Tucows Inc. (NASDAQ: TCX) (TSX: TC) reported its financial results for the fourth quarter ended December 31, 2022. All figures are in U.S. dollars.

“Our fourth quarter results show Tucows weathering macroeconomic uncertainty and capital constraints with each business unit performing in line with its stage of business growth and guidance expectations. We continue to manage our businesses for the long term; investing in each one as appropriate to position them to generate stable, recurring revenues, meet future opportunities, and be operationally resilient,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “We are pleased with the progress of the nascent Wavelo business, the growth trajectory of Ting, as evidenced by year over year revenue and margin growth, and the stability of our flagship Domains business.”

Net revenue for the fourth quarter of 2022 decreased 4.3% to $79 million from $82.5 million for the fourth quarter of 2021. The decrease was primarily the result of reduced one-time professional services revenues and as well as a revenue recognition impact  related to the DISH agreement, both impacting Wavelo revenues that offset the growth of revenue from Ting.

Gross profit for the fourth quarter of 2022 decreased 30.8% to $17.0 million from $24.6 million for the fourth quarter of 2021. The decrease in Gross profit was driven by lower one-time high margin professional services and a revenue recognition impact related to the DISH agreement in Wavelo as well as increased network depreciation expenses. The decrease in Gross profit was partially offset by growth in Ting’s gross margin.

Net loss for the fourth quarter of 2022 was $13.4 million, or a loss of $1.25 per share, compared with net loss of $2.0 million, or $0.18 per share, for the fourth quarter of 2021 with the loss being the result of accelerated build of our Ting Internet Services fiber network and ramp up of operations, lower Wavelo contribution, higher effective tax rate as well as higher interest and stock based compensation expenses and higher depreciation.

Adjusted EBITDA¹ for the fourth quarter of 2022 decreased 47% to $6.7 million from $12.7 million for the fourth quarter of 2021. The decrease in adjusted EBITDA¹ was primarily related to reduced contributions from Wavelo and Ting, which have both made significant investments to support future growth and lower Wavelo gross profit. To a lesser extent the decrease in adjusted EBITDA¹ contributions also related to the normalization of renewal rates in Tucows Domains to pre-COVID levels.

Cash and cash equivalents at the end of the fourth quarter of 2022 were $23.5 million compared with $30.5 million at the end of the third quarter of 2022 and $9.1 million at the end of the fourth quarter of 2021.

Tucows Announces $40 Million Stock Buyback Program

Tucows Inc. (NASDAQ: TCX, TSX: TC) announced that its Board of Directors has approved a stock buyback program to repurchase, from time to time if and as appropriate, up to $40 million of its common stock in the open market.

The new $40 million buyback program will commence February 10, 2023 and will terminate on or before February 9, 2024. Purchases for the new buyback program will be made exclusively through the facilities of the Nasdaq Capital Market. The previously announced $40 million buyback program, which commenced February 11, 2022, has been terminated.

Summary Financial Results
(In Thousands of US Dollars, Except Per Share Data)

Summary of Revenues, Gross Profit and Adjusted EBITDA
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