Q4 2023 Tucows Inc Earnings Call - Pre-Recorded Q&A

In my commentary, we have prerecorded prepared remarks regarding the quarter and outlook for the company of.

<unk> generated transcript of these remarks with relevant link is also available on the company's website.

In lieu of a live question and answer period. Following these remarks shareholders analysts and perspective investors are invited to submit questions to to power management.

Please submit questions by E mail to IR at <unk> Dot Com until Thursday February 29.

Management will either address your questions directly or provide a recorded Audi.

Question and answer dialog for Q4, 2023, Elliot Noss, President and Chief Executive Officer will be responding to your questions for your convenience. This audio file is also available as a transcript and the investors section of our website along with our Q4 2023 financial results and updated reports.

I'd also like to remind investors that if you would like to receive our quarterly reports and Q&A via E. Mail. Please make the request to IR at <unk> Dot com.

Note that the following discussion may include forward looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These.

These risk factors are described in detail in the Companys documents filed with the SEC specifically the most recent reports on the forms 10-Q and 10-K. The company urges you to read its security filings for a full description of the risk factors applicable to its business.

Today's commentary includes responses to questions submitted to US following the pre recorded management remarks regarding the quarter and outlook for the company. We are grouping similar questions into categories that we feel are addressing common queries.

If you have questions reach a certain threshold or volume we may ask you to schedule a call instead to ensure we can address the full body of your question.

And if you feel that the reported questions Andrew or any direct E. Mail you may receive do not address the full need of your questions. Please let us know go.

Go ahead Elliot.

Thank you Monica and welcome to our Q&A for fourth quarter 2023 financial results first I wanted to talk a bit about the recent announcement of our partnership in Orange Dolby.

Orange domains as a joint venture with trust machines, and hero systems that hopes to seamlessly connect domain names identity and web three.

I've been looking at the intersection between the open Internet and web three for some years and our partners here see the same future, we do one where elements of identity and functionality related to it.

On both sides need to work together seamlessly.

And this venture, we're providing our expertise and DNS and web registry and our reseller channel.

Just machines and hero are bringing their phenomenal expertise in web three <unk>.

Also worth noting that Don Ruiz, a seven plus year two cows alone is the GM at Orange domains.

It is a long term initiative and we are a minority partner.

We had a few questions about <unk> on partner economics, and a recurring question on our go to market strategy.

In our Investor Communications last year, we talked about long term margins in this business for a mature loaded footprint as being in the 60% to 70% range.

Each partner deal is different it depends on the level of guarantee whether the fee as per address or per customer who pays for the drop in install and other new launches at the very highest level with a gross over simplification you can think of the partner and the ISP splitting revenue $50 51.

One could apply that to the above and based on our current contracts and existing experienced XI long term margins on mature partner networks in the 30% to 35% range. This will generally be before the real overhead component of national costs, which we cannot turn into a relative number with that.

Making a bunch of assumptions.

I hope this helps.

We also had the recurring question around our go to market strategy. It reads. Initially it seemed the goal was to target rural locations, where team would have no direct fiber competition now it seems we're running towards more competitive markets.

I've answered this question regularly and we'll again there are two elements rural and competition.

We have never pursued rural markets, where mostly in suburban areas, but our filter with an urban or suburban is density.

<unk> fiber will generally needs to be subsidized and we are unlikely to be terribly active there.

In terms of competition again, nothing has changed we have the same view of fiber competition. We always have had one network makes sense <unk>.

<unk> networks are much more difficult, we avoid them in all ways possible.

I refer the question or back to our recent decision to pull out of Mesa, We wonder if the questioner is referring to Colorado Springs and note that the first deal announced there was ours in partnership with the local utility.

Accordingly, the question is more appropriately put to those who made follow up announced but we note that in our experience virtually every rational provider use things similarly, unusually senior heads prevail.

Thank you for listening to our Q&A and a reminder, that if you feel that the recorded answers or any direct E. Mail you receive do not address your questions. Please follow up with us at IR at <unk> Dot com.