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| Statement |
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| When looking across the different businesses, Ting had revenue gains of 21% year-over-year, increasing to $13.8 million in Q4 2023 from $11.5 million in Q4 2022 |
| Q4 was another very strong quarter of construction for Ting, resulting in 27% year-over-year growth of completed serviceable addresses, taking us to 121,300 serviceable addresses for Ting-owned infrastructure |
| As I shared at Investor Day, we are seeing solid traction with small to midsize ISPs with a focus on automating end-to-end billing and provisioning, as well as adding mobile as a value-added service |
| Tucows consolidated revenue grew 10% year-over-year, and a strong finish to the year helped drive Tucows operating cash flow to $9 million in the fourth quarter, up from $2.9 million in Q4 of last year |
| In fact, as many of you know, we have successfully turned this into a moat around the business |
| As we close out fiscal 2023, I’m particularly pleased that Tucows Domains grew revenue and gross margin, on a quarter-over-quarter basis, through successive quarters of 2023 |
| Our core business is healthy and we’re rolling out new products for our resellers |
| We are well positioned in the first tier of middle-market players |
| These represent a mix of net new logos and cloud upgrades that I discussed last quarter, further reinforcing the strong appetite for telecoms to move to the cloud and shift towards more customer-centric software |
| We finished 2023 with positive momentum in all of our businesses |
| We feel very good about where we are in the fiber arc |
| Revenue for Q4 grew 21% year-over-year to $13.8 million, and gross margin grew 9.3% year-over-year to $7.9 million |
| In Q4, we saw slight gains across all our top level metrics, including domains undermanagement and transactions |
| We would have seen a strong and growing fiber footprint, a fascinating evolution in the structural separation between ownership of infrastructure and operating an ISP |
| If we would have sat down in 2014 and shown ourselves the future in 2024, we would have been very pleased |
| However, the margins from these two new opportunities are significantly higher than our typical domain name margins |
| A year ago, and at Investor Day, I shared how pleased I was with the foundation laid to generate $25 million to $30 million in revenue |
| 5%, and gross margin was up 8% year-over-year |
| By that I mean that making sure that Ting is in position to benefit from this generational transition to infrastructure purpose built for the Internet is the most important thing |
| And as a reminder, we’ve developed these new products within our existing cost structure, which means we’re able to prove the concept with investment that is invisible to investors and improve it along the way without major cost impacts |
| And importantly, Tucows Domains continues to generate cash for the Company that is being used to pay down the debt and build the runway for Tucows’ long-term growth |
| And, most importantly, we would have seen Ting as an ISP with industry-leading take rate, churn and customer satisfaction |
| Unlike MNOs, these operators are on their first replatform and have a tremendous opportunity to leapfrog the legacy software pitfalls in telecom |
| The Wavelo story is yet another chapter in a 30-year history of Tucows leveraging existing assets, competencies, and relationships in service of customer and shareholder value |
| Ting subscribers grew 26% year-over-year in the fourth quarter, taking us to over 43,000 in total |
| This was driven by robust growth from Wavelo and consistent performance of Tucows Domains, and offset by our continued investment in Ting |
| And the revenue for Tucows Domains for Q4 was up 2.6%, increasing to $61.8 million from $60.3 million in Q4 2022 |
| Our partner markets are also ramping up with 54% growth in addresses year-over-year |
| That means we are looking to strengthen our balance sheet |
| I am optimistic about the potential for these new services, and I will keep investors apprised of their progress |
| Statement |
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| Adjusted EBITDA for Q4 was $2.6 million, down 62% from $6.7 million for Q4 2022, primarily driven by our investment in the Ting business |
| Tucows Domains has been generating about $75 million in gross margin for several years, in a mature and competitive industry with limited prospects for growth |
| Adjusted EBITDA came in negative $12.4 million |
| And finally, the Corporate category had adjusted EBITDA of $1.5 million this quarter, down from $3.3 million in Q4 last year |
| Adjusted EBITDA for Ting was negative $12.4 million compared with negative $6 million in Q4 2022, as we continue to invest in our fiber network expansion |
| While we have capital to take us through the next leg of our build, I have been clear that this level of EBITDA losses and this level of debt are not acceptable |
| There was a small offset to the revenue gains of the three businesses by a decline incorporate segment revenues of 34% year-over-year, from $2.7 million in Q4 2022 to $1.8million in Q4 2023 |
| The decline was primarily driven by lower revenues from legacy mobile subscribers retained in the sale of Ting Mobile subscribers to DISH, as well as higher intercompany eliminations |
| The Q4 decline in Value-Added Services was actually a result of something we periodically do at the resellers’ request which is to move their customers from the Wholesale business to our Retail business, which shifts the associated revenues and margin from Value-Added Services to Retail |
| As a percentage of revenue, gross margin for Ting was 57% in the fourth quarter of 2023, down from 63% in Q4 of last year |
| Adjusted EBITDA for Q4 was $2.6 million, down 38% from Q3 and up 328% year-over-year |
| As I have previously stated, this number is too high |
| The net loss is primarily the result of the ongoing investment in construction of Ting's fiber networks and scaling up of the associated operations, higher network depreciation, and higher interest expenses from both higher interest rates and increased debt |
| In the quarter, Wavelo’s revenues were $9.5 million, down 13.8% from Q3 and up 113% from Q4 2022 |
| I'll note that the decline in the domains aftermarket that I covered in the last couple of quarters is no longer a factor for Value-Added Services |
| Gross margin was $9.2 million in Q4, down 12.3% from Q3 and up 142% year-over-year |
| That said, I want to be clear that we expect growth to come in much lower in 2024, as we invest in new customers and battle an increasingly competitive software market |
| We reported a net loss for the fourth quarter of 2023 of $23.4 million, or a loss of $2.14 per share, compared with a net loss of $13.5 million, or $1.25 per share, for the fourth quarter of 2022 |
| Our fiber CapEx has increased from Q3 of 2023, but at $18 million for Q4, is still lower than our spends earlier in the year |
| The decrease is primarily driven by a lower contribution from the legacy mobile base and higher intercompany eliminations |
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