Q3 2025 Tucows Inc Earnings Call - Pre-recorded
2025 management commentary, we've prerecorded prepared remarks regarding the quarter and outlook for the company to cows generated transcript to these remarks with relevant links is also available on the Companys website. We will begin with opening remarks from Elliot Noss, President and CEO of 2010, followed by business.
Monica: Welcome to Tucows' Q3 2025 management commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the company. Tucows generated transcript of these remarks with relevant links is also available on the company's website. We will begin with opening remarks from Elliot Noss, President and CEO of Tucows and Ting, followed by business remarks from David Woroch, CEO of Tucows Domains, Justin Reilly, CEO of Wavelo, Elliot Noss on Ting, Ivan Ivanov, Tucows CFO, who will discuss our financial results in detail. We will finish with closing remarks from Elliot Noss. In lieu of a live question and answer period following these remarks, shareholders, analysts, and prospective investors are invited to submit questions to Tucows Management. Please submit questions via email to ir@tucows.com until Thursday, 13 November.
Remarks from David Warrick C E O of two cows to means.
Justin Reilly C O wavelength Elliot Noss on Ting, Ivan Ivan off to Cao CFO, who will discuss our financial results in detail and we will finish with closing remarks from Elliot Noss in lieu of a live question and answer period. Following these remarks shareholders analysts and prospective investors are invite.
To submit questions to <unk> management.
Please submit questions by E mail to IR at <unk> Dot Com until Thursday November 13th management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the tucows website on Tuesday November 25th at approximately five P. M. Eastern time, we would.
Monica: Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the Tucows website on Tuesday, November 25th at approximately 5:00 PM Eastern Time. We would also like to advise that the updated investor presentation and the Tucows quarterly KPI summary, providing key metrics for all of our businesses for the last 7 quarters, as well as for full years 2023, 2024, and 2025 year-to-date, along with historical financial results, are available in the Investors section of the website. Now for management's prepared remarks. On Thursday, November 6th, Tucows issued a news release reporting its financial results for the Q3 ended September 30th, 2025. That news release and the company's financial statements are available on the company's website at tucows.com under the Investors section.
Also like to advise that the updated investor presentation, and the two cows quarterly Kpis summary, providing key metrics for all of our businesses for the last seven quarters as well as for full year, 2023, 2024, and 2025 year to date.
Along with historical financial results are available in the investors section of the website.
Now for managements prepared remarks on Thursday November six two <unk> issued a news release reporting its financial results for the third quarter ended September 30th 2025 that news release and the company's financial statements are available on the company's website at <unk> Dot com under the investors section.
Please note. The following discussion may include forward looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC specifically the most recent reports on the forms 10-K and 10-Q the company urges you to read it.
Monica: Please note, the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable to its business. Now I would like to turn the call over to Tucows President and Chief Executive Officer, Elliot Noss. Go ahead, Elliot.
Security filings for a full description of the risk factors applicable to its business now.
Now I would like to turn the call over to <unk>, President and Chief Executive Officer Elliot Noss.
Go ahead Elliot.
Thank you Monica.
Top line growth momentum of the last four fiscal years and year to date continues in Q3 with 7% growth year over year.
Elliot Noss: Thank you, Monica. Tucows' top-line growth momentum of the last four fiscal years and year-to-date continues in Q3, with 7% growth year-over-year. Gross profit expanded 9% year-over-year, and adjusted EBITDA increased 53% to $13.3 million in Q3, and to $39.5 million year-to-date. This puts us well on track to meet our full-year adjusted EBITDA guidance of $47 million. Outperformance in both domains and Wavelo drove the upside, along with significantly improved adjusted EBITDA losses from Ting. We paid down a further $2.5 million on our syndicated bank loan. Corporate net debt now stands at $189.6 million, marking a sixth straight quarterly decline and bringing net leverage under 3, with interest coverage at 4.2 times, comfortably within our covenants. With that, I'll turn it over to David Woroch, CEO of Tucows Domains.
Gross profit expanded 9% year over year, and adjusted EBITDA increased 53% to $13 3 million in Q3 and to $39 5 million year to date.
Puts us well on track to meet our full year adjusted EBITDA guidance of $47 million out.
Outperformance in both domains and wave low drove the upside along with significantly improved adjusted EBITDA losses from TD.
We paid down a further $2 5 million on our syndicated bank loan.
Net debt now stands at $189 6 million, marking a sixth straight quarterly decline and bringing net leverage under three with interest coverage at four two times comfortably within our covenants and with that I'll turn it over to Dave work CEO of Tucows domains.
Thanks Elliot.
<unk> domains delivered another solid financial quarter, and Q3 with revenue gross margin and adjusted EBITDA, each increasing year over year. The gains continue the year to date performance that is lifting our adjusted EBITDA slightly ahead of pace for our 2025 guidance.
David Woroch: Thanks, Elliot. Tucows Domains delivered another solid financial quarter in Q3, with revenue, gross margin, and adjusted EBITDA each increasing year-over-year. The gains continue the year-to-date performance that is lifting our adjusted EBITDA slightly ahead of pace for our 2025 guidance. Revenue for Q3 grew 5% year-over-year, accompanied by a 7% increase in gross margin. Adjusted EBITDA was $12.1 million for the quarter, up 5% from the prior year, bringing year-to-date adjusted EBITDA to $36.2 million. Within our segments, our wholesale business continued its strong growth year-over-year, driven by consistent reseller demand and particularly by higher-margin value-added services. Q3 revenue for the wholesale channel rose 5% year-over-year to $58 million, compared to $55 million for Q3 of last year. Wholesale gross margin increased 10% to $15.8 million from $14.4 million last year.
Revenue for Q3 grew 5% year over year, accompanied by a 7% increase in gross margin adjusted.
Adjusted EBITDA was $12 1 million for the quarter up 5% from the prior year.
<unk> year to date, adjusted EBITDA to $36 2 million.
Within our segments, our wholesale business continued its strong growth year over year, driven by consistent reseller demand and particularly by higher margin value added services.
Q3 revenue for the wholesale channel rose, 5% year over year to $58 million compared to 55 million for Q3 of last year wholesale gross margin increased 10% to $15 8 million from $14 4 million last year.
Within the wholesale channel domain services delivered $10 1 million of gross margin up 4% from $9 7 million in Q3 2020 for.
David Woroch: Within the wholesale channel, domain services delivered $10.1 million of gross margin, up 4% from $9.7 million in Q3 2024. Value-added services had another exceptional quarter, generating $5.7 million in gross margin for a year-over-year gain of 21%, driven by strong sales from our expiry stream. The retail segment posted a modest revenue increase of 2% year-over-year to $9.8 million, and gross margin was flat at $5.5 million. Total domains under management and transaction volumes declined at 9% and 10% year-over-year, respectively, reflecting the impact of one wholesale customer migrating the bulk of its portfolio in-house. We've discussed this transaction over the past 2 quarters and expect its effects on domains under management to conclude in Q4, with the year-over-year impact on domain transactions continuing through next year when the full annual renewal cycle completes.
Value added services had another exceptional quarter generating $5 7 million and gross margin for a year over year gain of 21% driven by strong sales from our expiry stream the.
The retail segment posted a modest revenue increase of 2% year over year to $9 8 million and gross margin was flat at $5 5 million.
Total domains under management and transaction volumes declined, 9% and 10% year over year, respectively, reflecting the impact of one wholesale customer migrating the bulk of its portfolio in house. We've discussed this transaction over the past two quarters and expect its effects on domains under management.
To conclude in Q4 with the year over year impact on domain transactions continuing through next year when the full annual renewal cycle completes importantly, despite this transitional reduction in domains and transactions, which we have experienced from time to time in our 25 year history are diverse.
David Woroch: Importantly, despite this transitional reduction in domains and transactions, which we have experienced from time to time in our 25-year history, our diversified reseller base continues to drive stable and growing gross margin for the business. Net of some atypical registration activity, our renewal rate for Q3 was approximately 74% across all TLDs for the Tucows Domains brands. While in the lower end, it remains within our historical range and above the industry average. Worth noting, a slightly lower renewal rate does translate into more names expiring, which feeds into our expiry stream auction and sales. Turning to our registry services business, we have now been operating the registry platform for NIXI, the National Internet Exchange of India and registry operator of the .in country code TLD for 6 months.
<unk>, a reseller base continues to drive stable and growing gross margin for the business.
Net of some atypical registration activity.
Our renewal rate for Q3 was approximately 74% across all <unk> for the two cows domains brands and while in the lower end it remains within our historical range and above the industry average.
Operator: Welcome to Tucows Q3 2025 management commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the company. A Tucows-generated transcript of these remarks, with relevant links, is also available on the company's website. We will begin with opening remarks from Elliot Noss, President and CEO of Tucows on Ting, followed by business remarks from David Warrick, CEO of Tucows Domains, Justin Riley, CEO of Wavelo, Elliot Noss on Ting, Ivan Ivanov, Tucows CFO, who will discuss our financial results in detail, and we will finish with closing remarks from Elliot Noss. In lieu of a live question-and-answer period following these remarks, shareholders, analysts, and prospective investors are invited to submit questions to Tucows management. Please submit questions via email to ir@tucows.com until Thursday, 13 November 2025.
Also worth, noting our slightly lower renewal rate does translate into more names expiring, which feeds into our expiry stream auction and sales.
Turning to our registry services business, we have now been operating the registry platform for nixie, the National Internet exchange of India, and registry operator of the Dart I and country code TLD for six months, our partnership is going well and we have recently started to explore new and interesting initiative.
David Woroch: Our partnership is going well. We have recently started to explore new and interesting initiatives to expand our collaboration with NIXI. Our engagement with Radix remains equally strong, and although the migration has been postponed to early 2026, our teams and systems are ready and fully prepared to onboard and migrate more than 10 million domains across the Radix TLDs when the process starts. As mentioned last quarter, these two partnerships together position the Tucows registry segment to manage nearly 17 million domains. Tucows Domains continues to deliver consistent revenue and margin expansion, highlighting our solid fundamentals and strength of our global platform. We're well-positioned for Q4 and into 2026. Thanks for listening. Now over to Justin Reilly, CEO of Wavelo.
<unk> to expand our collaboration with mixing our engagement with radical remains equally strong and although the migration has been postponed to early 2026, our teams and systems are ready and fully prepared to onboard and migrate more than 10 million domains across the <unk> when the process starts.
As mentioned last quarter. These two partnerships together position the <unk> registry segment to managed nearly 17 million domains.
Operator: Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the Tucows website on Tuesday, 25 November 2025 at approximately 5:00PM Eastern Time. We would also like to advise that the updated investor presentation, and the Tucows Quarterly KPI Summary, providing key metrics for all of our businesses for the last seven quarters, as well as for full years 2023, 2024, and 2025 year-to-date, along with historical financial results, are available in the investor section of the website. Now for management's prepared remarks. On Thursday, 6 November 2025, Tucows issued a news release reporting its financial results for the third quarter ended 30 September 2025. That news release and the company's financial statements are available on the company's website at tucows.com under the investor section.
<unk> continues to deliver consistent revenue and margin expansion, highlighting our solid fundamentals and strength of our global platform, we are well positioned for Q4 and into 2026.
For listening and now over to Justin Reilly CEO of wavelength.
Thanks, Dave.
Q3 was another strong quarter for wafer level delivering double digit year over year growth in revenue gross margin and adjusted EBITDA waiver.
Justin Reilly: Thanks, Dave. Q3 was another strong quarter for Wavelo, delivering double-digit year-over-year growth in revenue, gross margin, and adjusted EBITDA. Wavelo's revenue was $11.9 million in Q3, an almost 18% increase from Q3 2024 and a 6% decrease from last quarter. Gross margin was $11.8 million this quarter, a 17.5% increase from Q3 2024 and a 6% decrease from last quarter. Adjusted EBITDA for Q3 was $4.3 million, a 25% increase year-over-year and a decrease of 20% quarter-over-quarter. The year-over-year growth reflects continued subscriber growth within the existing customer base, as well as the new EchoStar rate card introduced as part of the 4-year renewal at the start of 2025.
<unk> revenue was $11 9 million in Q3, and almost 18% increase from Q3, 2024, and a 6% decrease from last quarter gross margin was $11 $8 million. This quarter, a 17, 5% increase from Q3, 2024, and a 6% decrease from last quarter adjusted EBITDA.
For Q3 was $4 3, million% to 25% increase year over year, and a decrease of 20% quarter over quarter.
Operator: Please note the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable to its business. Now I would like to turn the call over to Tucows President and Chief Executive Officer Elliot Noss. Go ahead, Elliot.
The year over year growth reflects continued subscriber growth within the existing customer base as well as the new Echostar rate card introduced as part of a four year renewal at the start of 2025.
As a reminder, we typically see higher revenue recognition in Q2, each year from the expiry of bundled professional services that are included annually as part of our platform services agreement with Echostar. This quarter, we experienced a seasonal slowdown as we delivered professional services against those bundled hours ahead of.
Justin Reilly: As a reminder, we typically see higher revenue recognition in Q2 each year from the expiry of bundled professional services that are included annually as part of our platform services agreement with EchoStar. This quarter, we experienced a seasonal slowdown as we delivered professional services against those bundled hours ahead of their annual expiry. Looking ahead, we expect to continue recognizing revenue from these services on a more regular basis, which should reduce the historical seasonality in our quarterly results. As we navigate the back half of the year, we expect to continue to benefit from the tailwinds experienced year to date, but with a slight ramp in investment, particularly in sales and marketing, as we invest to acquire customers, build pipeline health, and drive bookings conversion.
Elliot Noss: Thank you, Monica. Tucows' top-line growth momentum of the last four fiscal years and year-to-date continues in Q3, with 7% growth year-over-year. Gross profit expanded 9% year-over-year, and adjusted EBITDA increased 53% to $13.3 million in Q3 and to $39.5 million year-to-date. This puts us well on track to meet our full-year adjusted EBITDA guidance of $47 million. Outperformance in both domains and Wavelo drove the upside, along with significantly improved adjusted EBITDA losses from Ting. We paid down a further $2.5 million on our syndicated bank loan. Corporate net debt now stands at $189.6 million, marking a sixth straight quarterly decline and bringing net leverage under 3, with interest coverage at 4.2 times, comfortably within our covenants. With that, I'll turn it over to David Warrick, CEO of Tucows Domains.
Their annual expiring looking ahead, we expect to continue recognizing revenue from these services on a more regular basis, which should reduce the historical seasonality in our quarterly results as we navigate the back half of the year. We expect to continue to benefit from the tailwind has experienced year to date, but with a slight ramp in investment, particularly in sales.
And marketing as we invest to acquire customers build pipeline health and drive bookings conversion top of the funnel activity increased meaningfully in Q3, driven in large part by our early network of systems integrator partnerships, which are now beginning to deliver qualified tier one and tier two introductions. This reflects.
Justin Reilly: Top of the funnel activity increased meaningfully in Q3, driven in large part by our early network of systems integrator partnerships, which are now beginning to deliver qualified tier 1 and tier 2 introductions. This reflects increasing market recognition of Wavelo's differentiated modular architecture and the appetite for credible alternatives to legacy BSS and OSS platforms. While operator sentiment remains cautious, with procurement cycles lengthening and some operators punting modernization decisions out a few quarters, the volume of RFI and RFP activities continues to rise, particularly around legacy replacement programs with a clear AI focus. Telecoms are signaling fatigue with both the inflexibility of large incumbents and the instability of small niche vendors. Wavelo's combination of simplicity, scalability, and enterprise-grade platform positions us well in this gap. We have maintained discipline in qualifying out smaller, lower-value opportunities to concentrate resources on transformational accounts that align with our long-term vision.
Increasing market recognition of wavelengths differentiated modular architecture, and the appetite for credible alternatives to legacy BSS and Oss platforms, while operator sentiment remains cautious with procurement cycles lengthening and some operators punting modernization decisions out of few quarters.
David Warrick: Thanks, Elliot. Tucows Domains delivered another solid financial quarter in Q3, with revenue, gross margin, and adjusted EBITDA each increasing year-over-year. The gains continue the year-to-date performance that is lifting our adjusted EBITDA slightly ahead of pace for our 2025 guidance. Revenue for Q3 grew 5% year-over-year, accompanied by a 7% increase in gross margin. Adjusted EBITDA was $12.1 million for the quarter, up 5% from the prior year, bringing year-to-date adjusted EBITDA to $36.2 million. Within our segments, our wholesale business continued its strong growth year-over-year, driven by consistent reseller demand, and particularly by higher margin value-added services. Q3 revenue for the wholesale channel rose 5% year-over-year to $58 million compared to $55 million for Q3 of last year. Wholesale gross margin increased 10% to $15.8 million from $14.4 million last year.
Volume of RFID in RFP activities continues to rise, particularly around legacy replacement programs with a clear AI focus telecoms are signaling fatigued with both the in flexibility of large incumbents and the instability of small niche vendors wavelengths combination of simplicity scalar.
Ability, an enterprise grade platform positions us well in this gap.
We have maintained discipline and qualifying out smaller lower value opportunities to concentrate resources on transformational accounts that align with our long term vision as our systems integrator channel matures, we expect to see the dual benefit of expanded distribution and more efficient delivery capacity.
Justin Reilly: As our systems integrator channel matures, we expect to see the dual benefit of expanded distribution and more efficient delivery capacity, which is a key lever in our ability to balance growth and profitability in years to come. Thanks for listening. Now over to Elliot.
Which is a key lever in our ability to balance growth and profitability in years to come thanks for listening and now over to Elliot. Thanks, Justin.
<unk> delivered another quarter of strong year over year growth and a meaningful improvement in adjusted EBITDA. A key contributor this quarter was the beginning of revenue from a large senior living community, we're expanding into.
Elliot Noss: Thanks, Justin. Ting delivered another quarter of strong year-over-year growth and a meaningful improvement in adjusted EBITDA. A key contributor this quarter was the beginning of revenue from a large senior living community we're expanding into. Revenue hit USD 17 million in Q3, an 11% increase year over year. Q3 gross margin declined to USD 10.5 million from USD 11 million in Q3 of last year. This is primarily from Ting revenues increasing in partner markets over owned markets, as our partner markets builds accelerate and partner markets have costs associated with network leases that impact margin. Ting's adjusted EBITDA also continues to trend in a positive direction, with a small loss of USD 880,000 in Q3, down from USD 5.1 million in Q3 of 2024.
Revenue hit $17 million in Q3, and 11% increase year over year.
David Warrick: Within the wholesale channel, domain services delivered $10.1 million of gross margin, up 4% from $9.7 million in Q3 2024. Value-added services had another exceptional quarter, generating $5.7 million in gross margin for a year-over-year gain of 21%, driven by strong sales from our Expiry Stream. The retail segment posted a modest revenue increase of 2% year-over-year to $9.8 million, and gross margin was flat at $5.5 million. Total domains under management and transaction volumes declined at 9% and 10% year-over-year, respectively, reflecting the impact of one wholesale customer migrating the bulk of its portfolio in-house. We've discussed this transaction over the past two quarters and expect its effects on domains under management to conclude in Q4, with the year-over-year impact on domain transactions continuing through next year when the full annual renewal cycle completes.
Third quarter gross margin declined to $10 5 million from $11 million in Q3 of last year. This is primarily from Ting revenues, increasing and partner markets over owned markets as our partner markets builds accelerate and partner markets have costs associated with network leases that.
<unk> margin <unk> adjusted EBITDA also continues to trend in a positive direction with a small loss of $880000 in Q3 down from $5 1 million in Q3 of 2024.
In Q3, 2025, our enterprise and other things segment, which includes enterprise bulk fixed wireless and the remaining cedar footprint delivered $3 6 million in revenue and.
Elliot Noss: In Q3 2025, our enterprise and other Ting segment, which includes enterprise, bulk, fixed wireless, and the remaining Cedar footprint, delivered $3.6 million in revenue and $926,000 in contribution margin. Results were led by continued strength in enterprise and bulk, where revenue grew 28% year over year. Year to date, the segment has generated $11.3 million in revenue and $3.2 million in contribution margin, highlighting the consistency and profitability of this part of the business. We have continued to divest of non-strategic assets, which this quarter includes the southern part of our Cedar footprint in Colorado. A reminder that these are markets where we no longer have the capital to build and network construction inventory we no longer intend to use. In Q3, we generated $8.5 million from these divestitures.
926000 in contribution margin results were led by continued strength in enterprise of bulk where revenue grew 28% year over year year to date. The segment has generated $11 $3 million in revenue and $3 2 million in contribution margin highlighting the consistency and profitability.
David Warrick: Importantly, despite this transitional reduction in domains and transactions, which we have experienced from time to time in our 25-year history, our diversified reseller base continues to drive stable and growing gross margin for the business. Net of some atypical registration activity, our renewal rate for Q3 was approximately 74% across all TLDs for the Tucows Domains brands, and while in the lower end, it remains within our historical range, and above the industry average. Also worth noting, a slightly lower renewal rate does translate into more names expiring, which feeds into our Expiry Stream auction and sales. Turning to our registry services business, we have now been operating the registry platform for NICSI, the National Internet Exchange of India, and registry operator of the .in country code TLD, for six months.
This part of the business, we have continued to divest of non strategic assets, which this quarter includes the southern part of our Cedar footprint in Colorado. A reminder, that these are markets, where we no longer have the capital to build and network construction inventory, we no longer intend to use in Q3, we generated eight.
$5 million from these divestitures year to date in 2025. The company has generated gross proceeds of $28 million of these divestitures and the net book value of assets at the time of the sales was $15 million, resulting in a gain of $5 8 million at the sale of these network footprints naturally brings down our <unk>.
Elliot Noss: Year to date in 2025, the company has generated gross proceeds of $20.8 million on these divestitures, and the net book value of assets at the time of the sales was $15 million, resulting in a gain of $5.8 million. The sale of these network footprints naturally brings down our reported subscriber and serviceable address numbers, and you'll see that reflected in the Q3 KPI summary. Now we'll hear from our CFO, Ivan Ivanov, who will discuss our financial results in detail.
Reported subscriber and serviceable address numbers and Youll see that reflected in the Q3 Kpis submarine.
Now, we'll hear from our CFO, Ivan <unk>, who will discuss our financial results in detail.
David Warrick: Our partnership is going well, and we have recently started to explore new and interesting initiatives to expand our collaboration with NICSI. Our engagement with Radix remains equally strong, and although the migration has been postponed to early 2026, our teams and systems are ready and fully prepared to onboard and migrate more than 10 million domains across the Radix TLDs when the process starts. As mentioned last quarter, these two partnerships together position the Tucows Domains registry segment to manage nearly 17 million domains. Tucows Domains continues to deliver consistent revenue and margin expansion, highlighting our solid fundamentals and strength of our global platform. We're well positioned for Q4 and into 2026. Thanks for listening, and now over to Justin Riley, CEO of Wavelo.
Thank you Elliot and thank you all for joining us today.
Ivan Ivanov: Thank you, Elliot, and thank you all for joining us today. The Q3 extended the year's trajectory of steady top-line growth and expanding profitability. At the consolidated level, revenue was $98.6 million, up 7% year-over-year. Gross profit was $24.2 million, up 9%, and adjusted EBITDA increased 53% to $13.3 million. Year to date, adjusted EBITDA totaled $39.5 million, putting us well along the path towards our full year target. On a GAAP basis, net loss for the quarter was $23 million and adjusted net loss was $15.8 million, reflecting both the step-up in operating performance and the impact of the non-cash items I'll detail in a moment.
Third quarter extended the year's trajectory of steady topline growth and expanding profitability.
Solid that is level revenue was $98 6 million up 7% year over year gross profit was $24 2 million up 9%.
And adjusted EBITDA increased 53% to $13 $3 million year.
Year to date.
EBITDA totaled $39 5 million, putting us well along the path towards our full year targets.
On a GAAP basis net loss for the quarter was $23 million.
And adjusted net loss was $15 8 million, reflecting box the step up in operating performance and the impact of the noncash items I will detail in a moment.
Justin Riley: Thanks, Dave. Q3 was another strong quarter for Wavelo, delivering double-digit year-over-year growth in revenue, gross margin, and adjusted EBITDA. Wavelo's revenue was $11.9 million in Q3, an almost 18% increase from Q3 2024, and a 6% decrease from last quarter. Gross margin was $11.8 million this quarter, a 17.5% increase from Q3 2024, and a 6% decrease from last quarter. Adjusted EBITDA for Q3 was $4.3 million, a 25% increase year-over-year, and a decrease of 20% quarter-over-quarter. The year-over-year growth reflects continued subscriber growth within the existing customer base, as well as the new EchoStar rate card introduced as part of the four-year renewal at the start of 2025. As a reminder, we typically see higher revenue recognition in Q2 each year from the expiry of bundled professional services that are included annually as part of our platform services agreement with EchoStar.
Beginning this quarter, we revised our presentation of segment gross profit in our press release.
Ivan Ivanov: Beginning this quarter, we revised our presentation of segment gross profit in our press release to reflect amounts net of network expenses, aligning external reporting with how we manage the business. The change does not affect consolidated revenue, gross profit or adjusted EBITDA. This quarter also includes a $10.9 million non-cash impairment related to revalued inventory and warehouse lease right-of-use assets at Ting. This charge is excluded from adjusted EBITDA and has no impact on cash. It was part of our ongoing effort to streamline the asset base as Ting completes its pivot to a capital-light ISP model. Also consistent with what we signaled last quarter, we continue to recycle non-strategic assets and recognized approximately $4 million of gains on asset sales this quarter. Last quarter, we noted an additional transaction would be recognized in Q3 and it flowed through as expected. Moving on to segments performance.
Flex amounts net of network expenses.
Aligning external reporting with how we manage the business.
The change does not affect consolidated revenue gross profit or adjusted EBITDA. This.
This quarter also includes a $10 9 million noncash impairment or led us to reevaluate inventory and warehouse needs right of use assets.
This charge is excluded from adjusted EBITDA and has no impact on cash it was part of our ongoing effort to streamline the asset base.
Inc completed its <unk> to a capital light ISP model.
Also consistent with what we signaled last quarter, we continue to recycle non strategic assets and recognized approximately $4 million of gains on asset sales. This quarter last quarter. We noted an additional transaction would be recognized in Q3, and it's flawed to asics.
Justin Riley: This quarter, we experienced a seasonal slowdown as we delivered professional services against those bundled hours ahead of their annual expiry. Looking ahead, we expect to continue recognizing revenue from these services on a more regular basis, which should reduce the historical seasonality in our quarterly results. As we navigate the back half of the year, we expect to continue to benefit from the tailwinds experienced year-to-date, with a slight ramp in investment, particularly in sales and marketing, as we invest to acquire customers, build pipeline health, and drive bookings conversion. Top-of-the-funnel activity increased meaningfully in Q3, driven in large part by our early network of systems integrator partnerships, which are now beginning to deliver qualified Tier 1 and Tier 2 introductions. This reflects increasing market recognition of Wavelo's differentiated modular architecture, and the appetite for credible alternatives to legacy BSS and OSS platforms.
Moving on to segment performance.
Domains delivered another solid quarter of earnings with revenue of $67 8 million and segment adjusted EBITDA of $12 1 million wholesale and retail Bulks contributed with value added services, including the expiry stream the remaining and notable margin fiber.
Ivan Ivanov: Tucows Domains delivered another solid quarter of earnings with revenue of $67.8 million and segment adjusted EBITDA of $12.1 million. Wholesale and retail both contributed with value-added services, including the expiry stream remaining a notable margin driver. Wavelo recorded another strong quarter with revenue of $11.9 million and adjusted EBITDA of $4.3 million, both up double digits year-over-year. Importantly, Wavelo continues to pair growth with operating discipline, producing gross margins at 99.3% of revenue this quarter. Ting's top-line momentum continued with revenue of $17 million, up 11% year-over-year. Ting reported gross profit of $10.5 million and adjusted EBITDA improved to a loss of -$0.9 million, a year-over-year improvement of more than $4 million.
<unk> recorded another strong quarter with revenue of $11 9 million and adjusted EBITDA of $4 3 million bulk up double digits year over year Importantly, weibo continues to pair growth with operating discipline producing gross margins.
At 99, 3% of revenue this quarter.
Justin Riley: While operator sentiment remains cautious, with procurement cycles lengthening and some operators punting modernization decisions out a few quarters, the volume of RFI and RFP activities continues to rise, particularly around legacy replacement programs with a clear AI focus. Telecoms are signaling fatigue with both the inflexibility of large incumbents, and the instability of small niche vendors. Wavelo's combination of simplicity, scalability, and enterprise-grade platform positions us well in this gap. We have maintained discipline in qualifying out smaller, lower-value opportunities to concentrate resources on transformational accounts that align with our long-term vision. As our systems integrator channel matures, we expect to see the dual benefit of expanded distribution, and more efficient delivery capacity, which is a key lever in our ability to balance growth and profitability in years to come. Thanks for listening, and now over to Elliot.
Top line momentum continued with revenue of $17 million up 11% year over year.
<unk> reported gross profit of $10 5 million and adjusted EBITDA improved to a loss of zero point $9 million a year over year improvement of more than $4 million as we called out in the release a higher part of our address mix weighted on near term gross margin consistent with our capital.
Ivan Ivanov: As we called out in the release, a higher partner address mix weighted on near term gross margin consistent with our capital light demand led strategy. On cash flow and balance sheet, cash and restricted cash ended the quarter at USD 70.8 million, up from USD 68.6 million in Q2. Net cash provided by operating activities was USD 1.5 million for the quarter and net cash used by operating activities of USD 3.2 million year to date, reflecting normal working capital seasonality and the timing of certain cash expenses. We continue to be disciplined with capital allocation, including cash conservation. The partner mix shift at Ting reduces capital intensity, and we are recycling capital through the sale of non-strategic assets, as noted earlier. As of 30 September 2025, Ting elected to defer the preferred return to Generate for the past 2 quarters.
Light demand led strategy on cash flow and balance sheet.
Cash and restricted cash ended the quarter at $78 million up from $68 6 million in Q2.
Net cash provided by operating activities was $1 5 million for the quarter and net cash used by operating activities of $3 2 million year to date, reflecting normal working capital seasonality and the timing of certain cash expenses.
We continue to be disciplined with capital allocation, including cash conservation.
Elliot Noss: Thanks, Justin. Ting delivered another quarter of strong year-over-year growth and a meaningful improvement in adjusted EBITDA. A key contributor this quarter was the beginning of revenue from a large senior living community we're expanding into. Revenue hit $17 million in Q3, an 11% increase year-over-year. Third-quarter gross margin declined to $10.5 million from $11 million in Q3 of last year. This is primarily from Ting revenues increasing in partner markets over owned markets, as our partner markets' builds accelerate, and partner markets have costs associated with network leases that impact margin. Ting's adjusted EBITDA also continues to trend in a positive direction, with a small loss of $880,000 in Q3, down from $5.1 million in Q3 of 2024. In Q3 2025, our enterprise and other Ting segment, which includes enterprise, bulk, fixed wireless, and the remaining cedar footprint, delivered $3.6 million in revenue and $926,000 in contribution margin.
The partner mix shift at Pink reduces capital intensity and we are recycling capital toward the sale of non strategic assets. As noted earlier further as of September 30th 25 bank elected to defer the preferreds returned to generate for the past two quarters.
In accordance with the terms of the agreement the deferred amount plus interest has been treated as payment in kind.
Ivan Ivanov: In accordance with the terms of the agreement, the deferred amount plus interest has been treated as payment in kind or PIK of $9.5 million and added to the outstanding balance of the redeemable preferred units. With $39.5 million of adjusted EBITDA generated through Q3, we are well on track to achieve our full year adjusted EBITDA guidance of $47 million. Organizational-wide execution, cost discipline, and adoption of AI are the key levers. In summary, Q3 shows continued momentum of top-line growth, expanding adjusted EBITDA and disciplined capital management. We will stay focused on execution and capital efficiency as we close out the year. I will now hand it back to Elliot, but before I do, I would like to thank Elliot for his leadership, mentorship, and friendship throughout my relatively short tenure at Tucows.
<unk> of $9 5 million and added to the outstanding balance of the redeemable preferred units.
$9 5 million of adjusted EBITDA generated till Q3, we are well on track to achieve our full year adjusted EBITDA guidance of $47 million organizational wide execution cost discipline and adoption of AI.
The key levers.
In summary, Q3 shows continued momentum of topline growth expanding adjusted EBITDA and disciplined capital management, we will stay focused on execution and capital efficiency as we close out the year I will now hand, it back to al it but before I do I would like to thank Elliott <unk> leadership.
Elliot Noss: Results were led by continued strength in enterprise and bulk, where revenue grew 28% year-over-year. Year-to-date, the segment has generated $11.3 million in revenue and $3.2 million in contribution margin, highlighting the consistency and profitability of this part of the business. We have continued to divest of non-strategic assets, which this quarter includes the southern part of our cedar footprint in Colorado, a reminder that these are markets where we no longer have the capital to build and network construction inventory we no longer intend to use. In Q3, we generated $8.5 million from these divestitures. Year-to-date in 2025, the company has generated gross proceeds of $20.8 million on these divestitures, and the net book value of assets at the time of the sales was $15 million, resulting in a gain of $5.8 million.
Mentorship and friendship broth minority of his short tenure at <unk> will continue to work together as we manage the tank process and I also look forward to working with Dave. Thank you.
Ivan Ivanov: We will continue to work together as we manage the Ting process. I also look forward to working with Dave. Thank you.
First I noted last quarter that we were evaluating strategic paths for team and I will share that we are formally involved in a process for the Ting business. We believe that the sale of <unk> strength in <unk> in the long term by enabling it to focus on its domain and wave low businesses, even though <unk> does.
Elliot Noss: Thank you, Ivan. First, I noted last quarter that we were evaluating strategic paths for Ting, and I will share that we are formally involved in a process for the Ting business. We believe that the sale of Ting will strengthen Tucows in the long term by enabling it to focus on its domain and Wavelo businesses, even though Tucows does not expect to realize significant profit, if any, from the sale of Ting, given its asset-based debt and preferred share obligations. We expect to have a clear sense of direction by the end of the year and will, of course, share information as appropriate. With that shared, I will now turn to personal news. Over the last 5 to 10 years or so, my time has been spent more and more on Ting and less and less with the rest of the business.
Not expect to realize significant profit if any from the sale of <unk> given its asset based debt and preferred share obligations. We expect to have a clear sense of direction by the end of the year and we'll of course share information as appropriate.
Elliot Noss: The sale of these network footprints naturally brings down our reported subscriber and serviceable address numbers, and you'll see that reflected in the Q3 KPI summary. Now we'll hear from our CFO, Ivan Ivanov, who will discuss our financial results in detail.
With that shared I will now turn to personal news over the last five to 10 years or so my time has been spent more and more on <unk> and less and less with the rest of the business.
And Justin and Dave we have two excellent Ceos and now with Ivan we are doing an even better job of providing the shared services that come out of Tcs.
Elliot Noss: In Justin and Dave, we have two excellent CEOs, and now with Ivan, we are doing an even better job of providing the shared services that come out of TCX. While I will remain with the Ting business through the end of the process, and hopefully thereafter, I will be stepping back after nearly 30 years, and as of today, I will no longer be the CEO of Tucows. Dave Woroch will step into that role. I know that with Dave, Justin, and Ivan, I am leaving things in great hands. I will remain on the board, and I'm a large investor. I am blessed and proud. We created the world's first edge network with the original software libraries. We created wholesale domain registration out of whole cloth, which fundamentally changed the way domain names were distributed.
Ivan Ivanov: Thank you, Elliot, and thank you all for joining us today. The third quarter extended the year's trajectory of steady top-line growth and expanding profitability. At the consolidated level, revenue was $98.6 million, up 7% year-over-year. Gross profit was $24.2 million, up 9%, and adjusted EBITDA increased 53% to $13.3 million. Year-to-date, adjusted EBITDA totaled $39.5 million, putting us well along the path towards our full-year target. On a GAAP basis, net loss for the quarter was $23 million, and adjusted net loss was $15.8 million, reflecting both the step-up in operating performance and the impact of the non-cash items I'll detail in a moment. Beginning this quarter, we revised our presentation of segment gross profit in our press release to reflect amounts net of network expenses, aligning external reporting with how we manage the business. The change does not affect consolidated revenue, gross profit, or adjusted EBITDA.
While I will remain with the Ting business through the end of the process and hopefully thereafter, I will be stepping back after nearly 30 years and as of today I will no longer be the CEO of <unk>.
<unk> will step into that role and I know that with Dave adjusted and Ivan I am leaving things in great hands I will remain on the board and I'm, a large investor I.
I am Blessed and proud we created the worlds first edge network with the original software libraries, we created wholesale domain registration of whole cloth, which fundamentally changed the way domain names were distributed.
We let a wave of innovation and U S mobile introducing innovations that T mobile repeatedly copied and called on carrier, we started and continue to be key players in the wave of partner or as those who want to Miss named them say open access networks in the U S and through it all we did it in a way that treat at all.
Elliot Noss: We led a wave of innovation in US Mobile, introducing innovations that T-Mobile repeatedly copied and called Un-carrier. We started and continue to be key players in the wave of partner, or as those who want to misname them say, open access networks in the US. Through it all, we did it in a way that treated all stakeholders, employees, partners, customers, as well as investors like humans. I've been blessed with thousands of proud moments. Looking back on nearly 30 years, proudest ones are the little ones. The employee that I have never met making a point of telling me how much they enjoyed their job and how the work environment was unlike any they had experienced. It was the customer stopping me on a beach in the Caribbean while wearing a Ting shirt to tell me how fantastic their customer experience was.
Stakeholders employees partners customers as well as investors like humans.
<unk> been blessed with thousands of proud moments looking back on nearly 30 years proudest ones are the little ones. The employee that I have never met making a point of telling me how much they enjoyed their job and how the work environment was unlike any day of experience. It was the customers stopping me on a beach in the Caribbean, while wearing a T.
Ivan Ivanov: This quarter also includes a $10.9 million non-cash impairment related to revalued inventory and warehouse lease right-of-use assets at Ting. This charge is excluded from adjusted EBITDA and has no impact on cash. It was part of our ongoing effort to streamline the asset base as Ting completes its pivot to a capital-light ISP model. Consistent with what we signaled last quarter, we continue to recycle non-strategic assets and recognize approximately $4 million of gains on asset sales this quarter. Last quarter, we noted an additional transaction would be recognized in Q3, and it flowed through as expected. Moving on to segments performance, Tucows Domains delivered another solid quarter of earnings with revenue of $67.8 million and segment-adjusted EBITDA of $12.1 million. Wholesale and retail both contributed, with value-added services, including the Expiry Stream, remaining a notable margin driver.
Sure. So tell me how fantastic the customer experience was it was investors telling us how straightforward we were in our communications. It was the partner letting me know they chose us because of how we treated them.
Elliot Noss: It was investors telling us how straightforward we were in our communications. It was the partner letting me know they chose us because of how we treated them. At the end of the day, this is all culture is simply people manifesting relationships. I've always fundamentally believed that most people are simply hoping for the opportunity to do their best work, my goal was always to create a culture that left them. That trust can be taken advantage of, overwhelmingly it is not, I am confident that this culture will continue. As for me, I will remain on the board and connected to both domains and Wavelo. In closing, I want to thank all of those investors and others who have supported Tucows and me over the years. With many of you, we have had long relationships with the common bond of TCX stock.
The end of the day. This is all culture and culture is simply people manifesting relationships.
I've always fundamentally believed that most people are simply hoping for the opportunity to do their best work and my goal was always to create a culture that is left that trust can be taken advantage of but overwhelmingly it is not and I am confident that this culture will continue.
As for me I will remain on the board and connected to both domains and wavelength in closing I want to thank all of those investors and others, who have supported <unk> over the years with many of you. We have had long relationships with the common bond of Tcs stock for this group in particular I want to be clear that the work.
Elliot Noss: For this group in particular, I want to be clear that the work is not done. The management team and the board look forward to doing that work. With that, please ask your questions of my successors.
Ivan Ivanov: Wavelo recorded another strong quarter with revenue of $11.9 million and adjusted EBITDA of $4.3 million, both up double digits year-over-year. Importantly, Wavelo continues to pair growth with operating discipline, producing gross margins at 99.3% of revenue this quarter. Ting's top-line momentum continued with revenue of $17 million, up 11% year-over-year. Ting reported gross profit of $10.5 million, and adjusted EBITDA improved to a loss of $0.9 million, a year-over-year improvement of more than $4 million. As we called out in the release, a higher partner address mix weighted on near-term gross margin, consistent with our capital-light, demand-led strategy. On cash flow and balance sheet, cash and restricted cash ended the quarter at $70.8 million, up from $68.6 million in Q2.
<unk> is not done the management team and the board look forward to doing that work.
And with that please ask your questions of my successors.
And if you do have questions. Please send them to IR at <unk> Dot Com by November 13th and look for a recorded Q&A audio response and transcript to this call can be posted to the Tucows website on Tuesday November 25th at approximately five PM Eastern time.
Monica: If you do have questions, please send them to ir@tucows.com by 13 November and look for our recorded Q&A audio response and transcript to this call to be posted to the Tucows website on Tuesday, 25 November at approximately 5:00 PM Eastern Time. Thank you.
Thank you.
Ivan Ivanov: Net cash provided by operating activities was $1.5 million for the quarter, and net cash used by operating activities of $3.2 million year-to-date, reflecting normal working capital seasonality and the timing of certain cash expenses. We continue to be disciplined with capital allocation, including cash conservation. The partner mix shift at Ting reduces capital intensity, and we are recycling capital through the sale of non-strategic assets, as noted earlier. Further, as of 30 September 2025, Ting elected to defer the preferred return to generate for the past two quarters. In accordance with the terms of the agreement, the deferred amount plus interest has been treated as payment in kind, or PIK, of $9.5 million and added to the outstanding balance of the redeemable preferred units. With $39.5 million of adjusted EBITDA generated through Q3, we are well on track to achieve our full-year adjusted EBITDA guidance of $47 million.
Ivan Ivanov: Organization-wide execution, cost discipline, and adoption of AI are the key levers. In summary, Q3 shows continued momentum of top-line growth, expanding adjusted EBITDA, and disciplined capital management. We will stay focused on execution and capital efficiency as we close out the year. I will now hand it back to Elliot, before I do, I would like to thank Elliot for his leadership, mentorship, and friendship throughout my relatively short tenure at Tucows. We will continue to work together as we manage the Ting process, and I also look forward to working with Dave. Thank you.
Elliot Noss: Thank you, Ivan. I noted last quarter that we were evaluating strategic paths for Ting, and I will share that we are formally involved in a process for the Ting business. We believe that the sale of Ting will strengthen Tucows in the long term by enabling it to focus on its domain and Wavelo businesses, even though Tucows does not expect to realize significant profit, if any, from the sale of Ting, given its asset-based debt and preferred share obligations. We expect to have a clear sense of direction by the end of the year and will, of course, share information as appropriate. With that shared, I will now turn to personal news. Over the last five to 10 years or so, my time has been spent more and more on Ting and less and less with the rest of the business.
Elliot Noss: In Justin and Dave, we have two excellent CEOs, and now with Ivan, we are doing an even better job of providing the shared services that come out of TCX. While I will remain with the Ting business through the end of the process, and hopefully thereafter, I will be stepping back after nearly 30 years, and as of today, I will no longer be the CEO of Tucows. Dave Warrick will step into that role, and I know that with Dave, Justin, and Ivan, I am leaving things in great hands. I will remain on the board, and I'm a large investor. I am blessed and proud. We created the world's first edge network with the original software libraries. We created wholesale domain registration out of whole cloth, which fundamentally changed the way domain names were distributed.
Elliot Noss: We led a wave of innovation in US mobile, introducing innovations that T-Mobile repeatedly copied and called on carrier. We started and continue to be key players in the wave of partner, or as those who want to misname them say, open access networks in the US. Through it all, we did it in a way that treated all stakeholders, employees, partners, customers, as well as investors, like humans. I've been blessed with thousands of proud moments. Looking back on nearly 30 years, the proudest ones are the little ones. The employee that I have never met making a point of telling me how much they enjoyed their job and how the work environment was unlike any they had experienced. It was the customer stopping me on a beach in the Caribbean while wearing a Ting shirt to tell me how fantastic their customer experience was.
Elliot Noss: It was investors telling us how straightforward we were in our communications. It was the partner letting me know they chose us because of how we treated them. At the end of the day, this is all culture, and culture is simply people manifesting relationships. I've always fundamentally believed that most people are simply hoping for the opportunity to do their best work, and my goal was always to create a culture that lets them. That trust can be taken advantage of, but overwhelmingly it is not, and I am confident that this culture will continue. As for me, I will remain on the board and connected to both domains and Wavelo. In closing, I want to thank all of those investors and others who have supported Tucows and me over the years. With many of you, we have had long relationships with the common bond of TCX stock.
Elliot Noss: For this group in particular, I want to be clear that the work is not done. The management team and the board look forward to doing that work. With that, please ask your questions of my successors.
Operator: If you do have questions, please send them to ir@tucows.com by 13 November and look for our recorded Q&A audio response and transcript to this call to be posted to the Tucows website on Tuesday, 25 November at approximately 5:00PM Eastern Time. Thank you.