Executive Summary

Q3 delivered solid YoY improvement: revenue $92.3M (+6.1% YoY), gross profit $22.2M (+32.4% YoY), and adjusted EBITDA $8.7M (+94% YoY), while net loss narrowed modestly to $22.3M ($2.03 loss per share) .
Ting pivoted to “operate and load” with a second workforce reduction (~42% of Ting; ~17% of Tucows) to remove ~$22M of annual cash OpEx; Ting revenue grew 19% YoY to $15.3M, gross margin rose 38% YoY to $11.0M, and adjusted EBITDA loss improved to -$5.1M; management targets Ting around EBITDA breakeven in 2025 .
Wavelo remained resilient with $10.1M revenue and ~99% gross margin; Domains posted a steady quarter with $64.7M revenue, $19.8M gross margin, and $11.5M adjusted EBITDA; Domains renewal rate held at 76% .
Balance sheet flexibility improved: cash and restricted cash totaled $91.1M at quarter-end; quarterly repayments on the syndicated loan continued; first debt maturity in 2028; capital deployment shifted to success-based capex ($8.2M in Q3 vs just over $12M in Q2) .

What Went Well and What Went Wrong

What Went Well
- Margin expansion across businesses: consolidated gross margin rose to 24% (from 19% in Q3’23); Ting gross margin rose to 72% (from 62%); Wavelo GM to 99% (from 95%); Domains GM to 31% (from 30%) .
- Domains durability: revenue $64.7M (+6% YoY), GM $19.8M (+8% YoY), adjusted EBITDA $11.5M (+6% YoY); renewal rate at 76%, above industry average; “expiry stream” nonrecurring sales aided value-added services .
- Cost discipline and deleveraging: second restructuring to cut ~$22M of cash OpEx; continued syndicated debt repayment, with cash + restricted cash at $91.1M .
- Management quote: “We laid off over 40% of the Ting workforce… [to] move Ting to a sustainable cost structure with positive and growing adjusted EBITDA. The plan removes around $22 million in cash operating expenses.” .
What Went Wrong
- Ting financing and scale headwinds: unsuccessful search for a long-term common equity partner; sector mid-market equity remains tight; $40M annual Ting interest persists before success-based capex in 2025 .
- Wavelo YoY pressure: revenue and gross margin down YoY versus post-migration peak/PS lumpy comps; adjusted EBITDA down YoY on fewer one-time services and subscriber mix at EchoStar/Boost .
- Continued GAAP losses: Q3 net loss of $22.3M (vs $22.8M loss in Q3’23) despite sizable non-GAAP EBITDA improvement; depreciation and interest remain material drags .

Financial Results

Overall performance and comparisons

Metric	Q3 2023	Q2 2024	Q3 2024
Revenue ($M)	$87.0	$89.4	$92.3
Gross Profit ($M)	$16.8	$20.8	$22.2
Net Income (Loss) ($M)	$(22.8)	$(18.6)	$(22.3)
Diluted EPS ($)	$(2.09)	$(1.70)	$(2.03)
Adjusted EBITDA ($M)	$4.5	$9.2	$8.7
Cash + Restricted Cash ($M, end of period)	$122.4	$52.2	$91.1

Segment revenue

Segment Revenue ($M)	Q3 2023	Q2 2024	Q3 2024
Ting Internet Services	$12.9	$14.6	$15.3
Wavelo Platform Services	$11.1	$10.5	$10.1
Domains – Wholesale	$51.9	$53.0	$55.0
Domains – Retail	$9.2	$9.3	$9.7
Corporate (Mobile & Eliminations)	$2.0	$2.0	$2.2
Total	$87.0	$89.4	$92.3

Segment gross margin

Segment Gross Margin ($M)	Q3 2023	Q2 2024	Q3 2024
Ting Internet Services	$8.0	$9.8	$11.0
Wavelo Platform Services	$10.5	$10.2	$10.0
Domains – Total	$18.4	$18.9	$19.8
Corporate (Mobile & Eliminations)	$(0.6)	$(0.8)	$(1.1)
Network costs (Depreciation/Other/Amort/Impairment)	$(19.5)	$(17.3)	$(17.5)
Total Gross Profit	$16.8	$20.8	$22.2

Segment adjusted EBITDA

Segment Adj. EBITDA ($M)	Q3 2023	Q2 2024	Q3 2024
Ting Internet Services	$(12.2)	$(6.4)	$(5.1)
Wavelo Platform Services	$4.2	$3.9	$3.4
Domains – Total	$10.9	$11.2	$11.5
Corporate (Mobile & Eliminations)	$1.5	$0.5	$(1.2)
Total Adj. EBITDA	$4.5	$9.2	$8.7

Key KPIs

KPI	Q2 2024	Q3 2024
Ting net subscriber adds (period)	+2,100	+1,400
Ting subscribers (approx.)	>40,000	~50,000
Ting owned serviceable addresses	120,300	132,000
Total serviceable addresses (incl. partners)	164,500	172,600
Domains renewal rate	76%	76%
Ting capex (quarter)	just over $12M	$8.2M

Notes on non-GAAP: Adjusted EBITDA excludes depreciation, impairment, amortization, income taxes, net interest, stock-based comp, FX revaluation, acquisition/transition costs, and certain other non-cash or non-recurring items; reconciliations provided in releases .

Estimates comparison: Wall Street consensus (S&P Global) for Q3’24 was unavailable at time of analysis due to data limits; therefore, no “vs. estimates” variances are shown. S&P Global is our preferred source for consensus.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Ting adjusted EBITDA	FY 2025	N/A	“Around EBITDA breakeven in 2025”	New quantitative target (breakeven)
Tucows (consolidated) adjusted EBITDA	FY 2024	N/A	“On track to approximately double in 2024 vs $15.5M in 2023”	Implicit raise/tightening vs no prior consolidated guide
Tucows ex‑Ting adjusted EBITDA (Domains, Wavelo, Corporate)	FY 2024	$53–$57M (Domains $43M, Wavelo $8–$10M, Corporate $2–$4M)	Reiterated tracking to plan (latest commentary consistent with doubling consolidated adj. EBITDA)	Maintained
Ting operating expenses	Forward	N/A	Remove ~$22M annual cash OpEx via restructuring	New cost reduction
Ting capex cadence	Forward	Mixed (growth + build)	Pivot to success‑based capex; Q3 capex cut to $8.2M from just over $12M in Q2	Lower, success-based focus
Leverage/debt	Ongoing	Continued deleveraging	Continued quarterly payments; first debt maturity 2028	Maintained plan

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
Ting strategy and funding	Discussed need to right-size operations, capex discipline; ongoing capitalization work	Structural pivot: halt new market expansion, remove ~$22M cash OpEx, focus on penetration/ARPU/churn; EBITDA breakeven target 2025	Sharper pivot to operate-and-load; cost-out executed
ABS financing environment	Highlighted robust demand; comparables (Ziply, Frontier, ALLO)	Cash + restricted cash $91.1M; continued ABS capacity as footprint loads; first maturity 2028	Supportive backdrop; liquidity improved
Wavelo platform & AI enablement	Launched product catalog; modular BSS vision; shift to platform revenue	Reiterated thesis: AI value requires fixing core billing/provisioning; ~99% GM; pipeline moving upmarket	Strategic positioning sustained; focus on larger deals
Domains performance	Steady growth, strong retail margins, 76% renewal	7th consecutive revenue growth quarter; expiry stream strength; 76% renewal	Stable, cash-generative
Macro/industry fiber deals	Emphasized financialization (T-Mobile/EQT, KKR/Metronet)	Continued commentary on mid-market equity scarcity; pivot aligns with industry structure	Equity tight for mid-market; operating focus favored

Management Commentary

“We laid off over 40% of the Ting workforce… [to] move Ting to a sustainable cost structure with positive and growing adjusted EBITDA. The plan removes around $22 million in cash operating expenses…” .
“We will stop all expansion into new markets and take a more conservative approach to capital deployment, focusing on success-based CapEx… and partner addresses…” .
“With the changes implemented… we expect Ting to be around EBITDA breakeven in 2025… we have roughly $40 million a year in interest payments… every customer we add requires success-based CapEx.” .
“Consolidated revenue up 6.1% to $92.3 million… gross profit up 32.4%… adjusted EBITDA up 94%...” .
“Wavelo… ~99% gross margin… our platform is uniquely positioned to help solve enterprise-grade problems at scale.” .
“Domains… revenue $64.7 million, gross margin $19.8 million… renewal rate 76%… expiry stream strength.” .

Q&A Highlights

No live Q&A; investors invited to submit questions by Nov 14 with a recorded response posted on Nov 26 (company site) .
Areas likely to draw questions based on remarks: Ting breakeven path and success-based capex pace; interest burden (~$40M/yr) and deleveraging cadence; Wavelo pipeline conversion timing; sustainability of Domains expiry-driven value-added services .
Prior Q&A context (Q1): ex‑Ting 2024 adjusted EBITDA guidance $53–$57M; Ting penetration in older markets meeting 50% target; drivers of Ting EBITDA improvement (workforce reduction, marketing normalization) .

Estimates Context

Wall Street consensus (S&P Global) for Q3’24 was unavailable at the time of analysis due to data limits. We therefore do not present “vs. consensus” variances. S&P Global is our default source for consensus estimates.

Key Takeaways for Investors

Structural pivot at Ting is the catalyst: halting footprint expansion, removing ~$22M cash OpEx, and focusing on loading existing and partner networks should drive EBITDA inflection, with a stated target of around breakeven in 2025 .
Quality of earnings improving: significant YoY expansion in consolidated gross profit and adjusted EBITDA, led by Ting margin gains and steady Domains, even as GAAP losses persist due to depreciation/interest .
Liquidity runway and deleveraging: cash + restricted cash at $91.1M; quarterly paydown continues; first debt maturity in 2028; capex shifted to success-based, reducing cash burn .
Wavelo remains a strategic asset: high gross margin (~99%), modular stack positioned for AI-enabled telco operations; near-term revenue optics can be lumpy due to prior PS recognition timing, but platform fundamentals are intact .
Domains provides ballast: 7th consecutive quarter of revenue growth, healthy renewal rate (76%), and steady adjusted EBITDA contribution, supporting deleveraging and capex moderation elsewhere .
Near-term trading: stock likely sensitive to evidence of Ting subscriber loading, capex discipline, and debt repayment cadence; any large Wavelo logo wins could re-rate growth expectations .
Medium-term thesis: execution on the “operate and load” strategy at Ting, continued cash generation from Domains, and upmarket Wavelo wins are the primary drivers to narrow GAAP losses and improve free cash flow over 2025+ .

TUCOWS INC /PA/ (TCX)·Q3 2024 Earnings Summary