Release Date: August 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated net revenue for the second quarter increased 5.2% year-over-year to $89.4 million.
- Gross profit in Q2 grew 15.4% year-over-year to $20.8 million, with Ting contributing significantly.
- Adjusted EBITDA for the second quarter of 2024 increased 70% year-over-year to $9.2 million.
- Ting added 2,100 net new subscribers, growing 10.5% year-over-year.
- Total operating expenses decreased 5.5% to $29.4 million from $31.1 million in Q2 2023, reflecting effective cost management.
Negative Points
- Wavelo's revenues decreased 2% year-over-year due to a reduction in professional services fees.
- Net loss for the second quarter of 2024 was $18.6 million, although this was an improvement from the previous year.
- Cash and cash equivalents at the end of Q2 2024 were $39.3 million, significantly down from $147.9 million at the end of Q2 2023.
- Adjusted EBITDA for Ting was negative $6.4 million, although this was an improvement from the previous year's negative $10.3 million.
- Network expenses for Q2 were $17.3 million, up from $16.2 million for the same period last year, largely due to higher depreciation of expanding fiber network assets.
Q & A Highlights
Q: Can you provide more details on the financial performance of Ting in Q2 2024?
A: Elliot Noss, President and CEO, explained that Ting added 2,100 net new subscribers, growing 10.5% year-over-year to over 48,000 subscribers. Revenue for Q2 grew 17.4% year-over-year to $14.6 million, and gross margin grew 39% year-over-year to $9.8 million. Ting's adjusted EBITDA loss was reduced to $6.4 million for Q2, down by nearly $4 million year-over-year.
Q: How did Tucows Domains perform in the second quarter of 2024?
A: David Woroch, CEO of Tucows Domains, reported that revenue for domain services was $62.4 million, up 4% from the same quarter last year. Gross margin was $18.9 million, up 5.2% year-over-year. Adjusted EBITDA for domain services was $11.2 million, up 6% from Q2 of last year.
Q: What were the key financial results for Wavelo in Q2 2024?
A: Justin Reilly, CEO of Wavelo, noted that Wavelo's revenues were $10.5 million, up 11.8% from Q1 but down 2.3% from Q2 2023. Gross margin was $10.2 million, up 12.4% quarter-over-quarter and 1.1% year-over-year. Adjusted EBITDA for Q2 was $3.9 million, up 40.3% from last quarter and 14.1% year-over-year.
Q: Can you discuss the overall financial performance of Tucows Inc. in Q2 2024?
A: Ivan Ivanov, CFO, stated that total revenue for Q2 2024 increased 5.2% to $89.4 million. Gross profit before network costs increased 11.3% year-over-year to $38.1 million. Total operating expenses decreased 5.5% to $29.4 million. The net loss for Q2 2024 was $18.6 million, compared with a net loss of $30.8 million in Q2 2023. Adjusted EBITDA for Q2 was $9.2 million, up 70% from Q2 2023.
Q: What are the future plans for the capitalization of the Ting business?
A: Elliot Noss, President and CEO, mentioned that while there is nothing specific to share on the further capitalization of Ting, the company continues to see financial markets' sustained interest in securitization instruments for fiber deployments. The long-term resolution of the Ting business remains a top priority.
Q: How is Tucows managing its debt and leverage ratio?
A: Ivan Ivanov, CFO, reported that Tucows further deleveraged the business with $6.5 million in payments of syndicated debt in Q2. The leverage ratio was reduced to 3.17 times, marking the fifth consecutive quarter of reduction.
Q: What are the key trends and strategic focuses for Wavelo moving forward?
A: Justin Reilly, CEO of Wavelo, highlighted that Wavelo launched Product Catalog to allow operators flexibility and choice. The focus is on transitioning towards recurring platform revenues and targeting larger MVNOs, MNOs, and ISPs for longer-term profitable growth.
Q: Can you provide insights into the performance and future outlook of Tucows Domains' registry services business?
A: David Woroch, CEO of Tucows Domains, shared that the company won the business with .music to operate their registry backend and launched the first TLD .locker through the Orange Domains joint venture. Both new TLDs are expected to be in general availability before the end of the year.
Q: What are the key financial metrics for Tucows' consolidated results in Q2 2024?
A: Elliot Noss, President and CEO, noted that consolidated net revenue increased 5.2% year-over-year to $89.4 million. Gross profit grew 15.4% year-over-year to $20.8 million. Adjusted EBITDA increased 70% year-over-year to $9.2 million.
Q: How is Tucows addressing cost controls and margin improvements?
A: Elliot Noss, President and CEO, emphasized that the company is employing rigor around cost controls to support continued expansion of margin. This includes balancing investment in the businesses with paying down debt and being disciplined on cost controls, construction economics, and improving margins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
