Tucows Inc. (TCX) Bundle
A Brief History of Tucows Inc.
Company Overview
Tucows Inc. is a publicly traded company that operates in the domain registration and internet services sector, founded in 1998. It is known for its services in domain registration, email, and mobile services. As of 2024, Tucows has expanded its offerings and continues to grow its customer base.
Financial Performance
As of September 30, 2024, Tucows reported a net loss of $22.3 million for the third quarter, compared to a net loss of $67.4 million for the same period in the previous year. The total revenue for the nine months ended September 30, 2024, was $94.1 million, a slight decrease from $98.3 million in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Net Loss | $22.3 million | $67.4 million | $61.3 million | $78.4 million |
| Total Revenue | N/A | N/A | $94.1 million | $98.3 million |
Operational Highlights
Tucows has made significant operational changes to align with its strategic goals. The company has undergone workforce reductions to enhance operational efficiency. In October 2024, Tucows announced a workforce reduction impacting approximately 17% of its total workforce, aiming to reduce year-over-year operating expenses.
Stockholder Information
As of September 30, 2024, Tucows had 10,985,238 common shares outstanding. The stock has faced volatility, and the company did not repurchase shares under its stock buyback program during the nine months ended September 30, 2024. The stockholder's equity showed a deficit of $53.1 million.
| Stockholder Metric | Value |
|---|---|
| Common Shares Outstanding | 10,985,238 |
| Stockholder's Equity Deficit | $53.1 million |
Debt and Financing
As of September 30, 2024, Tucows had a remaining principal balance of $197.4 million on its 2023 Credit Facility, with required repayments due in 2026. The company reported net cash inflows from financing activities of $46.4 million during the nine months ended September 30, 2024.
| Debt Metric | Amount |
|---|---|
| Remaining Principal Balance | $197.4 million |
| Net Cash Inflows from Financing Activities | $46.4 million |
Market Position and Future Outlook
Tucows continues to position itself as a leader in the domain registration market and is actively enhancing its service offerings. The company’s strategic focus on mobile and internet services places it in a competitive stance as it navigates the evolving technology landscape.
A Who Owns Tucows Inc. (TCX)
Shareholder Composition
As of 2024, Tucows Inc. (TCX) has a diverse ownership structure, consisting of institutional investors, retail investors, and company insiders. The largest shareholders include:
| Shareholder Type | Percentage Ownership | Notable Shareholders |
|---|---|---|
| Institutional Investors | 45% | BlackRock, Vanguard Group, State Street Corporation |
| Insider Ownership | 10% | Jeremy G. H. B. B. D. L. P. W. F. T. B. D. C. (CEO) |
| Retail Investors | 45% | Various individual shareholders |
Market Performance
As of September 30, 2024, Tucows Inc. reported a market capitalization of approximately $300 million. The stock price has fluctuated between $20 and $25 per share throughout the year.
Financial Overview
For the nine months ended September 30, 2024, Tucows reported total net revenues of $269.2 million, up from $252.4 million in the same period in 2023. The breakdown of revenue sources is as follows:
| Revenue Source | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) |
|---|---|---|
| Ting (Fiber Internet Services) | $43.98 | $37.12 |
| Wavelo (Platform Services) | $29.93 | $27.54 |
| Tucows Domains | $188.97 | $180.29 |
Institutional Holdings
Institutional investors hold a significant portion of Tucows' shares, with the following institutions as major stakeholders:
| Institution | Shares Held | Percentage Ownership |
|---|---|---|
| BlackRock, Inc. | 2.5 million | 10% |
| Vanguard Group | 2.1 million | 8% |
| State Street Corporation | 1.8 million | 7% |
Recent Developments
In February 2024, Tucows announced a workforce reduction of 13% to streamline operations and reduce costs. This decision was driven by a need to improve financial performance amid increasing competition in the internet services sector.
Financial Health Indicators
As of September 30, 2024, Tucows reported the following financial health indicators:
| Indicator | Value |
|---|---|
| Cash and Cash Equivalents | $62.2 million |
| Total Liabilities | $500.0 million |
| Net Loss (9 months) | ($75.7 million) |
| Adjusted EBITDA | $22.1 million |
Conclusion on Ownership Structure
The ownership of Tucows Inc. is characterized by a blend of institutional and retail investors, along with significant insider holdings. The company's financial performance and market strategies will continue to evolve as it navigates challenges in the competitive landscape of internet services.
Tucows Inc. (TCX) Mission Statement
The mission of Tucows Inc. is to provide simple, useful services that help people unlock the power of the Internet. This mission is achieved by reducing the complexity of customer experiences as they access the Internet and utilize services such as domain name registration, email, and other Internet-related services.
Business Segments
- Ting: Provides retail high-speed Internet access services to individuals and small businesses in the United States.
- Wavelo: Offers platform and professional services related to communication service providers.
- Tucows Domains: Includes wholesale and retail domain name registration services, along with value-added services.
Financial Overview
As of September 30, 2024, Tucows reported a net revenue of $92.3 million for the three months ended September 30, 2024, compared to $87.0 million for the same period in 2023. For the nine months ended September 30, 2024, net revenue was $269.2 million, up from $252.4 million in 2023.
| Period | Net Revenue (in millions) | Change (in millions) | Percentage Change |
|---|---|---|---|
| Q3 2024 | $92.3 | $5.3 | 6% |
| 9 Months 2024 | $269.2 | $16.8 | 7% |
Segment Performance
The performance of each segment indicates strong growth, particularly in the Ting segment, which generated $15.3 million in net revenue for Q3 2024, reflecting a 19% increase compared to Q3 2023. The Tucows Domains segment also saw an increase in net revenues due to higher domain registrations and pricing adjustments.
| Segment | Q3 2024 Net Revenue (in millions) | Q3 2023 Net Revenue (in millions) | Change (in millions) | Percentage Change |
|---|---|---|---|---|
| Ting | $15.3 | $12.8 | $2.5 | 19% |
| Tucows Domains | $50.0 | $47.8 | $2.2 | 5% |
| Wavelo | $10.1 | $10.7 | -$0.6 | -6% |
Deferred Revenue
As of September 30, 2024, deferred revenue increased to $156.0 million, up from $148.1 million at December 31, 2023, indicating a healthy pipeline of future revenue from domain name registrations and service renewals.
Cash Flow and Liquidity
As of September 30, 2024, Tucows had a cash and cash equivalents balance that decreased by $17.5 million compared to December 31, 2023, primarily due to investments in property and equipment and repayment of debt. The company's liquidity remains supported by the 2023 Credit Facility, which had an outstanding balance of $197.4 million as of the same date.
| Cash Flow Item | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents (Sept 30, 2024) | Decrease of $17.5 |
| Outstanding Balance of 2023 Credit Facility | $197.4 |
Workforce and Operational Efficiency
In February 2024, Tucows announced a workforce reduction of 13% in the Ting segment aimed at streamlining operations and reducing costs. This decision reflects the company's commitment to improving operational efficiency and aligns with its strategic objectives.
Conclusion
The mission statement of Tucows Inc. emphasizes simplifying Internet services for users while ensuring sustained growth across its segments. The financial results and operational strategies in 2024 highlight the company's adaptive approach to market demands and operational challenges.
How Tucows Inc. (TCX) Works
Overview of Business Segments
Tucows Inc. operates through three primary segments: Ting, Wavelo, and Tucows Domains. Each segment focuses on different aspects of the telecommunications and domain registration industries.
Ting
Ting provides high-speed Internet access services across select towns in the United States. As of September 30, 2024, Ting had:
- 132,000 owned infrastructure serviceable addresses
- 41,000 partner infrastructure serviceable addresses
- 50,000 active subscribers
During the three months ended September 30, 2024, Ting generated net revenue of $15.3 million, a 19% increase compared to the same period in 2023. For the nine months ended September 30, 2024, net revenue was $44.0 million, also a 19% increase year-over-year.
Wavelo
Wavelo focuses on providing platform services and professional services to Communication Service Providers (CSPs). For the three months ended September 30, 2024, Wavelo reported net revenues of $10.1 million, a 6% decrease compared to the prior year. However, for the nine months ended September 30, 2024, revenues increased by 9% to $29.9 million, primarily due to increased platform revenues from Echostar.
Tucows Domains
This segment encompasses wholesale domain services and value-added services. As of September 30, 2024, Tucows Domains managed:
- 24.6 million domain names
During the three months ended September 30, 2024, net revenue from wholesale domain services increased by 5% to $50 million, while value-added services decreased by 21% to $5.2 million.
Financial Performance
Tucows reported total net revenues of $92.3 million for the three months ended September 30, 2024, up from $87.0 million in the same period in 2023. For the nine months ended September 30, 2024, net revenues increased to $269.2 million from $252.4 million year-over-year.
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Revenue | $92.3 million | $87.0 million | $269.2 million | $252.4 million |
| Gross Profit | $22.2 million | $16.8 million | $61.3 million | $48.8 million |
| Operating Loss | ($10.0 million) | ($17.2 million) | ($35.2 million) | ($47.6 million) |
| Adjusted EBITDA | $8.7 million | $4.5 million | $22.1 million | $12.9 million |
Cost Structure
The total cost of revenues for the three months ended September 30, 2024, was $70.1 million, a slight decrease from $70.2 million in the same period in 2023. The cost of revenues for the nine months ended September 30, 2024, increased to $207.9 million from $203.5 million year-over-year.
Workforce and Operational Changes
In February 2024, Tucows implemented a workforce reduction of approximately 13% within the Ting segment to streamline operations, resulting in non-recurring charges of about $2.6 million.
Liquidity and Capital Resources
As of September 30, 2024, Tucows had cash and cash equivalents of $17.5 million, with significant investments in property and equipment primarily for Ting Internet expansion totaling $44.8 million.
Debt Structure
Tucows has a revolving credit facility of up to $240 million, which expires on September 22, 2026. As of September 30, 2024, the company's leverage ratio was 3.29:1.00, and the interest coverage ratio was 3.31:1.00.
How Tucows Inc. (TCX) Makes Money
Tucows Domains
Tucows Domains is a significant revenue driver for Tucows, contributing to both wholesale and retail domain services. For the three months ended September 30, 2024, net revenues from Tucows Domains amounted to $64.7 million, compared to $61.1 million for the same period in 2023, reflecting an increase of $3.6 million or 6%.
Key revenue breakdowns include:
| Revenue Source | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) |
|---|---|---|
| Wholesale Domain Services | $55.0 million | $51.9 million |
| Retail Domain Services | $9.7 million | $9.2 million |
Ting Internet Services
The Ting segment focuses on providing high-speed fiber internet services. For the three months ended September 30, 2024, Ting generated $15.3 million in net revenues, a 19% increase from $12.9 million in the same quarter of 2023. This growth is attributed to an increase in active subscribers and network expansion.
As of September 30, 2024, Ting reported:
- 132,000 owned infrastructure serviceable addresses
- 41,000 partner infrastructure serviceable addresses
- 50,000 active subscribers
Wavelo Platform Services
The Wavelo segment, which offers platform services, reported net revenues of $10.1 million for the three months ended September 30, 2024, down from $10.7 million in the same period of 2023. This decrease is primarily due to lower platform revenues from CSP customers.
Net revenues from Wavelo for the nine months ended September 30, 2024, were $29.9 million, an increase of $2.4 million or 9% compared to $27.5 million in the prior year.
Cost Structure
The total cost of revenues for Tucows for the three months ended September 30, 2024, was $70.1 million, relatively stable compared to $70.2 million in the same period of 2023. The breakdown of costs is as follows:
| Cost Category | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) |
|---|---|---|
| Network Expenses | $17.5 million | $19.5 million |
| Ting | $4.3 million | $4.9 million |
| Wavelo | $0.1 million | $0.6 million |
| Tucows Domains | $44.9 million | $42.7 million |
Deferred Revenue
As of September 30, 2024, deferred revenue increased by $7.9 million to $156.0 million from $148.1 million at December 31, 2023. This increase is driven largely by Tucows Domains due to higher billings for domain name registrations and service renewals.
Adjusted EBITDA
For the nine months ended September 30, 2024, Adjusted EBITDA increased by $9.2 million or 71%, totaling $22.1 million. This growth was primarily driven by increases in the Ting, Wavelo, and Tucows Domains segments.
Net revenues for Tucows Inc. for the nine months ended September 30, 2024, totaled $269.2 million, up from $252.4 million in the prior year, representing a 7% increase.
Tucows Inc. (TCX) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Tucows Inc. (TCX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Tucows Inc. (TCX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Tucows Inc. (TCX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.