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Tucows Inc (TCX)
NASDAQ:TCX
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Tucows
(NASDAQ:TCX)
42Neutral
Tucows (TCX) vs. S&P 500 (SPY)
Market Cap
$217.01M
Dividend YieldN/A
Average Volume (3M)49.36K
Price to Earnings (P/E)―
Beta (1Y)1.27
Revenue Growth7.50%
EPS Growth-4.22%
CountryUS
Employees1,045
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)-10.26
Shares Outstanding11,004,683
10 Day Avg. Volume47,288
30 Day Avg. Volume49,359
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.61
Price to Cash Flow (P/CF)-11.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Tucows Business Overview & Revenue Model
Company DescriptionTucows Inc. (TCX) is a global technology company that provides a variety of internet services. With a focus on domain registration, network access, and mobile services, Tucows operates through three main sectors: Domains, Ting Internet, and Wavelo. The company is well-known for being one of the largest domain name registrars in the world, offering a wide range of domain-related services. Additionally, Tucows provides fiber internet services through Ting Internet, and telecom software solutions via Wavelo.
How the Company Makes MoneyTucows makes money through multiple revenue streams. The Domains sector generates revenue primarily from the sale and management of domain names, which includes registration, renewal, and transfer services. Tucows earns a significant portion of its revenue from being a reseller of domain names as well as providing domain management services to businesses and individuals. The Ting Internet segment contributes to earnings by offering high-speed fiber internet services to residential and commercial customers in various U.S. markets. Revenue here comes from monthly subscription fees for internet access. Wavelo, Tucows' telecom software platform, generates income by providing cloud-based telecommunications services and software to mobile network operators and other service providers, charging fees for its software solutions and services. These combined operations allow Tucows to maintain a diversified revenue model with recurring income from subscriptions and service fees.
Tucows Financial Statement Overview
Summary
Tucows is experiencing significant financial challenges, with negative equity, persistent net losses, and poor cash flow generation. Despite some revenue growth, these factors indicate financial instability and a need for strategic adjustments.Income Statement
Tucows has struggled with profitability over recent periods, evident from its negative EBIT and net income in the TTM (Trailing-Twelve-Months). The gross profit margin has also declined from previous years, indicating cost pressures. While revenue has shown modest growth, the persistent net losses and declining profitability margins pose a significant concern.35
Negative
Balance Sheet
The company's balance sheet reflects a negative stockholders' equity in the TTM, which is a critical issue, indicating that liabilities exceed assets. The debt-to-equity ratio is not calculable due to negative equity, and the overall leverage remains high, suggesting financial instability and increased risk.30
Negative
Cash Flow
Tucows has a concerning cash flow position, characterized by negative operating and free cash flows in the TTM. The operating cash flow to net income ratio is also negative, highlighting challenges in converting revenue into cash. The company faces significant cash flow risks, impacting its ability to fund operations without additional financing.25
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 356.13M | 339.34M | 321.14M | 304.34M | 311.20M | 337.14M | Gross Profit |
| 74.47M | 108.86M | 78.25M | 78.29M | 85.48M | 100.78M | EBIT |
| -46.34M | -63.65M | -31.38M | -8.19M | 6.92M | 29.34M | EBITDA |
| 104.54M | -12.19M | 26.25M | 211.34M | 33.64M | 48.63M | Net Income Common Stockholders |
| -90.76M | -96.20M | -27.57M | 3.36M | 5.78M | 15.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 11.04M | 92.69M | 23.50M | 9.11M | 8.31M | 20.39M | Total Assets |
| 405.46M | 798.43M | 664.75M | 539.60M | 451.90M | 425.92M | Total Debt |
| 104.52M | 568.29M | 256.01M | 205.75M | 132.67M | 124.34M | Net Debt |
| 93.49M | 475.60M | 232.51M | 196.65M | 124.36M | 103.95M | Total Liabilities |
| 322.02M | 788.55M | 568.09M | 424.50M | 347.20M | 331.72M | Stockholders Equity |
| 83.44M | 9.88M | 96.66M | 115.09M | 104.70M | 94.19M |
| Cash Flow | Free Cash Flow | ||||
| -195.18M | -97.35M | -117.62M | -44.31M | -8.43M | -7.25M | Operating Cash Flow |
| -135.60M | -4.77M | 19.88M | 29.64M | 36.08M | 40.38M | Investing Cash Flow |
| -60.06M | -92.58M | -137.49M | -101.98M | -53.28M | -76.09M | Financing Cash Flow |
| 34.68M | 178.84M | 132.01M | 73.14M | 5.12M | 43.46M |
Tucows Technical Analysis
Positive
19.13
Price Trends
17.42
Positive
17.42
Positive
19.34
Negative
Market Momentum
0.75
Positive
54.15
Neutral
35.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCX, the sentiment is Positive. The current price of 19.13 is below the 20-day moving average (MA) of 19.41, above the 50-day MA of 17.42, and below the 200-day MA of 19.34, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 54.15 is Neutral, neither overbought nor oversold. The STOCH value of 35.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TCX.
Tucows Risk Analysis
Tucows disclosed 35 risk factors in its most recent earnings report. Tucows reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tucows Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $15.28B | ― | -1.24% | ― | 7.32% | 88.51% | |
67 Neutral | $11.98B | 24.11 | 10.66% | ― | 4.70% | -7.33% | |
60 Neutral | $2.44B | ― | 16.58% | ― | 8.99% | 63.84% | |
60 Neutral | $17.29B | ― | -2.39% | ― | 14.96% | 29.56% | |
58 Neutral | $21.67B | 10.04 | -18.58% | 2.39% | 5.01% | -23.17% | |
47 Neutral | $107.92M | ― | 226.54% | ― | -13.43% | 15.63% | |
42 Neutral | $217.01M | ― | 171.00% | ― | 7.50% | -4.22% |
* Technology Sector Average
Performance Comparison
TCX
Tucows
19.13
1.21
6.75%
AKAM
Akamai
78.66
-28.59
-26.66%
RNG
RingCentral
26.32
-8.65
-24.74%
ZG
Zillow Group Class A
66.40
20.18
43.66%
TWLO
Twilio
94.90
35.24
59.07%
VERI
Veritone
2.34
-1.54
-39.69%
Tucows Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 26.44% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced perspective with significant revenue growth and positive financial performance, particularly in Tucows Domains and Wavelo. However, these achievements are tempered by Ting's restructuring costs and operating losses, as well as a notable net loss for the quarter.Highlights
Strong Revenue Growth and Financial Performance
2024 marked the fourth consecutive year of consolidated revenue growth, with a 19% year-over-year gross profit expansion and more than doubling of annual Adjusted EBITDA to nearly $35 million. Excluding Ting, Adjusted EBITDA was $57.4 million, representing a 126% increase from $15.5 million in 2023.
Tucows Domains Revenue and Margin Growth
Tucows Domains grew revenue to $65.7 million in Q4, up 6% from the previous year, and gross margin increased by 8% to $20.3 million. Domain Services' Adjusted EBITDA was $11.6 million in Q4, up 8% year-over-year.
Wavelo's Positive Financial Metrics
Wavelo's revenue for 2024 was $39.9 million, with gross margin at $38.6 million. Adjusted EBITDA was $13.8 million, outperforming guidance and showing an increase from $10.6 million last year.
Ting's Subscriber and Revenue Growth
Ting reported $15.7 million in revenue for Q4, a 14% increase year-over-year, driven by a 17% increase in subscribers to 50,700. Gross Margin increased 40% to $11.0 million.
Record Debt Repayment
Tucows repaid $16.5 million on the syndicated bank loan in 2024, reducing interest expense and improving financial leverage.
Lowlights
Ting's Operating Losses and Restructuring Costs
Ting faced a $28.2 million one-time restructuring and impairment charge related to its capital efficiency plan, contributing to a net loss of $45.3 million for the quarter.
Wavelo's Quarterly Revenue Decline
Wavelo's quarterly revenue for Q4 was $9.9 million, down 1.9% from Q3, with gross margin down 6.5% from the previous quarter.
Net Loss and Adjusted EPS Decline
The company reported a net loss of $45.3 million for Q4, with an Adjusted EPS loss of $1.43 per share, primarily due to one-time charges associated with Ting.
Company Guidance
In the fourth quarter of 2024, Tucows demonstrated strong financial performance with a 7.1% increase in total revenue to $93.1 million and a notable 403% rise in Adjusted EBITDA to $12.8 million. The company reported a consolidated revenue growth for the year and a 19% increase in gross profit. Adjusted EBITDA more than doubled to nearly $35 million, excluding Ting, with total EBITDA reaching $57.4 million. Tucows Domains saw revenue rise by 6.2% to $65.7 million, with an 8% increase in gross margin to $20.3 million, and Adjusted EBITDA up 7.8% to $11.6 million. Wavelo reported a year-over-year revenue increase to $39.9 million, with a significant Adjusted EBITDA growth of 41% to $13.8 million, exceeding guidance. Ting's revenue grew 14% to $15.7 million, with a gross margin increase of 40% to $11 million and a narrowed Adjusted EBITDA loss of $1.5 million in Q4. The company also repaid $16.5 million on its syndicated bank loan and authorized a $40 million stock buyback program for 2025. Looking ahead, Tucows anticipates a 75% growth in Adjusted EBITDA for 2025, driven by continued progress in operational efficiencies and strategic initiatives across its business segments.Tucows Corporate Events
Business Operations and StrategyFinancial Disclosures
Tucows Inc. Implements Major Workforce Reduction Plan
Negative
Oct 31, 2024
Tucows Inc. has initiated a capital efficiency plan, significantly impacting its Ting business by reducing its workforce by 42% and overall company workforce by 17%. This move aims to lower expenses and transition Ting into a self-sustaining, cash-generating entity. While difficult, the plan is essential for enabling growth in Adjusted EBITDA and expanding market penetration. The company anticipates notable financial improvements by 2025, leveraging a more efficient cost structure and recent asset-backed securitization.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.