series A Preferred Units, requiring Ting to redeem all outstanding Series A Preferred Units within 30 days of such request (a "Redemption Request"). The redemption price under such a request includes the original issue price, any unsatisfied preferred return, as well as a make-whole premium. As Ting would be required to settle the obligation within 30 days of a Redemption Request being submitted, the redeemable preferred units were reclassified from long term to current liabilities in the Consolidated Balance Sheet as of December 31, 2025. If Ting did receive a Redemption Request from Generate, Ting would be required to pay Generate an estimated $204.9 million, representing the redemption price. As of June 30, 2026, Generate had not submitted a redemption request, and payment of the Redemption Price was not due.
20. Commitments and Contingencies
(a)The Company has several non-cancelable lease and purchase obligations primarily for general office facilities, service contracts for mobile telephone services and equipment that expire over the next ten years . Future minimum payments under these agreements are as follows (Dollar amounts in thousands of U.S. dollars):
| Contractual Obligations for the period ended June 30, 2026 | Capital Purchase Obligations | Purchase Obligations (1) | Total Obligations | |||||||||||||||||
| Remainder of 2026 | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||
(1)Purchase obligations include all other legally binding service contracts for mobile telephone services and other operational agreements to be delivered during the remainder of 2026 and subsequent years
(b)On February 9, 2015 Ting Fiber, Inc. (“Ting Fiber”) entered into a lease and network operation agreement with the City of Westminster, Maryland (the “City”) relating to the deployment of a new fiber network throughout the Westminster area (“WFN”).
Under the agreement, the City will finance, construct, and maintain the WFN which will be leased to Ting for a period of ten years . The network will be constructed in phases, the scope and timing of which shall be determined by the City, in cooperation with Ting.
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Under the terms of the agreement, Ting may be required to advance funds to the City in the event of a quarterly shortfall between the City’s revenue from leasing the network to Ting and the City’s debt service requirements relating to financing of the network. Ting could be responsible for shortfalls between $50,000 and $150,000 per quarter. In 2016, the City entered into financing for the construction of the WFN which allows the City to draw up to $21.0 million from their lenders over the next five years with interest only payments during that period with a loan maturity of 30 years. As of June 30, 2026, the City has drawn $16.2 million and the City’s revenues from Ting exceeded the City’s debt service requirements. The Company does not believe it will be responsible for any shortfall in the remainder of 2026.
(c)On November 4, 2019 Ting entered into an access and use agreement with Netly, LLC (“Netly”). The agreement establishes twelve-year term wherein Ting will be granted the right to act as an Internet service provider for fiber-optic networks to be constructed in and around the cities of Solana Beach, California. Under the terms of the agreement, Ting will have a 3 -year “Headstart” period over each completed segment of the network, whereby Ting shall be the exclusive provider of services to subscribers during the “Headstart” period. Netly is fully responsible for constructing, operating and maintaining a wholesale fiber optic network, as well as the financing of those activities.
Ting is responsible for paying a fee per subscriber to Netly, as well as an unlit door fee for each serviceable address not subscribed. Through a “take or pay” arrangement, Ting has agreed to certain minimum charges based on minimum subscriber rates. To the extent that construction of the fiber optic network is complete, our minimum commitments have been included in the contractual lease obligations in "Note 13. Leases". The Company has had an ongoing billing dispute with Netly regarding the rates and methodology under which it can invoice our Ting Fiber division for our operations. In July 2026, Netly executed a release of approximately $0.9 million of previously accrued amounts relating to periods prior to the settlement, in full and final resolution of the dispute. The release did not require any payment by the Company and relates only to the historical disputed invoicing; Netly has agreed to apply a corrected invoicing methodology prospectively.
(d)On January 7, 2022, Ting Fiber entered into a 25 -year lease agreement with Colorado Springs Utilities (“CSU”), a municipally owned utility. The lease agreement named Ting Fiber the anchor tenant on a city-wide fiber network that is intended to pass a maximum of 275,000 homes in Colorado Springs, Colorado. CSU began construction in Q2 of 2023. The lease obligates Ting Fiber, and its ultimate parent the Company, to pay a per month fee for addresses passed by the network (as they are passed and become serviceable for customers to connect to the network) and for certain fiber infrastructure, including co-location space. Based on the Company's current projection of approximately 150,000 homes to be passed, total lease costs over the twenty-five-year term are estimated at approximately $322.8 million, however the minimum fees are variable based on the percentage completion of the fiber optic network and these costs may be higher should the timing of delivery or amount of addresses passed be different from our estimate. Future committed fees associated with completed portions of the network have been included in the contractual lease obligations. Future fees associated with portions of the network that have yet to be constructed have not been considered an unconditional purchase obligation.
(e)On May 11, 2022, Ting, entered into a "Rights-of-Way" agreement with the City of Alexandria, Virginia whereby the City granted Ting the right to install, place, construct, maintain, operate, upgrade, repair, and replace a Communications System to provide Broadband Services within the Public Rights-of-Way (a space in, upon, above, along, across, over and below the public and City-owned property that is used as a public rights-of-way) for a fee. Per the agreement, Ting is to pay the City throughout the 20 -year term of the agreement, an amount equal to 3 % of Ting's Broadband Revenues once the network is live, and subscribers are obtained, and this fee is to be paid on a quarterly basis. The agreement commenced once Ting Fiber launched its network in Alexandria in March 2023. Since these fees are currently variable in nature, they have not been considered an unconditional purchase obligation for the purposes of the table in Note 20 (a).
(f)On November 1, 2023, the Company, entered into a Network Access and Use Agreement with Blue Suede Networks, LLC, which granted Ting Fiber the right to use the fiber communications network to be constructed by Blue Suede Networks, LLC to provide high-speed broadband Internet Access services to end-user residential and small and medium sized business customers in the city of Memphis, Tennessee. The agreement grants the Company an exclusivity period of 5 years. The agreement requires the Company to pay the greater of a minimum revenue commitment based on minimum subscriber rates and a revenue share. Future fees associated with portions of the network have not been considered an unconditional purchase obligation for the purposes of the table in Note 20 (a).
(g)In the normal course of its operations, the Company becomes involved in various legal claims and lawsuits. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions or claims outstanding or pending as of June 30, 2026 cannot be predicted with certainty, management does not believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company’s financial position.
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21. Additional Financial Information
The following tables provide additional financial information related to our Condensed Consolidated Financial statements:
| Balance Sheet Information | |||||||||||
| Prepaid expenses and other | June 30, 2026 | December 31, 2025 | |||||||||
| Prepaid expenses and deposits | $ | $ | |||||||||
| Income tax receivable | |||||||||||
| Inventory | |||||||||||
| Contract asset | |||||||||||
| Assets held for sale | |||||||||||
| Prepaid expenses and other | $ | $ | |||||||||
| Other Assets | |||||||||||
| Investments | $ | $ | |||||||||
| Contract costs | |||||||||||
| Contract asset - long term | |||||||||||
| Total other assets | $ | $ | |||||||||
| Accounts payable and accrued liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities | |||||||||||
| Total accounts payable and accrued liabilities | $ | $ | |||||||||
| Other Current Liabilities | |||||||||||
| Customer deposits | $ | $ | |||||||||
| Accreditation fees payable | |||||||||||
| Income taxes payable | |||||||||||
| Other liabilities - current portion | $ | $ | |||||||||
| Total other current liabilities | $ | $ | |||||||||
Inventories
The components of the inventories as of June 30, 2026 and December 31, 2025 were as follows (Dollar amounts in thousands of U.S. dollars):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Finished goods | |||||||||||
| Total Inventories | $ | $ | |||||||||
22. Subsequent Events
(a) Generate Exit Transaction and related agreements
On July 27, 2026, the Company, Ting and certain of the Ting Entities entered into a series of related, definitive agreements (collectively, the "Generate Exit Transaction") with Generate and the Generate Entities. The Generate Exit Transaction resolved the items discussed in "Note.19 Redeemable Preferred Units" and the conditions disclosed with respect to Ting, including the accrued and unpaid preferred return and the Return Breach and corresponding Trigger Event asserted by Generate and described in the Company's Current Report on Form 8-K filed on December 5, 2025 and in "Note.19 Redeemable Preferred Units". The principal agreements are as follows:
Purchase and cancellation of Series A Preferred Units:
Under the Unit Purchase and Exit Agreement dated July 27, 2026 ("the Unit Purchase and Exit Agreement"), the Company acquired from Generate all of the issued and outstanding Series A Preferred Units of Ting for cash consideration of $3.0 million and contingent consideration as described below. The Company was also required to make an investment in Ting Fiber LLC of $5.0 million, which was effected via an intercompany loan. Immediately following the acquisition, the Series A Preferred Units were surrendered, cancelled and retired. In connection with the transaction, Generate ceased to be a preferred member of Ting, waived and released all rights, powers and preferences associated with the Series A Preferred Units (including all redemption, mandatory-redemption, conversion and call rights), and withdrew all outstanding notices, including the notice asserting a Return Breach and Trigger Event. The parties also exchanged mutual releases. As of June 30, 2026, the carrying amount of the redeemable preferred units presented on the Condensed Consolidated Balance Sheet was $147.4 million (net of $0.2 million of deferred preferred financing costs), which was classified as a current liability as previously disclosed.
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Contingent consideration:
Under the Unit Purchase and Exit Agreement, the Company may be required to make additional payments to Generate, including (i) a payment of up to $5.0 million if an additional investment of $12.5 million in Ting is not made within twelve months of closing, (ii) a payment of $2.0 million if a separately granted option for Generate to acquire certain partner markets is not exercised by Generate within twelve months, and (iii) a payment of any excess proceeds should a sale of Ting be consummated within twelve months of closing, being an amount in excess of the sum of; the outstanding balance of the 2023 and 2024 Term Notes, the investments in Ting, and any consideration paid to Generate in connection with the Generate Exit Transaction, in each case subject to the terms and priorities set out in the agreement. Interest accrues on any overdue payment at 10 % per annum.
(b) Amendment to Credit Agreement
On the same date, the Company entered into a Third Amendment to the 2023 Credit Agreement, which (i) extended the maturity date of the facility from September 22, 2027 to July 27, 2029 (with the exception of one syndicate member holding a $27.5 million commitment, which the Company has commenced discussions to replace with an existing or new syndicate member), and (ii) amended the negative covenants to permit the Company to invest in the Ting business, subject to specified conditions and the existing financial covenants. Key financial covenants remained substantially the same, including a maximum Total Funded Debt to Adjusted EBITDA ratio of 3.75 x and a minimum interest coverage ratio of 3.0 x.
(c) Transactions between the Company and Ting
In addition, on July 27, 2026, the Company provided an interest-bearing loan to Ting of $5.0 million and acquired a data center asset from Ting for aggregate consideration of $6.0 million, thereby providing Ting with funding sufficient to meet its obligations as they come due within one year of the issuance date.
The Company is evaluating the accounting for the Generate Exit Transaction, the Company expects to recognize a gain on the extinguishment of the preferred units in the third quarter of 2026. The final amount and its classification are subject to completion of the Company's assessment of the contingent consideration and the applicable accounting treatment.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains, in addition to historical information, forward-looking statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” and other similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this report include statements regarding, among other things, the competition we expect to encounter as our business develops and competes in a broader range of Internet services, the Company's foreign currency requirements, specifically for the Canadian dollar and Euro; Wavelo, and Ting subscriber growth and retention rates; the number of new, renewed and transferred-in domain names we register as our business develops and competes; the effect of a potential generic top level domain (“gTLD”) expansion by the Internet Corporation for Assigned Names and Numbers (“ICANN”) on the number of domains we register and the impact it may have on related revenues; our belief regarding the underlying platform for our domain services; our expectation regarding the trend of sales of domain names; our belief that, by increasing the number of services we offer, we will be able to generate higher revenues; our expectation regarding litigation; the potential impact of current and pending claims on our business; our valuations of certain deferred tax assets; our expectation to collect our outstanding receivables, net of our credit losses; our expectation regarding fluctuations in certain expense and cost categories; our expectations regarding liquidity and capital requirements of the Ting Internet business, as well as the outcome of any process to access strategic alternatives for this business; our expectations regarding the evaluation of our strategic alternatives for Ting; our expectations regarding our unrecognized tax; our expectations regarding cash from operations to fund our business; the impact of cancellations of or amendments to market development fund programs under which we receive funds; our expectation regarding our ability to manage realized gains/losses from foreign currency contracts; our partnership with an affiliate of Generate (as defined below); and general business conditions and economic uncertainty. 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. Many factors affect our ability to achieve our objectives and to successfully develop and commercialize our services including:
•Our ability to continue to generate sufficient working capital to meet our operating requirements;
•Our ability to service our debt commitments and preferred unit commitments;
•Our ability to maintain a good working relationship with our vendors and customers;
•The ability of vendors to continue to supply our needs;
•Actions by our competitors;
•Our ability to attract and retain qualified personnel in our business and address operational efficiencies;
•Our ability to effectively manage our business;
•The effects of any material impairment of our goodwill or other indefinite-lived intangible assets;
•Our ability to obtain and maintain approvals from regulatory authorities on regulatory issues;
•Our ability to invest in the build-out of fiber networks into selected towns and cities to provide Internet access services to residential and commercial customers while maintaining the development and sales of our established services;
•Adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, including with respect to the impact of the Tax Cuts and Jobs Act of 2017 and, the Organization for Economic Cooperation and Development ("OECD") model global minimum tax rules;
•Our ability to effectively respond or comply with new data protection regulations and any conflicts that may arise between such regulations and our ICANN contractual requirements;
•The application of business judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given that the ultimate tax determination is uncertain;
•Our ability to effectively integrate acquisitions;
•Our ability to effectively manage any impact of the Generate Exit Transaction;
•Our ability to monitor, assess and respond to changing geopolitical and economic environments including rising inflation and interest rates, tariffs and trade disputes, and geopolitical conflict;
•Our ability to collect anticipated payments from EchoStar in connection with the 10-year payment stream that is a function of the margin generated by the transferred subscribers over a 10-year period pursuant to the terms of the Asset Purchase Agreement dated August 1, 2020 between the Company and DISH Wireless LLC ("EchoStar", DISH's post-merger parent) (the “EchoStar Purchase Agreement”);
•Our ability to maintain compliance with the operational and financial covenants of the 2023 and 2024 Notes as defined in "Note 8. Notes Payable" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report, which provides the Company with financing to invest in the expansion of fiber networks;
•Our ability to maintain the safety and security of our systems and data;
•Our ability to successfully identify and implement any potential strategic alternatives for Ting;
•Pending or new litigation; and
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•Factors set forth under the caption “Item 1A Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 12, 2026 (the “2025 Annual Report”) and in "Item 1A Risk Factors" in Part II of this Quarterly Report.
This list of factors that may affect our future performance and financial and competitive position and the accuracy of forward-looking statements is illustrative, but it is by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements included in this document are based on information available to us as of the date of this document, and we assume no obligation to update these cautionary statements or any forward-looking statements, except as required by law. These statements are not guarantees of future performance.
We qualify all the forward-looking statements contained in this Quarterly Report on Form 10-Q by the foregoing cautionary statements.
OVERVIEW
Our mission is to provide simple useful services that help people unlock the power of the Internet.
We accomplish this by reducing the complexity of our customers’ experience as they access the Internet (at home or on the go) and while using Internet
We accomplish this by reducing the complexity of our customers’ experience as they access the Internet (at home or on the go) and while using Internet
services such as domain name registration, email and other Internet related services. We are organized into three operating and reporting segments - Ting, Wavelo, and
Tucows Domains. Each segment is differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. The Ting
segment contains the operating results of our retail high speed Internet access operations, including its wholly owned subsidiaries - Cedar and Simply Bits. The Wavelo
segment includes our platform and professional services offerings, as well as the billing solutions to Internet services providers ("ISPs"). Tucows Domains includes
wholesale and retail domain name registration services, as well as value added services derived through our OpenSRS, ENom, Ascio, EPAG and Hover brands.
Our Chief Executive Officer ("CEO"), who is also our chief operating decision maker, regularly reviews the operating results of Ting, Wavelo and Tucows
Domains as three distinct segments in order to make key operating decisions as well as evaluate segment performance. Certain revenues and expenses disclosed under
the Corporate category are excluded from segment adjusted earnings before interest, tax, depreciation and amortization ("Segment Adjusted EBITDA") results as they
are centrally managed and not monitored by or reported to our CEO by segment, including mobile retail services, eliminations of intercompany transactions, portions of
finance and human resources that are centrally managed, legal and corporate Information Technology ("IT") shared services.
For the three months ended June 30, 2026 and June 30, 2025, we reported net revenue of $100.6 million and $98.5 million, respectively.
For the six months ended June 30, 2026 and June 30, 2025, we reported net revenue of $197.2 million and $193.1 million, respectively.
Ting
Ting and its wholly owned subsidiaries - Cedar and Simply Bits, includes the provision of high-speed Internet access services to select towns throughout the
United States, with operations focused on serving existing markets. Our primary sales channel is through the Ting website. The primary focus of this segment is to provide reliable Gigabit Fiber and Fixed Internet services to consumer and business customers. Revenues from Ting Internet are all generated in the U.S. and are billed on a monthly basis and have no fixed contract terms, aside from certain bespoke contracts with business customers.
As of June 30, 2026, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 137,000 partner infrastructure serviceable addresses and 60,500 active subscribers under its management; compared to having access to 132,000 owned infrastructure serviceable addresses, 66,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management as of June 30, 2025. These figures exclude any changes in serviceable addresses and accounts attributable to Simply Bits.
On July 27, 2026, the Company, Ting and certain of its affiliated entities, the “Ting Entities,” entered into a series of related, definitive agreements (collectively, the "Generate Exit Transaction") with Generate TF Holdings, LLC (“Generate”) and certain of its affiliated entities (the “Generate Entities”). See "Note 22. Subsequent Events” in the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report for further information. The Generate Exit Transaction resolved the conditions disclosed with respect to Ting, including the accrued and unpaid preferred return and the Return Breach and corresponding Trigger Event asserted by Generate and described in the Company's Current Report on Form 8-K filed on December 5, 2025 and the items discussed above in “Note 19. Redeemable Preferred Units” of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report. As a result of the Generate Exit Transaction, Generate ceased to be a preferred member of Ting, waived and released all rights, powers and preferences associated with the Series A Preferred Units (including all redemption, mandatory-redemption, conversion and call rights), and withdrew all outstanding notices, including the notice asserting a Return Breach and Trigger Event. The parties also exchanged mutual releases.
Wavelo
Wavelo includes the provision of full-service platforms and professional services providing a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools. Wavelo's focus is to provide accessible telecom software to CSPs globally, minimizing network and technical barriers and improving Internet access worldwide. Wavelo's suite of flexible, cloud-based software simplifies the management of mobile and Internet network access, enabling CSPs to better utilize their existing infrastructure, focus on customer experience and scale their businesses faster. Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform, and Ting integrating Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. The Wavelo segment also includes the Platypus brand and platform, our legacy billing solution for ISPs. The revenues from Wavelo's MONOS, ISOS, SM and professional services are all generated in the U.S. and our customer
agreements have set contract lengths with the underlying CSP. Similarly, Wavelo's revenues from Platypus are largely generated in the U.S., with a small portion earned
in Canada and other countries.
Tucows Domains
Tucows Domains includes whole sale and retail domain name registration services, as well as value added services derived through our OpenSRS, ENom, Ascio, EPAG, and Hover brands. Tucows Domains generates revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations. In addition, we earn revenues from the sale of retail domain name registration and email services to individuals and small businesses. Tucows Domains revenues are attributed to the country in which the contract originates, which is primarily in Canada and the U.S for OpenSRS and ENom brands whereas it is primarily in European nations for Ascio and EPAG.
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Our primary distribution channel is a global network of 32,000 resellers that operate in approximately 200 countries and who typically provide their customers, the end-users of Internet-based services, with solutions for establishing and maintaining an online presence. Our primary focus is serving the needs of this network of resellers by providing the broadest portfolio of gTLD and country code top-level domain options and related services, a white-label platform that facilitates the provisioning and management of domain names, a powerful Application Program Interface, easy-to-use interfaces, comprehensive management and reporting tools, and proactive and attentive customer service. Our services are integral to the solutions that our resellers deliver to their customers. We provide “second tier” support to our resellers by email, chat and phone in the event resellers experience issues or problems with our services. In addition, our Network Operating Center proactively monitors all services and network infrastructure to address deficiencies before customer services are impacted.
We believe that the underlying platforms for our services are among the most mature, reliable and functional reseller-oriented provisioning and management platforms in our industry, and we continue to refine, evolve and improve these services for both resellers and end-users. Our business model is characterized primarily by non-refundable, up-front payments, which lead to recurring revenue and positive operating cash flow.
Wholesale Domains Services comprise Domain registration services provided to resellers, Tucows Registry Services and WHOIS Privacy Services.
Wholesale, primarily branded as OpenSRS, ENom, EPAG and Ascio, derives revenue from its domain name registration service Together the OpenSRS, ENom, EPAG and Ascio Domain Services manage 21.3 million domain names under the Tucows, ENom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management have decreased by 2.7 million since June 30, 2025.
Value-Added Services include hosted email which provides email delivery and webmail access to millions of mailboxes, Internet security services, publishing tools and other value-added services. All of these services are made available to end-users through a network of web hosts, ISPs, and other resellers around the world. In addition, we also derive revenue by monetizing domain names which are near the end of their lifecycle through expiry auction sale.
Retail, primarily the Hover and ENom portfolio of websites, including ENom, and ENom Central, derive revenues from the sale of domain name registration and email services to individuals and small businesses. Our retail domain services also include our Personal Names Service – based on over 34,000 surname domains – which allows roughly two-thirds of Americans to purchase an email address based on their last name. The retail segment now includes the sale of the rights to its portfolio of surname domains used in connection with our RealNames email service and our Exact Hosting Service, that provides Linux hosting services for individuals and small businesses.
KEY BUSINESS METRICS AND NON-GAAP MEASURES
We regularly review a number of business metrics, including the following key metrics and non-GAAP measures, to assist us in evaluating our business, measure the performance of our business model, identify trends impacting our business, determine resource allocations, formulate financial projections and make strategic business decisions. The following tables set forth the key business metrics that we believe are the primary indicators of our performance for the periods presented:
| Ting Internet | June 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| (in '000's) | |||||||||||
| Internet subscribers accounts under management | 61 | 52 | |||||||||
Internet owned infrastructure serviceable addresses1 | 126 | 132 | |||||||||
Internet partner infrastructure serviceable addresses1 | 137 | 66 | |||||||||
(1)Defined as premises to which Ting has the capability to provide a customer connection in a service area.
| Tucows Domains | June 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| (in 000's) | |||||||||||
Total new, renewed and transferred-in domain name registrations provisions (1) | 9,886 | 10,749 | |||||||||
| Domains under management | 21,324 | 24,019 | |||||||||
(1)Includes all transactions processed under our accreditations for our resellers and our retail brands, as well as transactions processed on behalf of other registrars using our platform.
Adjusted EBITDA
Tucows reports all financial information in accordance with U.S. GAAP. Along with this information, to assist financial statement users in an assessment of our historical performance, we typically disclose and discuss a non-GAAP financial measure, Adjusted EBITDA, on investor conference calls and related events that excludes certain non-cash and other charges as we believe that the non-GAAP information enhances investors’ overall understanding of our financial performance, but should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. Please see discussion of Adjusted EBITDA as well as the Adjusted EBITDA reconciliation to net income in the Results of Operations section below.
OPERATING OPPORTUNITIES, CHALLENGES AND RISKS
Our revenue is primarily realized in U.S. dollars and a major portion of our operating expenses are paid in Canadian dollars. Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar may have a material effect on our business, financial condition and results from operations. In particular, we may be adversely affected by a significant weakening of the U.S. dollar against the Canadian dollar on a quarterly and an annual basis. Our policy with respect to foreign currency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some or all of the impact of foreign currency exchange movements by entering into foreign exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We may
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not always enter into such forward contracts and such contracts may not always be available and economical for us. Additionally, the forward rates established by the contracts may be less advantageous than the market rate upon settlement.
Ting
As an ISP, we have invested and expect to continue to invest in selective fiber to the home (“FTTH”) deployments in select markets in the United States. The investments are a reflection of our ongoing efforts to build FTTH networks via public-private partnerships in communities we identify as having strong, unmet demand for FTTH services. Given the significant upfront build and operational investments for these FTTH deployments, there is risk that we may not fully recover these investments as a result of future technological and regulatory changes, competitive responses from incumbent local providers, and slower than expected market penetration or otherwise.
Strategic Review and Developments
During the year ended December 31, 2025, Ting initiated and currently continues a review process for the Ting business focused on evaluating strategic alternatives to optimize its capital structure and long-term operating model given the ongoing capital needs of Ting. This process has included the exploration of potential asset sales, partnership structures and other strategic transactions involving Ting’s fiber network assets.
In addition, as previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 5, 2025, on December 1, 2025, Ting received written notice from Generate, the holder of Ting’s Series A Preferred Units, asserting that under the Ting Fiber LLC Amended and Restated Limited Liability Company Agreement, dated as of August 11, 2022 (the “LLC Agreement”), a Return Breach and a Trigger Event has occurred as a result of Ting’s failure to pay the quarterly preferred return for two consecutive quarters. Generate has reserved its right to pursue remedies available under the LLC Agreement and applicable law, including the ability to make a request for redemption of all Series A Preferred Units (a “Redemption Request”). As of the date of this report, Generate has not submitted a request for the redemption of all Series A Preferred Units nor sought to exercise any of its remedies under the LLC Agreement. Refer to “Note 19. Redeemable Preferred Units” to the Consolidated Financial Statements for further details.
Under the terms of the LLC Agreement, if Generate were to submit a Redemption Request following a Trigger Event, Ting would be required to redeem all outstanding Series A Preferred Units at the applicable redemption price within 30 days of such request, an estimated $204.9 million. As a result of this contractual provision, the Series A Preferred Units were reclassified from long-term to current liabilities in the Company’s Consolidated Balance Sheet as of December 31, 2025.
Subsequent to June 30, 2026, on July 27, 2026, Tucows acquired all of the outstanding Series A Preferred Units of Ting from Generate, and the units were surrendered, cancelled and retired. See "Note 22. Subsequent Events" in the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report for further information.
The Company does not believe that the Return Breach or Trigger Event has had a material adverse impact on Ting’s day-to-day operations, customer service or network performance.
Wavelo
Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform. More recently, Ting Internet has also integrated Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. With our external platform and professional services revenues concentrated to one customer in EchoStar, we are exposed to significant risk if we are unable to maintain this customer relationship or establish new relationships for any of our Platforms in the future. Additionally, our revenues as a platform provider are directly tied to the subscriber volumes of EchoStar's MVNO or MNO networks, and our profitability is contingent on the ability of EchoStar to continue to add subscribers, either from organic growth or from migration off legacy systems, onto our platforms.
Tucows Domains
The increased competition in the market for Internet services in recent years, which we expect will continue to intensify in the short and long term, poses a material risk for us. As new registrars are introduced, existing competitors expand service offerings and offer price discounts to gain market share, we face pricing pressure, which can adversely impact our revenues and profitability. To address these risks, we have focused on leveraging the scalability of our infrastructure and our ability to provide proactive and attentive customer service to aggressively compete to attract new customers and to maintain existing customers.
Substantially all of our Tucows Domains revenue is derived from domain name registrations and related value-added services from wholesale and retail customers using our provisioning and management platforms. The market for wholesale registrar services is both price sensitive and competitive and is evolving with the introduction of new gTLDs, particularly for large volume customers, such as large web hosting companies and owners of large portfolios of domain names. We have a relatively limited ability to increase the pricing of domain name registrations without negatively impacting our ability to maintain or grow our customer base. Growth in our Tucows Domains revenue is dependent upon our ability to continue to attract and retain customers by maintaining consistent domain name registration and value added service renewal rates and to grow our customer relationships through refining, evolving and improving our provisioning platforms and customer service for both resellers and end-users. In addition, Tucows Domains also generate revenues through the sale of names from our portfolio of domain names and through the OpenSRS, ENom, and Ascio Domain Expiry Streams. Our domains under management and transactions saw a moderate decrease in the latter half of Fiscal 2025, largely as a result of select, low margin customers taking their business in-house. These fluctuations occur occasionally in our business, and with broad, diverse and global nature of our reseller base ensures that margin remains healthy, and will be augmented by the strategies discussed above to continue to grow our revenue base.
From time-to-time certain vendors provide us with market development funds to expand or maintain the market position for their services. Any decision by these vendors to cancel or amend these programs for any reason may result in payments in future periods not being commensurate with what we have achieved during past periods.
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Other opportunities, challenges and risks
The Company is entitled to a long-term payment stream that is a function of the margin generated by the transferred subscribers over the 10-year term of the EchoStar Purchase Agreement executed in the fiscal year ended December 31, 2020 (“Fiscal 2020”). This consideration structure may not prove to be successful or profitable in the long-term to us if the existing subscriber base churns at an above average rate. Additionally, given EchoStar controls the revenues and costs incurred associated with the acquired subscribers, there could arise a situation where profitability for the subscriber base is diminished either by lower price points or cost inflation.
Additionally, as part of the EchoStar Purchase Agreement, the Company retained a small number of customer accounts associated with one MNO agreement that was not reassigned to EchoStar at time of sale. We were subject to the minimum revenue commitments previously agreed to with this excluded MNO agreement. The Company was able to continue adding customers under the excluded MNO network in order to meet the commitment. However, with no direct ability to change customer pricing and limited ability to renegotiate contract costs or significant terms, the Company was unable to meet the minimum commitments with this MNO partner and incurred significant penalties through the prior year; and continued to incur penalties until such a time that the term of the contract completed in January 2026. As of June 30, 2026, the Company did not accrue any further penalties associated with the minimum commitment shortfall in the current period, as the term of the contract was completed. Beyond the term of the contract, the agreement continues month-to-month thereafter, with no expected penalties in the month-to-month arrangement. However, if the Company seeks negotiation to renew the contract for an extended term in support of more favorable per-subscriber rates to improve the margin profile associated with the business, we may be bound by minimum commitments once again. These could be in excess of our customer-based usage, which could increase our cost of revenues and negatively impact our financial results.
Critical Accounting Estimates
The preparation of our Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience, available market information, as applicable, and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Under different assumptions or conditions, the actual results will differ, potentially materially, from those previously estimated. Many of the conditions impacting these assumptions and estimates are outside of the Company's control. Management evaluates its estimates on an on-going basis. There have been no material changes to the critical accounting estimates as previously disclosed in Part II, Item 8 of our 2025 Annual Report as of the reporting date.
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AS COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 NET REVENUES
Ting
Ting and its subsidiaries, Cedar and Simply Bits, includes the provision of high-speed Internet access services to select towns throughout the United States. Our primary sales channel is through the Ting website. The primary focus of this segment is to provide reliable Gigabit Fiber and Fixed Wireless Internet services to consumer and business customers. Generally, Ting Internet services have no fixed contract terms, aside from certain bespoke contracts with business customers.
The Company’s billing cycle for all Ting Internet customers is computed based on the customer’s activation date. Since consideration is collected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access within each reporting period. Incentive marketing credits given to customers are recorded as a reduction of revenue.
Our construction services generate revenue from the design, construction, and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed. Revenue from network construction is recognized over time, as Ting’s performance creates or enhances an asset that the customer controls as it is being constructed. Progress toward completion is measured using an output method, based primarily on network build milestones such as served addresses completed and accepted by the customer. Amounts billed in advance of revenue recognition are recorded as contract liabilities, while amounts recognized in excess of billings are recorded as contract assets. Where services require installation, revenue is not recognized until a customer's service is activated.
In each case, the Company records a reduction of revenues that reflects expected refunds, rebates, and credit card charge-backs at the time of the sale based on historical experiences and current expectations.
Wavelo
Platform Services
Tucows' Platform Services include the following full-service platforms from Wavelo, including MONOS, ISOS, SM and our legacy Platypus ISP Billing software. Under each of these platforms there are a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools. Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform. More recently, Ting Internet has also integrated Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. Wavelo's customers are billed monthly, on a postpaid basis. The monthly fees are variable, based on the volume of their subscribers utilizing the platform during a given month, to which minimums may apply. Customers may also be billed fixed platform fees and granted fixed credits as part of the consideration for long-term contracts. Consideration received is allocated to platform services and bundled professional services and recognized as each service obligation is fulfilled. Any fixed fees for Wavelo are recognized into revenue evenly over the service period, while variable usage fees are recognized each month as they are consumed. Professional services revenue is recognized as the hours of professional services granted to the customer are used or expire. When consideration for these platform services is received before the service is delivered, the revenue is initially deferred and recognized only as the Company performs its obligation to provide services. Likewise, if platform services are delivered before the Company has the unconditional right to invoice the customer, revenue is recognized as a Contract asset.
Other Professional Services
This revenue stream includes any other professional services earned in connection with the Wavelo business from the provision of standalone technology services development work. These are billed based on separate Statement of Work arrangements for bespoke feature development. The Company recognizes revenue at the point-in-time when the final acceptance criteria have been met.
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Tucows Domains
The Company generates Tucows Domains revenues primarily through Wholesale Domains Services, Wholesale Value Added Services and Retail.
Wholesale Domains Services comprise Domain registration services provided to resellers, Tucows Registry Services and WHOIS Privacy Services.
Wholesale Value Added Services comprise Domain-related value-added services provided to resellers, as well as expiry and advertising revenue streams.
Retail services comprise Domain registration contracts provided to retail customers along with related email and WHOIS privacy services.
The Company is an ICANN accredited registrar. The Company is the primary obligor with our reseller and retail registrant customers and is responsible for the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retail registrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to those customers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.
Domain registration and WHOIS Privacy Services
Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new, renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period. Though fees are collected upfront, revenue from domain registrations are recognized ratably over the registration period as domain registration contracts contain a ‘right to access’ license of IP, which is a distinct performance obligation measured over time. The registration period begins once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.
WHOIS Privacy is an ongoing service that protects the personal information of Registrants from public access.
Tucows Registry Services
Tucows Registry Services (“TRS”) provides registry platform and related technical services to operators of generic top-level domains (“gTLDs”), branded top-level domains, and country code top-level domains. These services include processing domain name transactions and maintaining the related infrastructure and support systems required to operate the registry. Revenue is primarily transaction-based and is calculated as a fixed fee per financial transaction processed during the month. Because customers simultaneously receive and consume the benefits of the registry services as they are provided, revenue is recognized in the period in which the transactions occur. Service level credits are treated as variable consideration and are recorded as a reduction of revenue in the period in which they are incurred.
Value Added Services
Domain related value-added services like digital certifications and hosted email provide our resellers and retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services are considered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain related value-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction of the performance obligations.
Expiry
The Company also sells the rights to the Company’s portfolio domains or names acquired through the Company’s domain expiry stream. The domain expiry stream involves domain names whose registration has expired and as per ICANN regulations are placed into a 40-day grace period. Though the domain names do not belong to the registrant during the 40-day grace period, the Company is restricted from allowing others to register them. The Company monetizes its domain expiry stream both through the sale of names and by allowing advertisers to place parked pages advertisements on the domains. Revenue from the sale of domain-name rights through the domain expiry stream is recognized at a point in time when control of the domain-name rights is transferred to the customer.
Advertising
Advertising revenue is derived through domain parking monetization, whereby the Company contracts with third-party Internet advertising publishers to direct web traffic from the Company’s domain expiry stream domains, surname domains and direct navigation domains to advertising websites. Compensation from Internet advertising publishers is calculated variably on a cost-per-action basis based on the number of advertising links that have been visited in a given month. Given that the variable consideration is calculated and paid on a monthly basis, no estimation of variable consideration is required.
Corporate and other - Mobile services and eliminations
Although we still provide mobile telephony services to a small subset of customers retained through the Ting Mobile brand as part of the EchoStar Purchase Agreement executed in Fiscal 2020, this revenue stream no longer represents the Company's strategic focus going forward. Instead, we have transitioned towards being a platform provider for CSPs globally via Wavelo. Retail telephony services and transition services revenues are not part of our reportable segments under ASC 280 and their results are presented as part of the All Other category.
Ting Mobile wireless usage contracts grant customers access to standard talk, text and data mobile services. Ting Mobile contracts are billed based on the customer's selected rate plan, which can either be usage based or an unlimited plan. All rate plan options are charged to customers on a postpaid, monthly basis at the end of their billing cycle. All future revenues associated with Retail Mobile Services stream will only be for this subset of customers retained by the Company, as mentioned above. Ting Mobile services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following each customer's monthly billing cycle. The Company's billing cycle for all Ting Mobile customers is computed based on the customer's activation date. In order to recognize revenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed from the end of each billing cycle to the end of each reporting period. In addition, revenues associated with the sale of wireless devices and accessories are recognized when title and risk of loss is transferred to the customer and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.
These mobile services revenue streams also include transitional services provided to EchoStar. These are billed monthly at set and established rates for services provided in period and include the provision of sales, marketing, order fulfillment, and data analytics related to the legacy customer base sold to EchoStar. The Company recognizes revenue as the Company satisfies its obligations to provide transitional services.
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As a form of consideration for the sale of the customer relationships, the Company receives a payout on the margin associated with the legacy customer base sold to EchoStar, over a period of 10 years. This has been classified as Other Income and not considered revenue in the current period.
The following table presents our net revenues, by revenue source (Dollar amounts in thousands of U.S. dollars):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Ting: | |||||||||||||||||||||||
| Fiber Internet Services | $ | 17,463 | $ | 16,410 | $ | 34,591 | $ | 32,725 | |||||||||||||||
| Construction revenue | 4,132 | - | 6,378 | - | |||||||||||||||||||
| Total Fiber | 21,595 | 16,410 | 40,969 | 32,725 | |||||||||||||||||||
| Wavelo: | |||||||||||||||||||||||
| Platform Services | 11,755 | 12,656 | 23,316 | 24,052 | |||||||||||||||||||
| Other professional services | - | - | - | - | |||||||||||||||||||
| Total Wavelo | 11,755 | 12,656 | 23,316 | 24,052 | |||||||||||||||||||
| Tucows Domains | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Domain Services | 48,836 | 51,557 | 97,641 | 101,561 | |||||||||||||||||||
| Value Added Services | 6,303 | 5,757 | 11,763 | 11,660 | |||||||||||||||||||
| Total Wholesale | 55,139 | 57,314 | 109,404 | 113,221 | |||||||||||||||||||
| Retail | 9,854 | 10,290 | 19,689 | 19,638 | |||||||||||||||||||
| Total Tucows Domains | 64,993 | 67,604 | 129,093 | 132,859 | |||||||||||||||||||
| Corporate and other*: | |||||||||||||||||||||||
| Mobile Services and eliminations | 2,213 | 1,793 | 3,835 | 3,436 | |||||||||||||||||||
| $ | 100,556 | $ | 98,463 | $ | 197,213 | $ | 193,072 | ||||||||||||||||
*Corporate and all other includes revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes
of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.
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The following table presents our net revenues, by revenue source, as a percentage of total net revenues (Dollar amounts in thousands of U.S. dollars):
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Ting: | |||||||||||||||||||||||
| Fiber Internet Services | 17 | % | 17 | % | 18 | % | 17 | % | |||||||||||||||
| Construction revenue | 4 | % | 0 | % | 3 | % | 0 | % | |||||||||||||||
| Total Fiber | 21 | % | 17 | % | 21 | % | 17 | % | |||||||||||||||
| Wavelo: | |||||||||||||||||||||||
| Platform Services | 12 | % | 13 | % | 12 | % | 12 | % | |||||||||||||||
| Other professional services | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||||||
| Total Wavelo | 12 | % | 13 | % | 12 | % | 12 | % | |||||||||||||||
| Tucows Domains: | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Domain Services | 49 | % | 52 | % | 50 | % | 53 | % | |||||||||||||||
| Value Added Services | 6 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||
| Total Wholesale | 55 | % | 58 | % | 55 | % | 59 | % | |||||||||||||||
| Retail | 10 | % | 10 | % | 10 | % | 10 | % | |||||||||||||||
| Total Tucows Domains | 65 | % | 68 | % | 65 | % | 69 | % | |||||||||||||||
| Corporate and other*: | |||||||||||||||||||||||
| Mobile services and eliminations | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||||||||
| 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||
*Corporate and all other includes revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes
of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.
Total net revenues for the three months ended June 30, 2026 increased by $2.1 million, or 2%, to $100.6 million when compared to the three months ended June 30, 2025. The increase in net revenue was driven by Ting and Mobile Services and eliminations; partially offset by a decline in revenues from Tucows Domains and Wavelo. The Ting segment increased $5.2 million in the current period as a result of new construction revenue in Laguna Woods Village, California, United States, as well as from subscriber growth on our Fiber network across the United States. Mobile Services and eliminations increased by $0.4 million, also attributable to subscriber growth. The Tucows Domains segment decreased $2.6 million primarily driven by a decline in domain names under management. The Wavelo segment decreased $0.9 million in the current period primarily driven by less bundled professional services provided to customers in the current period.
Total net revenues for the six months ended June 30, 2026 increased by $4.1 million, or 2%, to $197.2 million when compared to the six months ended June 30, 2025. The increase in net revenue was driven by Ting and Mobile Services and eliminations; partially offset by a decline in revenues from Tucows Domains and Wavelo. The Ting segment increased $8.2 million in the current period as a result of new construction revenue in Laguna Woods Village, California, United States, as well as from subscriber growth on our Fiber network across the United States. Mobile Services and eliminations increased by $0.4 million attributable to subscriber growth. The Tucows Domains segment decreased $3.8 million primarily driven by a decline in domain names under management. The Wavelo segment decreased $0.7 million in the current period primarily driven by a less bundled professional services provided to customers in the current period.
Contract liabilities at June 30, 2026, increased by $2.5 million to $155.4 million from $152.9 million at December 31, 2025. This was primarily driven by Tucows Domains as a result of the increase in current period billings for domain name registrations and service renewals, characteristic of the seasonal renewal pattern we see. This was partially offset by a decrease in Ting driven by the drawdown of previously deferred revenue recognized based on construction progress for the Laguna Woods Village project.
During both the three and six months ended June 30, 2026, a customer, EchoStar, within our Wavelo segment accounted for 11% of total net revenues. EchoStar accounted for 12% of total net revenues during both the three and six months ended June 30, 2025. EchoStar accounted for 42% of total accounts receivable at June 30, 2026 and 44% of total accounts receivable at December 31, 2025. Though a significant portion of the Company’s domain services revenues are prepaid by our customers, where the Company does collect receivables, management judgment is required at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing basis, we assess the ability of our customers to make required payments. Our allowance for doubtful accounts was $1.3 million as of June 30, 2026 and $1.3 million as of December 31, 2025, respectively. Based on this assessment, we expect the carrying amount of our outstanding receivables, net of allowance for doubtful accounts, to be fully collected.
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Ting
Ting generated $21.6 million in net revenue during the three months ended June 30, 2026, up $5.2 million, or 32%, compared to the three months ended June 30, 2025. This growth is driven primarily by new construction revenue and service revenue from Laguna Woods Village, California, United States, as well as from subscriber growth across our Fiber network and the continued growth of available serviceable addresses in Ting towns throughout the United States.
Ting generated $41.0 million in net revenue during the six months ended June 30, 2026, up $8.2 million, or 25%, compared to the six months ended June 30, 2025. This growth is driven primarily by new construction revenue and service revenue from Laguna Woods Village, California, United States, as well as from subscriber growth across our Fiber network and the continued growth of available serviceable addresses in Ting towns throughout the United States.
As of June 30, 2026, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 137,000 partner infrastructure serviceable addresses and 60,500 active subscribers under its management; compared to having access to 132,000 owned infrastructure serviceable addresses, 66,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management as of June 30, 2025. These figures exclude any changes in serviceable addresses and accounts attributable to the Simply Bits acquisition.
Wavelo
Platform Services
Net revenues from Wavelo Platform Services for the three months ended June 30, 2026, decreased by $0.9 million, or 7%, to $11.8 million as compared to the three months ended June 30, 2025. The decrease in net revenue is driven by less bundled professional services provided to customers in the current period. This decrease was partially offset by incremental revenues from both existing and new customers. Wavelo revenues continue to benefit from our customer's own subscriber growth. Intersegment revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and all other - Mobile Services and Eliminations.
Net revenues from Wavelo Platform Services for the six months ended June 30, 2026, decreased by $0.7 million, or 3%, to $23.3 million as compared to the six months ended June 30, 2025. The decrease in net revenue is driven by less bundled professional services provided to customers in the six months ended June 30, 2025. This decrease was partially offset by incremental revenues from both existing and new customers. Wavelo revenues continue to benefit from our customer's own subscriber growth. Intersegment revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and all other - Mobile Services and Eliminations.
Other Professional Services
Net revenues from Other Professional Services was NIL for both the three months ended June 30, 2026 and June 30, 2025, as well as the six months ended June 30, 2026 and the six months ended June 30, 2025. These revenues relate to the provision of standalone technology services development work for our CSP customers and are non-recurring and often one-time in nature, and expectedly can fluctuate period over period. These revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers.
Tucows Domains
Wholesale - Domain Services
During the three months ended June 30, 2026, Wholesale domain services net revenue decreased by $2.7 million, or 5%, to $48.8 million as compared to the three months ended June 30, 2025. Decreases from Wholesale domain services domain registrations were driven by lower billings due to a decline in domain names under management since June 30, 2025.
During the six months ended June 30, 2026, Wholesale domain services net revenue decreased by $3.9 million, or 4%, to $97.6 million as compared to the six months ended June 30, 2025. Decreases from Wholesale domain services domain registrations were driven by lower billings due to a decline in domain names under management since June 30, 2025.
As of June 30, 2026, together, the OpenSRS, ENom, EPAG, and Ascio Domain Services manage 21.3 million domain names under the Tucows, ENom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management have decreased by 2.7 million since June 30, 2025, driven by some resellers migrating management of their domains in-house.
Wholesale - Value Added Services
During the three months ended June 30, 2026, value-added services net revenue increased by $0.5 million, or 9%, to $6.3 million as compared to the three months ended June 30, 2025. The increase in value-added service revenue was driven by strong expiry auction sales in the current period, slightly offset by a small decrease in certificates sales and storefront revenue.
During the six months ended June 30, 2026, value-added services net revenue increased by $0.1 million, or 1%, to $11.8 million as compared to the six months ended June 30, 2025. The increase in value-added service revenue was driven by strong expiry auction sales in the current period, along with increased Email revenue, slightly offset by a small decrease in certificates sales and storefront revenue.
Retail
During the three months ended June 30, 2026, retail domain services net revenue decreased by $0.4 million, or 4%, to $9.9 million as compared to the three months ended June 30, 2025. This was driven by a decrease in portfolio sales, slightly offset by Exact hosting acquisition revenue.
During the six months ended June 30, 2026, retail domain services net revenue increased by $0.1 million, or less than 1%, to $19.7 million as compared to the six months ended June 30, 2025. This was primarily driven by Exact hosting acquisition revenue and passthrough price increases in RealNames in the current period, slightly offset by a decrease in portfolio sales.
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Corporate and other - Mobile Services and Eliminations
Net revenues from Mobile Services and eliminations for the three months ended June 30, 2026 increased by $0.4 million or 23%, to $2.2 million as compared to the three months ended June 30, 2025. This was driven by subscriber growth across both Ting and Mobile Services.
Net revenues from Mobile Services and eliminations for the six months ended June 30, 2026 increased by $0.4 million or 12%, to $3.8 million as compared to the six months ended June 30, 2025. This was driven by subscriber growth across both Ting and Mobile Services.
COST OF REVENUES
Ting
Cost of revenues primarily includes the costs for provisioning high speed Internet access for Ting and its subsidiaries, Cedar and Simply Bits, which is comprised of network access fees paid to third-parties to use their network, leased circuit costs to directly support enterprise customers, the personnel and related expenses (excluding costs eligible for capitalization) for the physical planning, design, construction, and build out of the physical Fiber network, and as well as personnel and related expenses (excluding costs eligible for capitalization) for the installation, activation, repair, maintenance and overall field service delivery of the Ting business. Other costs include field vehicle expenses, and small sundry equipment and supplies consumed in building the Fiber network.
Cost of revenues for construction services relate to costs for the design, construction, and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed.
Wavelo
Platform Services
Cost of revenues to provide the MONOS, ISOS and SM platforms, as well as our legacy Platypus ISP Billing software services including network access, provisioning and billing services for CSPs. This includes the amortization of any capitalized contract fulfillment costs over the period consistent with the pattern of transferring network access, provisioning and billing services to which the cost relates. Additionally, this includes any fees paid to third-party public cloud hosting or other service providers for customer-specific platform deployment or delivery costs.
Other Professional Services
Cost of revenues to provide standalone technology services development work to our CSP customers to help support their businesses. This includes any personnel and contractor fees for any client service resources retained by the Company. Only a subset of the Company's employee base provides professional services to our customers. This cost reflects that group of resources.
Tucows Domains
Wholesale - Domain Services
Cost of revenues for domain registrations represents the amortization of registry and accreditation fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are initially recorded as prepaid domain registry fees. This accounting treatment reasonably approximates a recognition pattern that corresponds with the provision of the services during the period. Market development fund rebates, provided by registries as incentives for certain top-level domains, are reflected as a reduction to cost of goods sold in the month they are received.
Wholesale - Value-Added Services
Costs of revenues for value-added services include licensing and royalty costs related to the provisioning of certain components for hosted email and fees paid to third-party hosting services. Fees payable for trust certificates and storefront customer domains are amortized on a basis consistent with the provision of service, generally one year, while email hosting fees and monthly printing fees are included in cost of revenues in the month they are incurred.
Retail
Costs of revenues for our provision and management of Internet services through our retail site, Hover.com, include the amortization of registry fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are recorded as prepaid domain registry fees and are expensed ratably over the renewal term. Costs of revenues for our surname portfolio represent the amortization of registry fees for domains added to our portfolio over the renewal period, which is generally one year, the value attributed under intangible assets to any domain name sold and any impairment charges that may arise from our assessment of our domain name intangible assets.
Corporate and other- Mobile Services and Eliminations
Cost of revenues for retail mobile services includes the costs of provisioning mobile services, which is primarily our customers' voice, messaging, data usage provided by our MNO partner, and the costs of providing mobile phone hardware, which is the cost of mobile phone devices and SIM cards sold to our customers, order fulfillment related expenses, and inventory write-downs. Included in the costs of provisioning mobile services are any penalties associated with the minimum commitments with our MNO partner.
These mobile services costs also include the personnel and related costs of transitional services provided to EchoStar. These are billed monthly at set and established rates for services provided in period and include the provision of sales, marketing, order fulfillment, and data analytics related to the legacy customer base sold to EchoStar. The Company recognizes costs as the Company satisfies its obligations to provide professional services.
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Network Expenses
Network expenses include personnel and related expenses related to platform and network site reliability engineering, network operations centers, IT infrastructure and supply chain teams that support our various business segments. It also includes the depreciation and any impairment charges of property and equipment related to our networks and platforms, amortization of any intangible assets related to our networks and platforms, communication and productivity tool costs, and equipment maintenance costs. Communication and productivity tool costs include collaboration, customer support, bandwidth, co-location and provisioning costs we incur to support the supply of all our services across our segments.
The following table presents our cost of revenues, by revenue source:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Ting: | |||||||||||||||||||||||
| Fiber Internet Services | $ | 6,397 | $ | 8,706 | $ | 13,017 | $ | 14,543 | |||||||||||||||
| Construction revenue | 3,248 | - | 5,255 | - | |||||||||||||||||||
| Total Fiber | 9,645 | 8,706 | 18,272 | 14,543 | |||||||||||||||||||
| Wavelo: | |||||||||||||||||||||||
| Platform Services | 392 | 95 | 718 | 232 | |||||||||||||||||||
| Other professional services | - | - | - | - | |||||||||||||||||||
| Total Wavelo | 392 | 95 | 718 | 232 | |||||||||||||||||||
| Tucows Domains | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Domain Services | 38,800 | 41,193 | 77,582 | 81,575 | |||||||||||||||||||
| Value Added Services | 317 | 456 | 637 | 936 | |||||||||||||||||||
| Total Wholesale | 39,117 | 41,649 | 78,219 | 82,511 | |||||||||||||||||||
| Retail | 4,299 | 4,395 | 8,552 | 8,573 | |||||||||||||||||||
| Total Tucows Domains | 43,416 | 46,044 | 86,771 | 91,084 | |||||||||||||||||||
| Corporate and other*: | |||||||||||||||||||||||
| Mobile Services and eliminations | 4,819 | 4,224 | 9,395 | 8,371 | |||||||||||||||||||
| Network Expenses: | |||||||||||||||||||||||
| Network, other costs | 6,239 | 6,458 | 12,107 | 11,633 | |||||||||||||||||||
| Network, depreciation and amortization cost | 10,261 | 10,826 | 20,036 | 21,568 | |||||||||||||||||||
| Total Network Expenses | 16,500 | 17,284 | 32,143 | 33,201 | |||||||||||||||||||
| $ | 74,772 | $ | 76,353 | $ | 147,299 | $ | 147,431 | ||||||||||||||||
| Decrease | $ | (1,581) | $ | (132) | |||||||||||||||||||
| Decrease - percentage | (2 | %) | 0 | % | |||||||||||||||||||
*Corporate and all other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.
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The following table presents our cost of revenues, as a percentage of total cost of revenues for the periods presented:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Ting: | |||||||||||||||||||||||
| Fiber Internet Services | 9 | % | 11 | % | 9 | % | 10 | % | |||||||||||||||
| Construction services | 4 | % | 0 | % | 4 | % | 0 | % | |||||||||||||||
| Total Ting | 13 | % | 11 | % | 12 | % | 10 | % | |||||||||||||||
| Wavelo: | |||||||||||||||||||||||
| Platform Services | 1 | % | 0 | % | 0 | % | 0 | % | |||||||||||||||
| Other professional services | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||||||
| Total Wavelo | 1 | % | 0 | % | 0 | % | 0 | % | |||||||||||||||
| Tucows Domains: | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Domain Services | 52 | % | 53 | % | 53 | % | 55 | % | |||||||||||||||
| Value Added Services | 0 | % | 1 | % | 0 | % | 1 | % | |||||||||||||||
| Total Wholesale | 52 | % | 54 | % | 53 | % | 56 | % | |||||||||||||||
| Retail | 6 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||
| Total Tucows Domains | 58 | % | 60 | % | 59 | % | 62 | % | |||||||||||||||
| Corporate and other*: | |||||||||||||||||||||||
| Mobile services and eliminations | 6 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||
| Network Expenses: | |||||||||||||||||||||||
| Network, other costs | 8 | % | 9 | % | 8 | % | 7 | % | |||||||||||||||
| Network, depreciation and amortization cost | 14 | % | 14 | % | 14 | % | 15 | % | |||||||||||||||
| 22 | % | 23 | % | 22 | % | 22 | % | ||||||||||||||||
| 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||
*Corporate and all other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.
Total cost of revenues for the three months ended June 30, 2026, decreased by $1.6 million or 2%, to $74.8 million from $76.4 million in the three months ended June 30, 2025. The three-month decrease in cost of revenues was driven by Tucows Domains and Network Expenses, and partially offset by increases across Ting, Mobile Service and eliminations, and Wavelo. The decrease in Tucows Domains of $2.6 million was primarily driven by a decline in domain names under management. The decrease in Network Expenses of $0.8 million was primarily driven by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses. The increase in Ting of $0.9 million is aligned with growth in active subscribers, as well as new costs associated with construction services; offset by a one-time lease accounting adjustment in the prior period. The increase in Mobile Services and eliminations of $0.6 million was primarily a result of higher mobile telephony services costs due to plan mix changes impacting usage in the current period. The increase in Wavelo of $0.3 million was primarily driven by the recognition of project costs related to bundled professional services.
Total cost of revenues for the six months ended June 30, 2026, decreased by $0.1 million or less than 1%, to $147.3 million from $147.4 million in the six months ended June 30, 2025. The six-month decrease in cost of revenues was driven by Tucows Domains and Network Expenses, and partially offset by increases across Ting, Mobile Service and eliminations, and Wavelo. The decrease in Tucows Domains of $4.3 million was primarily driven by a decline in domain names under management. The decrease in Network Expenses of $1.1 million was primarily driven by a decrease in depreciation following sale of assets. The increase in Ting of $3.7 million is aligned with growth in active subscribers, as well as new costs associated with construction services; offset by a one-time lease accounting adjustment in the prior period. The increase in Mobile Services and eliminations of $1.0 million was primarily a result of higher mobile telephony services costs due to plan mix changes impacting usage in the current period. The increase in Wavelo of $0.5 million was primarily driven by the recognition of project costs related to bundled professional services.
Deferred costs of fulfillment as of June 30, 2026, increased by $3.1 million, or 3%, to $116.1 million from $113.0 million at December 31, 2025. This was primarily driven by Tucows Domains with an increase of $2.4 million from the increase in billings since December 31, 2025 for domain name registrations and service renewals, characteristic of the seasonal renewal pattern we see during the beginning of a Fiscal Year. This was furthered by an increase in Ting of $0.7 million related to Laguna Woods Village, California, United States construction mobilization.
Ting
During the three months ended June 30, 2026, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $0.9 million, or 11%, to $9.6 million as compared to the three months ended June 30, 2025. The prior period included a $3.0 million one-time Ting lease
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accounting adjustment to true up lease expense for three partner network leases, increasing costs. Normalizing for this impact in the current period results in an increase of $3.9 million, of which $0.7 million is aligned with the subscriber and serviceable address growth across our Fiber network, and $3.2 million related to new costs associated with construction services. Both these increases are consistent with the discussion in the Net Revenue section above.
During the six months ended June 30, 2026, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $3.7 million, or 26%, to $18.3 million as compared to the six months ended June 30, 2025. The prior period included a $3.0 million one-time Ting lease accounting adjustment to true up lease expense for three partner network leases, increasing costs. Normalizing for this impact in the current period results in an increase of $6.7 million, of which $1.4 million is aligned with the subscriber and serviceable address growth across our Fiber network, and $5.3 million related to new costs associated with construction services. Both these increases are consistent with the discussion in the Net Revenue section above.
Wavelo
Platform Services
Cost of revenues from Wavelo Platform Services for the three months ended June 30, 2026 increased by $0.3 million, or 313%, to $0.3 million as compared to the three months ended June 30, 2025. This was driven by the recognition of additional project costs related to providing bundled professional services to EchoStar.
Cost of revenues from Wavelo Platform Services for the six months ended June 30, 2026 increased by $0.5 million, or 209%, to $0.7 million as compared to the six months ended June 30, 2025. This was driven by the recognition of additional project costs related to providing bundled professional services to EchoStar.
Other Professional Services
Cost of revenues from Other Professional Services was NIL for both the three months ended June 30, 2026 and June 30, 2025, as well as the the six months ended June 30, 2026 and for the six months ended June 30, 2025. Costs of revenues to provide other professional services change depending on the nature and scope of work we are engaged to perform for our customers for select statements of work. These cost of revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers. This is aligned to the net revenues from other professional services discussed above.
Tucows Domains
Wholesale - Domain Services
Costs for Wholesale domain services for the three months ended June 30, 2026, decreased by $2.4 million, or 6%, to $38.8 million, as compared to $41.2 million for the three months ended June 30, 2025. Decreases from Wholesale domain registrations were primarily driven by a decline in domain names under management since June 30, 2025 as some resellers migrated management of their domains in-house. The decrease is aligned to the decrease in Net Revenues discussed above.
Costs for Wholesale domain services for the six months ended June 30, 2026, decreased by $4.0 million, or 5%, to $77.6 million, as compared to $81.6 million for the six months ended June 30, 2025. Decreases from Wholesale domain registrations were primarily driven by a decline in domain names under management since June 30, 2025 as some resellers migrated management of their domains in-house. The decrease is aligned to the decrease in Net Revenues discussed above.
Wholesale - Value-Added Services
Costs for wholesale value-added services for the three months ended June 30, 2026, decreased by $0.1 million, or 30%, to $0.3 million, as compared to $0.5 million for the three months ended June 30, 2025. This was driven by the slight decrease in certificates sales, aligned to the discussion in Net Revenues above.
Costs for wholesale value-added services for the six months ended June 30, 2026, decreased by $0.3 million, or 32%, to $0.6 million, as compared to $0.9 million for the six months ended June 30, 2025. This was driven by the slight decrease in certificates sales, aligned to the discussion in Net Revenues above.
Retail
Costs for retail domain services for the three months ended June 30, 2026, decreased by $0.1 million, or 2%, to $4.3 million, as compared to $4.4 million for the three months ended June 30, 2025. This was driven by a change in Exact product mix.
Costs for retail domain services for the six months ended June 30, 2026, decreased by less than $0.1 million, or less than 1%, to $8.6 million, as compared to $8.6 million for the six months ended June 30, 2025. This was driven by a change in Exact product mix.
Corporate and other - Mobile Services and Eliminations
Cost of revenues from Mobile Services and Eliminations for the three months ended June 30, 2026, increased by $0.6 million or 14%, to $4.8 million as compared to the three months ended June 30, 2025. The increase is primarily driven by increased costs associated with mobile telephony services from the small group of customers retained by the Company as part of the EchoStar Purchase Agreement, and less so from any transition services related costs. The increase is driven by subscriber growth with new subscribers joining on unlimited plans with higher data usage profiles. Some of the cost increase period over period is also a result of usage costs associated with long-distance charges from an isolated instance of unauthorized traffic. The Company accrued no minimum penalties associated with the MNO minimum commitment shortfall in the three months ended June 30, 2026, as compared to $1.1 million in the three months ended June 30, 2025. The company incurred penalties through January 2026, at which point the initial term of the contract was complete. The contract automatically continued month-to-month thereafter, with no expected penalties in the month-to-month arrangement.
Cost of revenues from Mobile Services and Eliminations for the six months ended June 30, 2026, increased by $1.0 million or 12%, to $9.4 million as compared to the six months ended June 30, 2025. The increase is primarily driven by increased costs associated with mobile telephony services from the small group of customers retained by the Company as part of the EchoStar Purchase Agreement, and less so from any transition services related costs. The increase is driven by subscriber growth with new subscribers joining on unlimited plans with higher data usage profiles. Some of the cost increase period over period is also a result of usage costs associated with long-distance charges from an isolated instance of unauthorized traffic. The Company accrued $0.2 million in penalties associated with the MNO minimum commitment shortfall in the six months ended June 30, 2026, as compared to $2.2 million in the six months ended June 30, 2025. The company incurred
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penalties through January 2026, at which point the initial term of the contract was complete. The contract automatically continued month-to-month thereafter, with no expected penalties in the month-to-month arrangement.
Network Expenses
Network expenses for the three months ended June 30, 2026, decreased by $0.8 million or 5%, to $16.5 million, as compared to $17.3 million for the three months ended June 30, 2025. The decrease was primarily driven by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses.
Network expenses for the six months ended June 30, 2026, decreased by $1.1 million or 3%, to $32.1 million, as compared to $33.2 million for the six months ended June 30, 2025. This was primarily driven by a decrease in depreciation following sale of assets, slightly offset by incremental depreciation from continued development of Wavelo capitalized platform assets.
SALES AND MARKETING
Sales and marketing expenses consist primarily of personnel costs. These costs include commissions and related expenses of our sales, product management, public relations, call center, support and marketing personnel. Other sales and marketing expenses include customer acquisition costs, advertising and other promotional costs.
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Sales and marketing | $ | 12,553 | $ | 11,945 | $ | 24,656 | $ | 22,937 | |||||||||||||||
| Increase (decrease) over prior period | $ | 608 | $ | 1,720 | |||||||||||||||||||
| Increase (decrease) - percentage | 5 | % | 7 | % | |||||||||||||||||||
| Percentage of net revenues | 12 | % | 12 | % | 13 | % | 12 | % | |||||||||||||||
Sales and marketing expenses for the three months ended June 30, 2026, increased by $0.6 million, or 5%, to $12.6 million as compared to the three months ended June 30, 2025. The increase was primarily driven by marketing, contracted labor spending and stock based compensation expense spend as Ting ramps up marketing and customer acquisition efforts. This was furthered by a slight increase in contracted services and severance costs from Wavelo.
Sales and marketing expenses for the six months ended June 30, 2026, increased by $1.7 million, or 7%, to $24.7 million as compared to the six months ended June 30, 2025. The increase was primarily driven by marketing, contracted labor, and commissions spending as Ting ramps up marketing and customer acquisition efforts. This was furthered by a slight increase in contracted labor, travel, and marketing spend as Wavelo attempts to grow its pipeline and team in support of top line growth.
TECHNICAL OPERATIONS AND DEVELOPMENT
Technical operations and development expenses consist primarily of personnel costs and related expenses required to support the development of new or enhanced service offerings and the maintenance and upgrading of existing infrastructure. This includes expenses incurred in the research, design and development of technology that we use to register domain names, provide Wavelo's platform services, provide Ting's Internet Services, email, retail, domain portfolio and other Internet services. All technical operations and development costs are expensed as incurred.
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Technical operations and development | $ | 4,860 | $ | 4,344 | $ | 9,291 | $ | 8,751 | |||||||||||||||
| Increase (decrease) over prior period | $ | 516 | $ | 540 | |||||||||||||||||||
| Increase (decrease) - percentage | 12 | % | 6 | % | |||||||||||||||||||
| Percentage of net revenues | 5 | % | 4 | % | 5 | % | 5 | % | |||||||||||||||
Technical operations and development expenses for the three months ended June 30, 2026, increased by $0.5 million, or 12%, to $4.9 million when compared to the three months ended June 30, 2025. The increase was primarily driven by Wavelo, followed by Tucows Domains with increases in contracted labor spend, AI token costs, along with lower labor cost recoveries, reflective of both a smaller workforce and a shift in work towards less capital intensive work.
Technical operations and development expenses for the six months ended June 30, 2026, increased by $0.5 million, or 6%, to $9.3 million when compared to the six months ended June 30, 2025. The increase was primarily driven by Wavelo, followed by Corporate and other costs with increases in contracted labor spend, AI token costs, along with lower labor cost recoveries, reflective of both a smaller workforce and a shift in work towards less capital intensive work.
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GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation and related costs for managerial and administrative personnel, fees for professional services, public listing expenses, rent, foreign exchange and other general corporate expenses.
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| General and administrative | $ | 13,097 | $ | 9,660 | $ | 22,925 | $ | 18,902 | |||||||||||||||
| Increase (decrease) over prior period | $ | 3,437 | $ | 4,023 | |||||||||||||||||||
| Increase (decrease) - percentage | 36 | % | 21 | % | |||||||||||||||||||
| Percentage of net revenues | 13 | % | 10 | % | 12 | % | 10 | % | |||||||||||||||
General and administrative expenses for the three months ended June 30, 2026, increased by $3.4 million or 36%, to $13.1 million as compared to the three months ended June 30, 2025. The increase was primarily driven by increased professional fees across the segments, as well as increased people related costs.
General and administrative expenses for the six months ended June 30, 2026, increased by $4.0 million or 21%, to $22.9 million as compared to the six months ended June 30, 2025. The increase was primarily driven by increased professional fees across the segments, increased people related costs and unrealized loss on foreign exchange.
DEPRECIATION OF PROPERTY AND EQUIPMENT
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Depreciation of property and equipment | $ | 445 | $ | 79 | $ | 906 | $ | 163 | |||||||||||||||
| Increase (decrease) over prior period | $ | 366 | $ | 743 | |||||||||||||||||||
| Increase (decrease) - percentage | 463 | % | 455 | % | |||||||||||||||||||
| Percentage of net revenues | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||||||
Depreciation costs for the three months ended June 30, 2026, increased by $0.4 million, to $0.4 million as compared to the three months ended June 30, 2025. The increase was primarily driven by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses for more relevant presentation. The majority of this increase relates to the Ting segment.
Depreciation costs for the six months ended June 30, 2026, increased by $0.7 million, to $0.9 million as compared to the six months ended June 30, 2025. The increase was primarily driven by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses for more relevant presentation. The majority of this increase relates to the Ting segment.
AMORTIZATION OF INTANGIBLE ASSETS
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Amortization of intangible assets | $ | 333 | $ | 749 | $ | 1,071 | $ | 1,589 | |||||||||||||||
| Increase (decrease) over prior period | $ | (416) | $ | (519) | |||||||||||||||||||
| Increase (decrease) - percentage | (56) | % | (33) | % | |||||||||||||||||||
| Percentage of net revenues | 0 | % | 1 | % | 1 | % | 1 | % | |||||||||||||||
Amortization of intangible assets for the three months ended June 30, 2026, decreased by $0.4 million, or 56%, to $0.3 million as compared to the three months ended June 30, 2025. The decrease was driven by the completed amortization of Ascio brand assets, which was completed in March 2026.
Amortization of intangible assets for the six months ended June 30, 2026, decreased by $0.5 million, or 33%, to $1.1 million as compared to the six months ended June 30, 2025. The decrease was driven by the completed amortization of Ascio brand assets , which was completed in March 2026.
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LOSS (GAIN) ON DISPOSITION OF PROPERTY AND EQUIPMENT
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Gain) loss on disposition of property and equipment | $ | (48) | $ | (1,788) | $ | 828 | $ | (1,788) | |||||||||||||||
| Increase (decrease) over prior period | $ | 1,740 | $ | 2,616 | |||||||||||||||||||
| Increase (decrease) - percentage | (97 | %) | (146 | %) | |||||||||||||||||||
| Percentage of net revenues | 0 | % | (2 | %) | 0 | % | (1 | %) | |||||||||||||||
In the three months ended June 30, 2026, the Company recorded minimal gains on disposition (less than $0.1 million). In the three months ended June 30, 2025, the Company recorded a gain on disposition of property and equipment of $1.7 million, primarily related to the disposition of Ting inventory held for capital projects.
In the six months ended June 30, 2026, the Company recorded a loss on disposition of property and equipment of $0.8 million, primarily related to the disposition of Ting contract assets and inventory held for capital projects. In the six months ended June 30, 2025, the Company recorded a gain on disposition of property and equipment of $1.7 million, primarily related to the disposition of Ting inventory held for capital projects.
OTHER INCOME (EXPENSES)
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Other income (expense), net | $ | (11,885) | $ | (10,493) | $ | (23,293) | $ | (21,427) | |||||||||||||||
| Increase (decrease) over prior period | $ | (1,392) | $ | (1,866) | |||||||||||||||||||
| Increase (decrease) - percentage | 13 | % | 9 | % | |||||||||||||||||||
| Percentage of net revenues | (12 | %) | (11 | %) | (12) | % | (11 | %) | |||||||||||||||
Other income (expenses) during the three months ended June 30, 2026, decreased by $1.4 million when compared to the three months ended June 30, 2025. The decrease in income was primarily driven by higher net interest expense, lower income earned on sale of Transferred Assets to EchoStar, and lower other income. Net interest expense increased by $0.8 million, driven by a $0.8 million increase in interest expense associated with Generate's redeemable preferred units, a $0.2 million increase due to reduced money market fund interest income from falling rates, and a $0.2 million increase due to lower interest expense capitalization associated with Fiber network assets under construction; partially offset by a $0.4 million decrease in interest expense related to the Credit Facility for the Tucows businesses excluding Ting due to the reduction in outstanding principal balance. Income earned on sale of Transferred Assets to EchoStar decreased by $0.6 million from normal churn, as expected. Other income increased by $0.1 million driven by income from Ting subleases.
Other income (expenses) during the six months ended June 30, 2026, decreased by $1.9 million when compared to the six months ended June 30, 2025. The decrease in income was primarily driven by higher net interest expense, lower income earned on sale of Transferred Assets to EchoStar, and lower other income. Net interest expense increased by $1.1 million, driven by a $1.2 million increase in interest expense associated with Generate's redeemable preferred units, a $0.4 million increase due to reduced money market fund interest income from falling rates, and a $0.2 million increase due to lower interest expense capitalization associated with Fiber network assets under construction; partially offset by a $0.8 million decrease in interest expense related to the Credit Facility for the Tucows businesses excluding Ting due to the reduction in outstanding principal balance. Income earned on sale of Transferred Assets to EchoStar decreased by $0.9 million from normal churn, as expected. Other income increased by $0.1 million driven by income from Ting subleases.
INCOME TAXES
| (Dollar amounts in thousands of U.S. dollars) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Provision for income taxes | $ | 3,130 | $ | 2,265 | $ | 5,522 | $ | 4,431 | |||||||||||||||
| Increase (decrease) over prior year | $ | 865 | $ | 1,091 | |||||||||||||||||||
| Effective tax rate | (18) | % | (17) | % | (17) | % | (17) | % | |||||||||||||||
Income tax expense for the three and six months ended June 30, 2026, increased by $0.9 million and $1.1 million, respectively, when compared to the three and six months ended June 30, 2025. The change in effective tax rate is primarily due to the impact of foreign earnings and tax return adjustments.
We regularly evaluate our deferred tax assets, including net operating losses, to determine whether a valuation allowance is necessary based on our expectations of future taxable income. The increase in our valuation allowance on net operating losses reflects our assessment of the likelihood of realizing future tax benefits associated with these losses.
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ADJUSTED EBITDA
We believe that the provision of this non-GAAP measure allows investors to evaluate the operational and financial performance of our core business using similar evaluation measures to those used by management. We use Adjusted EBITDA to measure our performance and prepare our budgets. Since Adjusted EBITDA is a non-GAAP financial performance measure, our 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 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. For liquidity measures, see the Condensed Consolidated Statements of Cash Flows included in Part I of this Quarterly Report. 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. We endeavor 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 GAAP, 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.
Our Adjusted EBITDA definition excludes provision for income tax, depreciation, amortization of intangible assets, asset impairment, interest expense (net), loss on debt extinguishment, accretion of contingent liabilities, stock-based compensation, gains and losses from unrealized foreign currency transactions and costs that are one-time in nature and 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 foreign currency contracts not designated in accounting hedges, 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:
| Reconciliation of Net income (loss) before Provision for Income Taxes to Adjusted EBITDA | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| (In Thousands of U.S. Dollars) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Income (Loss) for the period | $ | (20,471) | $ | (15,637) | $ | (38,578) | $ | (30,770) | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Provision for income taxes | 3,130 | 2,265 | 5,522 | 4,431 | |||||||||||||||||||
| Depreciation of property and equipment | 10,341 | 10,539 | 20,212 | 20,999 | |||||||||||||||||||
| Impairment and loss (gain) on disposition of property and equipment | 286 | (1,353) | 1,442 | (1,149) | |||||||||||||||||||
| Amortization of intangible assets | 698 | 1,115 | 1,801 | 2,321 | |||||||||||||||||||
| Interest expense, net | 14,450 | 13,621 | 28,315 | 27,234 | |||||||||||||||||||
| Stock-based compensation | 1,164 | 1,386 | 2,258 | 2,891 | |||||||||||||||||||
| Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities | 29 | (72) | 223 | (437) | |||||||||||||||||||
Acquisition, transaction and transition costs (1) | 2,670 | 713 | 2,769 | 728 | |||||||||||||||||||
| Adjusted EBITDA | $ | 12,297 | $ | 12,577 | $ | 23,964 | $ | 26,248 | |||||||||||||||
1Acquisition and other costs represent transaction-related expenses, transitional expenses, such as redundant post-acquisition expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.
Adjusted EBITDA decreased by $0.3 million, or 2%, to $12.3 million for the three months ended June 30, 2026, when compared to the three months ended June 30, 2025. The decrease in Adjusted EBITDA was primarily driven by decreases across Wavelo, Corporate and all other - Mobile Services and eliminations, and Tucows Domains. Wavelo's contribution decreased by $2.5 million, driven by less bundled professional services revenues and higher operating costs in service of growth and go-to market activities. The decrease in Corporate and all other - Mobile Services and eliminations contribution of $2.3 million was primarily driven by increased corporate operating expenses, including legal and professional fees and severance costs, as well as write-off of bad debt related to the unauthorized long distance changes in Mobile and the decrease in income earned on sale of Transferred Assets to EchoStar, as expected. Tucows Domains contribution decreased by $0.6 million primarily driven by legal and professional fees incurred in the current period. These decreases in Adjusted EBITDA were partially offset by an increase in Ting contribution of $5.2 million, primarily driven by new construction revenue and continued subscriber growth across the markets we serve.
Adjusted EBITDA decreased by $2.3 million, or 9%, to $24.0 million for the six months ended June 30, 2026, when compared to the six months ended June 30, 2025. The decrease in Adjusted EBITDA was primarily driven by decreases across Corporate and all other - Mobile Services and eliminations, Wavelo, and Tucows Domains. The decrease in Corporate and all other - Mobile Services and eliminations contribution of $4.1 million was primarily driven by increased corporate operating expenses, including legal and professional fees, severance costs, and AI costs, as well as write-off of bad debt related to the authorized long distance charges in Mobile and the decrease in income earned on sale of Transferred Assets to EchoStar, as expected. Wavelo's contribution decreased by $3.4 million, driven by less bundled professional services revenues and higher operating costs in service of growth and go-to market activities. Tucows Domains contribution decreased by $0.5 million primarily driven by legal and professional fees incurred in the current period. These decreases in Adjusted EBITDA were partially offset by an increase in Ting contribution of $5.6 million, primarily driven by new construction revenue and continued subscriber growth across the markets we serve.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2026, our cash and cash equivalents balance decreased by $2.6 million, our funds held by trustee balance decreased by $0.3 million, and our secured notes reserve funds balance decreased by $1.2 million when compared to December 31, 2025. The decrease in our cash balance was driven primarily by $10.6 million for additions to property and equipment and $0.9 million related to the acquisition of intangible assets. These decreases were offset by $5.4 million from cash provided by operating activities, $1.9 million proceeds on disposal of property and equipment by Ting, and $0.1 million contingent consideration for acquisitions.
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Ting Securitized Financing Facility
On August 20, 2024, the Company through its wholly owned subsidiaries, including Ting, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitized transaction. On the closing date, Ting issued (i) $55,000,000 of its 5.63% Secured Fiber Revenue Notes, Series 2024-1, Class A-2 (the "2024 Class A-2 Notes"), (ii) $8,000,000 of its 6.85% Secured Fiber Revenue Notes, Series 2024-1, Class B (the "2024 Class B Notes") and (iii) $16,000,000 initial principal amount of 9.15% Secured Fiber Revenue Notes, Series 2024-1, Class C (the "2024 Class C Notes" and together with the 2024 Class A-2 Notes and the 2024 Class B Notes, the "2024 Term Notes").
The offering was exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). Subject to certain limitations, the 2024 Notes are secured by certain of the Company's revenue-generating assets, consisting principally of the Securitized Assets, that are owned by certain other limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company (collectively, the "Securitization Entities") that act as guarantors under the Base Indenture.
The 2024 Term Notes were issued under the Base indenture, dated as of May 4, 2023 (as supplemented by the Base Indentures Supplement No. 1, dated as of November 10, 2023), by and between the Issuer, the asset parties party thereto and Citibank, N.A., as trustee (in such capacity, the "Indenture Trustee") and securities intermediary and a series supplement to the Base Indenture dated as of the Closing Date (the "Series 2024-1 Supplement"), by and among the Issuer, the asset parties party thereto and the Indenture Trustee. The Base Indenture and the Series 2024-1 Supplement will allow the Issuer to issue additional series of notes in the future, subject to certain conditions set forth therein.
Interest payments on the 2024 Term Notes are payable on a monthly basis. The legal final maturity date of the 2024 Term Notes is in August of 2054, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2024 Term Notes will be in August 2029. If the Issuer has not repaid or refinanced the 2024 Term Notes prior to the anticipated repayment date, additional interest will accrue on the 2024 Term Notes in an amount equal to the greater of (A) 5.00% per annum and (B) a per annum interest rate equal to the excess, if any, by which the sum of the following exceeds the original interest rate of such 2024 Term Note (i) the yield to maturity (adjusted to a "mortgage equivalent basis" pursuant to the standards and practices of the Securities Industry and Financial Markets Association) on such anticipated repayment date of the United States Treasury Security having a term closest to 10 years, plus (ii) 5.00%, plus (iii) (x) for the 2024 Class A-2 Notes, 2.00%, (y) for the 2024 Class B Notes, 3.25% and (z) for the 2024 Class C Notes, 7.00%. Please see the discussion in the Material Cash Requirements section below.
2023 Credit Facility
On September 22, 2023, the Borrowers and certain other subsidiaries of the Company, as guarantors, entered into the 2023 Credit Agreement (the “2023 Credit Agreement”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto, to, among other things, provide the Borrowers with a revolving credit facility in an aggregate amount not to exceed $240 million (the “2023 Credit Facility”). The Borrowers may request an increase to the 2023 Credit Facility through new commitments of up to $60M if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the 2023 Credit Agreement) is less than 3.75:1.00.
On September 8, 2025, the Borrowers entered into a one-year Extension Agreement (the “Extension Agreement”). The Extension Agreement extends the term of the 2023 Credit Agreement through September 22, 2027. The material terms of the 2023 Credit Agreement remain unchanged; however, the Extension Agreement amends certain definitions relating to the treatment of specified expenses in the calculation of Adjusted EBITDA for purposes of the Total Funded Debt to Adjusted EBITDA Ratio financial covenant. In connection with the Extension Agreement, the Company incurred $0.4 million of fees paid to the Lenders. These fees have been reflected as reduction to the carrying amount of the loan payable and will be amortized over the extended term from September 2026 to September 2027.
The 2023 Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The 2023 Credit Agreement requires that the Company comply with certain customary non-financial covenants and restrictions. In addition, the Company has agreed to comply with the following financial covenants: (1) a leverage ratio by maintaining at all times a Total Funded Debt to Adjusted EBITDA Ratio of not more than (i) 3.75:1.00; and (2) an interest coverage ratio by maintaining as of the end of each rolling four financial quarter period, an Interest Coverage Ratio (as defined in the Extension Agreement) of not less than 3.00:1.00. As of June 30, 2026, the Company's leverage ratio was 3.72:1.00 and Interest Coverage Ratio was 3.75:1.00.
During the six months ended June 30, 2026, the Company did not make any repayments towards the 2023 Credit Facility. The Company ended June 30, 2026 with a remaining principal balance of $190.4 million, for which the required repayment was due in 2027.
Subsequent to June 30, 2026, on July 27, 2026, the Company entered into a Third Amendment to the 2023 Credit Agreement, which (i) extended the maturity date of the facility from September 22, 2027 to July 27, 2029 (with the exception of one syndicate member holding a $27.5 million commitment, which the Company has commenced discussions to replace with an existing or new syndicate member), and (ii) amended the negative covenants to permit the Company to invest in the Ting business, subject to specified conditions and the existing financial covenants. Key financial covenants remained substantially the same, including a maximum Total Funded Debt to Adjusted EBITDA ratio of 3.75x and a minimum interest coverage ratio of 3.0x. Please see "Note 22. Subsequent Events" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report for further information.
As of June 30, 2026, the Company held contracts in the amount of $24.0 million with BMO to trade U.S. dollars in exchange for Canadian dollars under an uncommitted treasury risk management facility which assists the Company with hedging Canadian dollar exposures. Please see the discussion in the Material Cash
Requirements section below.
Cash Flow from Operating Activities
Net cash inflows from operating activities during the six months ended June 30, 2026 totaled $5.5 million, compared to a net cash outflow of $4.7 million
in the six months ended June 30, 2025.
in the six months ended June 30, 2025.
Net loss during the six months ended June 30, 2026 was $38.6 million, and included non-cash charges and recoveries of $38.9 million such as depreciation, impairment of property and equipment, accretion of redeemable preferred shares, loss (gain) on disposal of assets, stock-based compensation, amortization of debt discount and issuance costs, amortization of intangible assets, and deferred income taxes (recovery). This was offset by changes in our working capital, which resulted in a net cash inflow of $5.1 million from positive contributions of $7.9 million driven by prepaid expenses and deposits, accrued liabilities, accounts receivable, customer deposits, accreditation fees payable, and contract asset. This was partially offset by cash utilization of $2.8 million driven by deferred costs of fulfillment, income taxes recoverable, accounts payable, and inventory.
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Cash Flow from Financing Activities
Net cash inflows from financing activities during the six months ended June 30, 2026 was less than $0.1 million, compared to a net cash outflow of $2.5 million in the six months ended June 30, 2025. The $0.1 million related to contingent consideration for acquisitions.
Cash Flow from Investing Activities
Net cash outflows from investing activities during the six months ended June 30, 2026 totaled $9.5 million, compared to a net cash inflow of $2.5 million in the six months ended June 30, 2025. Cash outflows totaled $11.4 million, with $10.6 million primarily related to investment in property and equipment to support the continued expansion of select Ting Internet Fiber network footprints, and $0.9 million related to acquisition of intangible assets in Tucows Domains. These cash outflows were partially offset by $1.9 million cash inflow related to proceeds on disposal of Ting property and equipment.
Material Cash Requirements
As of June 30, 2026, the Company's Cash and cash equivalents, restricted cash and secured notes reserve funds balances totaled $60.2 million, of which $28.6 million belonged to Ting Internet and $31.6 million belonged to the other Tucows' segments.
In our 2025 Annual Report, we disclosed our material cash requirements of both the Ting segment as well as the other segments excluding Ting. As of June 30, 2026, other than the items mentioned below, there have been no other material changes to our material cash requirements outside the ordinary course of business.
Ting
As of June 30, 2026, the balance owing on the Unit Purchase Agreement was $147.4 million ("Note 19. Redeemable preferred units" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this report). On May 4, 2023, Tucows, through its indirect and wholly owned subsidiaries, including Ting Fiber, LLC entered into a definitive agreement relating to a securitized financing facility where Ting Issuer LLC, a Delaware limited liability company, issued the 2023 Term Notes for a total value of $238.5 million and 2024 Term Notes for a total value of $63.0 million ("Note 8. Notes Payable" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this report).
On December 1, 2025, Ting received written notice from Generate asserting that a Return Breach and a Trigger Event had occurred as a result of Ting's failure to pay quarterly preferred return for two consecutive quarters and Generate reserved its rights to pursue certain remedies as described in "Note 19. Redeemable preferred units" to the Consolidated Financial Statements. As of June 30, 2026, Ting had not paid the preferred return due under the Unit Purchase Agreement to Generate for five consecutive quarters amounting to $25.1 million in the aggregate. The unpaid interest for these quarters has been treated as payment-in-kind ("PIK") and added to the outstanding balance of the redeemable preferred units. Please see "Note 19. Redeemable Preferred Units" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report for further information.
Ting incurred a net loss of $19.6 million and $21.5 million for the three months ended June 30, 2026 and June 30, 2025, respectively. As of June 30, 2026, Ting had $12.6 million in unrestricted cash and cash equivalents, $2.9 million in accounts receivable, $2.1 million in accounts payable, and $7.7 million in accrued liabilities. Comparatively, as of December 31, 2025, Ting had $23.8 million in unrestricted cash and cash equivalents, $3.6 million in accounts receivable, $1.2 million in accounts payable, and $8.7 million in accrued liabilities. At June 30, 2026, Ting's current liabilities included $147.4 million on the redeemable preferred units, which were reclassified from long-term to current liabilities as of December 31, 2025. At June 30, 2026, Ting’s long-term liabilities included $293.6 million payable on the 2023 and 2024 Term Notes. Ting incurred an operating cash flow deficit of $4.3 million and $1.1 million for the three months ended June 30, 2026 and June 30, 2025, respectively. Ting has scheduled interest payments of $20.1 million in the twelve months following June 30, 2026.
On July 27, 2026, in connection with the Generate Exit Transactions, the Company entered into a Third Amendment to the 2023 Credit Agreement, which (i) extended the maturity date of the facility from September 22, 2027 to July 27, 2029 (with the exception of one syndicate member holding a $27.5 million commitment, which the Company has commenced discussions to replace with an existing or new syndicate member), and (ii) amended the negative covenants to permit the Company to invest in the Ting business, subject to specified conditions and the existing financial covenants. Key financial covenants remained substantially the same, including a maximum Total Funded Debt to Adjusted EBITDA ratio of 3.75x and a minimum interest coverage ratio of 3.0x. Please see "Note 22. Subsequent Events" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report for further information.
Tucows Businesses Excluding Ting
Tucows businesses excluding Ting, acquisitions and capital investments have been funded by the Company's operating income and the Company's existing 2023 Credit Agreement. As of June 30, 2026, the Company’s 2023 Credit Facility had an outstanding balance of $190.4 million. Tucows businesses excluding Ting make principal repayments from time to time.
For Fiscal 2026, the Company plans to fund the cash requirements of Tucows businesses excluding Ting solely through operating income, while making discretionary loan repayments to create greater operating flexibility and access to additional financing.
In the long-term, Tucows businesses excluding Ting may seek additional financing to accelerate the growth of our business, repurchase shares or fund future acquisitions. The Company's 2023 Credit Facility, which was most recently amended to (i) extended the maturity date of the facility from September 22, 2027 to July 27, 2029 (with the exception of one syndicate member holding a $27.5 million commitment, which the Company has commenced discussions to replace with an existing or new syndicate member), and (ii) amended the negative covenants to permit the Company to invest in the Ting business, subject to specified conditions and the existing financial covenants, provides committed liquidity to the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We develop products in Canada and sell these services in North America and Europe. Our sales are primarily made in U.S. dollars, while a major portion of expenses are incurred in Canadian dollars. Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. Our interest income is sensitive to changes in the general level of Canadian and U.S. interest rates, particularly since the majority of our investments are in short-term instruments. Based on the nature of our short-term investments, we have concluded that there is no material interest rate risk exposure as of June 30, 2026.
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We are also subject to market risk exposure related to changes in interest rates under our 2023 Credit Agreement. Changes in interest rates will impact our borrowing cost. However, fluctuations in interest rates are beyond our control. We will continue to monitor and assess the risks associated with interest expense exposure and may act in the future to mitigate these risks.
Although our functional currency is the U.S. dollar, a substantial portion of our fixed expenses are incurred in Canadian dollars. Our policy with respect to foreign currency exposure is to manage financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some of the impact of foreign currency exchange movements. Exchange rates are, however, subject to significant and rapid fluctuations, and therefore we cannot predict the prospective impact of exchange rate fluctuations on our business, results of operations and financial condition. Accordingly, we have entered into foreign exchange forward contracts to mitigate the exchange rate risk on portions of our Canadian dollar exposure.
As of June 30, 2026, we had the following outstanding foreign exchange forward contracts to trade U.S. dollars in exchange for Canada dollars:
| Maturity date (Dollar amounts in thousands of U.S. dollars) | Notional amount of U.S. dollars | Weighted average exchange rate of U.S. dollars | Fair value Asset (Liability) | |||||||||||||||||
| July - September 2026 | 14,607 | 1.4021 | (129) | |||||||||||||||||
| October - December 2026 | 9,372 | 1.4021 | (42) | |||||||||||||||||
| $ | 23,979 | 1.4021 | $ | (171) | ||||||||||||||||
As of June 30, 2026, the Company had $24.0 million of outstanding foreign exchange forward contracts which will convert to CDN $33.6 million. Of these contracts, $24.0 million met the requirements for hedge accounting.
As of December 31, 2025, the Company had $27.2 million of outstanding foreign exchange forward contracts which would convert to CDN $37.0 million. Of these contracts, $27.2 million met the requirements for hedge accounting.
We have performed a sensitivity analysis model for foreign exchange exposure over the six months ended June 30, 2026. The analysis used a modeling technique that compares the U.S. dollar equivalent of all expenses incurred in Canadian dollars, at the actual exchange rate, to a hypothetical 10% adverse movement in the foreign currency exchange rates against the U.S. dollar, with all other variables held constant. Foreign currency exchange rates used were based on the market rates in effect during the six months ended June 30, 2026. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a decrease in net income for the six months ended June 30, 2026 of approximately $2.8 million, before the effects of hedging. We will continue to monitor and assess the risk associated with these exposures and may take additional actions in the future to hedge or mitigate these risks.
Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, foreign exchange contracts, commercial papers and accounts receivable. Our cash, cash equivalents and short-term investments are in high-quality securities placed with major banks and financial institutions whom we have evaluated as highly creditworthy. Similarly, we enter into our foreign exchange contracts with major banks and financial institutions. With respect to accounts receivable, we perform ongoing evaluations of our customers, generally granting uncollateralized credit terms to our customers, and maintaining an allowance for doubtful accounts based on historical experience and our expectation of future losses.
Interest rate risk
Our exposure to interest rate fluctuations relate primarily to our 2023 Credit Agreement.
As of June 30, 2026, we had an outstanding balance of $190.4 million on the 2023 Credit Facility. The 2023 Credit Agreement added SOFR Loans as a form of advance available under the 2023 Credit Facility to replace LIBOR Rate Advances, and such SOFR Loans may bear interest based on Adjusted Daily Simple SOFR (defined to be the applicable SOFR rate published by the Federal Reserve Bank of New York plus 0.10% per annum subject to a floor of zero) or Adjusted Term SOFR (defined to be the applicable SOFR rate published by CME Group Benchmark Administration Limited plus 0.10% for one-month, 0.15% for three-months, and 0.25% for six-months per annum). As of June 30, 2026, an adverse change of one percent on the interest rate would have the effect of increasing our annual interest payment on 2023 Credit Agreement by approximately $1.9 million, assuming that the loan balance as of June 30, 2026 is outstanding for the entire period..
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures as required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on the evaluation as of June 30, 2026 management has concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
(b)Changes in Internal Control over Financial Reporting
During the six months ended June 30, 2026, there have not been any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
We are involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, individually or in the aggregate, we believe will materially harm our business. We cannot assure that we will prevail in any litigation. Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of our attention.
In addition, pursuant to Item 103(c)(3)(iii) of Regulation S-K under the Exchange Act, the Company is required to disclose certain information about environmental proceedings to which governmental authority is a party if the Company reasonably believes such proceedings may result in monetary sanctions, exclusive of interest and costs, above a stated threshold. The Company has elected to apply a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.
Item 1A. Risk Factors
Certain factors may have a material adverse effect on our business, financial condition and results of operations. You should carefully consider the risks and uncertainties referenced below, together with all of the other information in this Quarterly Report on Form 10-Q, including our Condensed Consolidated Financial Statements and related notes. Any of those risks could materially and adversely affect our business, operating results, financial condition, or prospects and cause the value of our common stock to decline, which could cause you to lose all or part of your investment.
There have been no material changes to the Risk Factors described under "Part I - Item 1A. Risk Factors" in our Annual Report on Form 10-K for Fiscal 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On February 12, 2026, the Company announced that its Board of Directors (“Board”) approved a stock buyback program to repurchase up to $40 million of its common stock in the open market (the “2026 Buyback Program”). The 2026 Buyback Program commenced on February 13, 2026 and is expected to terminate on February 12, 2027. For the three and six months ended June 30, 2026, the Company did not repurchase any shares under the 2025 and 2026 Buyback Program.
Item 3. Defaults Upon Senior Securities
As of June 30, 2026, Ting had not paid the preferred return due to Generate for five consecutive quarters amounting to $25.1 million in the aggregate. Ting received a notice from Generate on December 1, 2025 stating that Ting is in a Return Breach and a Trigger Event under the LLC Agreement, and Generate has the right to pursue certain remedies as described in "Note 19. Redeemable Preferred Units" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report.
On July 27, 2026, the Company, Ting and certain of its affiliated entities, the “Ting Entities,” entered into a series of related, definitive agreements (collectively, the "Generate Exit Transaction") with Generate TF Holdings, LLC (“Generate”) and certain of its affiliated entities the (“Generate Entities”). See “ Notes to Condensed Consolidated Financial Statements (unaudited) - Note 22. Subsequent Events.” The Generate Exit Transaction resolved the conditions disclosed with respect to Ting, including the accrued and unpaid preferred return and the Return Breach and corresponding Trigger Event asserted by Generate and described in the Company's Current Report on Form 8-K filed on December 5, 2025 and the items discussed above in “Note 19. Redeemable Preferred Units.” As a result of the Generate Exit Transaction, Generate ceased to be a preferred member of Ting, waived and released all rights, powers and preferences associated with the Series A Preferred Units (including all redemption, mandatory-redemption, conversion and call rights), and withdrew all outstanding notices, including the notice asserting a Return Breach and Trigger Event. The parties also exchanged mutual releases.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)None.
(b)None.
(c)During the three months and six months ended June 30, 2026, none
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Item 6. Exhibits
| No. | Description | |||||||
| 3.1.1 | Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on November 29, 2007). | |||||||
| 3.1.2 | Articles of Amendment to Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on January 3, 2014). | |||||||
| 3.2.1 | Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.2 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 29, 2007). | |||||||
| 3.2.2 | Amendment No. 1 to Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by Reference to Exhibit 3.3 filed with Tucows’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, as filed with the SEC on August 14, 2012) | |||||||
| 31.1# | Chief Executive Officer's Rule 13a-14(a)/15d-14(a) Certification | |||||||
| 31.2# | Chief Financial Officer's Rule 13a-14(a)/15d-14(a) Certification | |||||||
32.1† | Chief Executive Officer's Section 1350 Certification † | |||||||
32.2† | Chief Financial Officer's Section 1350 Certification † | |||||||
| 101.INS# | Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
| 101.SCH# | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL# | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF# | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB# | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE# | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104# | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
#Filed herewith.
†Furnished herewith.
*Certain schedules and similar attachments have been omitted in reliance on Item 601 (a)(5) of Regulation S-K. The Company will provide, on supplemental basis, a copy of any omitted schedule or attachment to the Securities and Exchange Commission or its staff upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August 6, 2026 | TUCOWS INC. | |||||||
| By: | /s/ DAVID WOROCH | |||||||
| David Woroch | ||||||||
| President and Chief Executive Officer | ||||||||
| By: | /s/ IVAN IVANOV | |||||||
| Ivan Ivanov Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
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