Tucows issues amendment to Q4 2024 earnings

Canada NewsWire

TORONTO, March 13, 2025

TORONTO, March 13, 2025 /CNW/ - Tucows Inc. $(TCX)$ (TSX:TC), a global internet services leader, today reported an amendment to its unaudited financial results for the fourth quarter and full year ended December 31, 2024. All figures are in U.S. dollars.

Updated Financial Results

As a result of a recognized subsequent event, we have reduced our previously disclosed non-cash impairment charge for property and equipment. The previously disclosed amount for Q4 2024 and FY 2024 was reduced by $2.81 million, reflecting updated valuation inputs. All numbers have been updated in this release and in other Q4 2024 impacted reports, including the unaudited financial statements. The 2024 10-K reflects the revised results.

Net loss for the fourth quarter of 2024 was $42.5 million, or a loss of $3.86 per share, compared with net loss of $23.4 million, or a loss of $2.14 per share, for the fourth quarter of 2023. The increased loss was primarily a result of one-time impairment in Ting and restructuring charges, as well as increased interest expense. Excluding impairment, restructuring items and other transition costs, Adjusted net income(1) (loss) and Adjusted EPS(1) in Q4 2024 are ($15.8 million) and ($1.43) per share compared to Q4 2023 Adjusted net income(1) (loss) of ($22.4 million) and Adjusted EPS(1) of ($2.05) per share.

Summary Financial Results

(In Thousands of US Dollars, except Per Share data)

 
              3 Months ended December 31                12 Months ended December 31 
              2024          2023          % Change      2024          2023          % Change 
               (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Net Revenues        93,098        86,958           7 %       362,275       339,337           7 % 
Gross Profit        21,223        17,821          19 %        83,029        66,667          25 % 
Income 
 Earned on 
 Sale of 
 Transferred 
 Assets, net         3,244         4,062        (20) %        13,978        17,033        (18) % 
Net Income 
 (Loss)           (42,475)      (23,374)        (82) %     (109,860)      (96,197)        (14) % 
Adjusted Net 
 Income 
 (Loss)(1)        (15,775)      (22,382)          30 %      (76,817)      (74,779)         (3) % 
Basic 
 earnings 
 (Loss) per 
 common 
 share              (3.86)        (2.14)        (80) %       (10.02)        (8.85)        (13) % 
Adjusted 
 Basic 
 earnings 
 (Loss) per 
 common 
 share(1)           (1.43)        (2.05)          30 %        (7.00)        (6.88)         (2) % 
 
 
1.  Non-GAAP financial measures are described below and 
     reconciled to GAAP measures in the accompanying tables. 
 

Summary of Revenues, Gross Profit and Adjusted EBITDA

(In Thousands of US Dollars)

 
                 Revenue                     Gross Profit                Adj. EBITDA(1) 
                 3 Months ended December 31  3 Months ended December 31  3 Months ended December 31 
                 2024          2023          2024          2023          2024          2023 
                  (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Ting Internet Services: 
Fiber Internet 
 Services              15,749        13,821        10,994         7,881       (1,468)      (12,366) 
 
Wavelo Platform Services: 
Platform 
 Services               9,888         9,545         9,368         9,214         3,679         2,604 
 
Tucows Domain Services: 
Wholesale 
Domain Services        50,586        48,279         9,967         9,968 
Value Added 
 Services               5,480         4,184         4,981         3,661 
Total Wholesale        56,066        52,463        14,948        13,629 
 
Retail                  9,608         9,348         5,393         5,229 
Total Tucows 
 DomainServices        65,674        61,811        20,341        18,858        11,633        10,794 
 
Corporate: 
Mobile Services 
 and 
 Eliminations           1,787         1,781       (2,052)         (501)         (995)         1,522 
 
Network Expenses: 
Network, other 
 costs                    n/a           n/a       (5,990)       (7,584)           n/a           n/a 
Network, 
 depreciation 
 of property 
 and equipment            n/a           n/a      (10,536)       (9,533)           n/a           n/a 
Network, 
 amortization 
 of intangible 
 assets                   n/a           n/a         (366)         (371)           n/a           n/a 
Network, 
 impairment               n/a           n/a         (536)         (143)           n/a           n/a 
Total Network 
 Expenses                 n/a           n/a      (17,428)      (17,631)           n/a           n/a 
 
Total                  93,098        86,958        21,223        17,821        12,849         2,554 
 
 
(1) Non-GAAP financial measures are described below 
 and reconciled to GAAP measures in the accompanying 
 tables. 
 

Notes:

1. Tucows reports all financial information required in conformity with United States generally accepted accounting principles (GAAP).

Along with this information, to assist financial statement users in an assessment of our historical performance, the Company discloses non-GAAP financial measures in press releases and on investor conference calls and related events, as the Company believes that the non-GAAP information enhances investors' overall understanding of our financial performance, and should be read in addition to, rather than instead of, the financial statements prepared in accordance with GAAP.

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. The Company endeavors 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 U.S. GAAP; Adjusted net income to GAAP net income; and adjusted basic earnings per share to GAAP basic earnings per share, 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.

Adjusted EBITDA

The Company believes that the provision of this supplemental non-GAAP measure allows investors to evaluate the operational and financial performance of the Company's core business using similar evaluation measures to those used by management. The Company uses Adjusted EBITDA to measure its performance and prepare its budgets. Since Adjusted EBITDA is a non-GAAP financial performance measure, the Company's 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 certain 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.

The Company's Adjusted EBITDA definition excludes depreciation, impairment and loss on disposition of property and equipment, amortization of intangible assets, income tax provision, interest expense (net), stock-based compensation, asset impairment, gains and losses from unrealized foreign currency transactions, loss on debt extinguishment and costs that are 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 unhedged foreign currency contracts, 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 (in thousands of US dollars):

 
                   3 Months ended December 31    12 Months ended December 31 
                   2024           2023           2024            2023 
                    (unaudited)    (unaudited)    (unaudited)     (unaudited) 
Net income (Loss) 
 for the period         (42,475)       (23,374)       (109,860)       (96,197) 
Less: 
Provision 
 (recovery) for 
 income taxes              1,918        (1,316)           7,986        (6,873) 
Depreciation of 
 property and 
 equipment                10,637          9,661          40,323         36,431 
Impairment of 
 property and 
 equipment                18,262            143          19,167          4,822 
Amortization of 
 intangible 
 assets                    1,208          2,728           5,297         10,829 
Interest expense, 
 net                      13,748         12,651          51,275         41,771 
Loss on debt 
 extinguishment                -              -               -         14,680 
Stock-based 
 compensation              1,638          1,528           7,021          8,134 
Unrealized loss 
 (gain) on 
 foreign exchange 
 revaluation 
 of foreign 
 denominated 
 monetary assets 
 and liabilities           (525)          (316)           (168)           (62) 
Acquisition and 
 transition 
 costs*                    8,438            849          13,876          1,916 
 
Adjusted EBITDA           12,849          2,554          34,917         15,451 
 
 
* Acquisition and transition 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. 
 

Adjusted Net Income and Adjusted Basic Earnings Per Common Share (Adjusted EPS)

The Company believes that the provision of this supplemental non-GAAP measure allows investors to best evaluate our operating results and understand the operating trends of our core business without the effect of acquisition and transition costs, impairment expenses and losses on extinguishment of debt. Acquisition and transition 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. Since adjusted net income and adjusted EPS are non-GAAP financial performance measures, the Company's calculation of adjusted net income and adjusted EPS 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.

The Company's adjusted net income and adjusted EPS definitions exclude from the calculation of reported GAAP net income and GAAP EPS, the effect of the following items: impairment of property and expenses, acquisition and transition costs (including restructuring charges) and loss on debt extinguishment.

The following table reconciles adjusted net income and adjusted EPS to GAAP net income (In thousands of US dollars, except Per Share data):

 
                   3 Months ended December 31    12 Months ended December 31 
                   2024           2023           2024            2023 | 
                    (unaudited)    (unaudited)    (unaudited)     (unaudited) 
Net Income (Loss) 
 for the period         (42,475)       (23,374)       (109,860)       (96,197) 
Less: 
Loss on debt 
 extinguishment                -              -               -         14,680 
Acquisition and 
 transition 
 costs*                    8,438            849          13,876          1,916 
Impairment of 
 property and 
 equipment                18,262            143          19,167          4,822 
Adjusted Net 
 Income (Loss)(1) 
 for the period         (15,775)       (22,382)        (76,817)       (74,779) 
Adjusted Basic 
 Earnings (Loss) 
 Per Common 
 Share(1)                 (1.43)         (2.05)          (7.00)         (6.88) 
 
 
* Acquisition and transition 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. 
 

Management Commentary

Concurrent with the dissemination of its quarterly financial results news release at 5:05 p.m. ET on Thursday, February 13, 2025, management's pre-recorded audio commentary (and transcript), discussing the quarter and outlook for the Company will be posted to the Tucows website at http://www.tucows.com/investors/financials.

Following management's prepared commentary, for the subsequent seven days, until Thursday, February 20, 2025, shareholders, analysts and prospective investors can submit questions to Tucows' management at ir@tucows.com. Management will post responses to questions in an audio recording and transcript to the Company's website at http://www.tucows.com/investors/financials, on Tuesday, March 4, 2025, at approximately 5 p.m. ET. All questions will receive a response, however, questions of a more specific nature may be responded to directly.

About Tucows

Tucows helps connect more people to the benefit of internet access through communications service technology, domain services, and fiber-optic internet infrastructure. Ting .

Tucows, Ting, Wavelo, and Hover are registered trademarks of Tucows Inc. or its subsidiaries.

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our expectations regarding our future financial results and, including, without limitation, our expectations regarding our ability to realize synergies from the Enom acquisition and our expectation for growth of Ting Internet. 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. Information about other potential factors that could affect Tucows' business, results of operations and financial condition is included in the Risk Factors sections of Tucows' filings with the Securities and Exchange Commission. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements are based on information available to Tucows as of the date they are made. Tucows assumes no obligation to update any forward-looking statements, except as may be required by law.

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SOURCE Tucows Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/March2025/13/c8087.html

/CONTACT:

Monica Webb, Vice President, Investor Relations, 647.898.9924, mwebb@tucows.com

Copyright CNW Group 2025 
 

(END) Dow Jones Newswires

March 13, 2025 17:24 ET (21:24 GMT)