Tucows Q2 Loss Narrows Y/Y on 10% Revenue Gain, Segment Growth

Shares of Tucows Inc. TCX have risen 12.7% since reporting second-quarter 2025 results, outpacing the S&P 500 index’s 0.7% growth. However, over the past month, the stock has fallen 8.4%, while the S&P 500 has advanced 2.3%. This divergence reflects investor enthusiasm immediately after the earnings release, followed by a period of relative underperformance.

Tucows posted a 10% increase in net revenues to $98.5 million for second-quarter 2025 from $89.4 million in second-quarter 2024. Gross profit climbed 6% to $22.1 million from $20.8 million, driven by margin expansion in the Wavelo Platform and Tucows Domains segments, partly offset by a one-time $2.7-million non-cash lease expense at Ting.

The net loss narrowed to $15.6 million, or $1.41 per share, from $18.6 million, or $1.70 per share, a year earlier. Adjusted EPS improved to a loss of $1.47 from a loss of $1.63 in the year-ago period. Adjusted EBITDA jumped 37% to $12.6 million from $9.2 million, reflecting broad-based revenue growth, Ting’s pivot to a capital-light model and cost discipline across the company.

Tucows Inc. Price, Consensus and EPS Surprise

 

Tucows Inc. price-consensus-eps-surprise-chart | Tucows Inc. Quote

Other Key Business Metrics

Ting Internet Services: Revenues from this segment rose 12% year over year to $16.4 million, fueled by modest ARPU gains, higher enterprise revenues, and an 8% increase in subscribers to 52,100. Excluding the one-time lease adjustment, the gross margin improved from $9.8 million to $10.4 million, while adjusted EBITDA loss narrowed sharply to $0.6 million from $6.4 million a year earlier. The company also reported 0.4 thousand net subscriber additions in the quarter and a shift of 1,679 addresses from owned to partner infrastructure following an asset sale.

Wavelo Platform Services: This segment delivered its best quarter since inception, with revenues rising 20.5% year over year to $12.7 million and the gross margin increasing 23.6% to $12.6 million. Adjusted EBITDA climbed 37% to $5.4 million. Growth was driven by existing customer expansion, the new EchoStar rate card, and a focus on larger Tier 1 and Tier 2 opportunities, while deprioritizing smaller, low-margin clients.

Tucows Domains: The segment’s revenues rose 8% year over year to $67.6 million, with wholesale up 8% to $57.3 million and retail up 10% to $10.3 million. The gross margin expanded 14% to $21.6 million, aided by higher-margin value-added services such as the Expiry Stream. Adjusted EBITDA increased 12% to $12.5 million. While domains under management declined 2% to 24 million and transactions fell 3%, the renewal rate of 75% remained above the industry average.

Management Commentary

CEO Elliot Noss highlighted the company’s progress toward its $47-million full-year adjusted EBITDA target, noting that the results for the first six months of 2025 are slightly ahead of schedule. Management emphasized Ting Internet’s operational transformation, Wavelo Platform’s disciplined growth strategy, and Tucows Domains’ steady performance, coupled with strategic wins such as the Radix contract. The shift toward partner infrastructure in Ting Internet markets was framed as a deliberate move to unlock capital efficiency while maintaining ISP relationships.

Factors Influencing the Headline Numbers

The quarter’s performance benefited from strong revenue contributions across all segments, with Wavelo Platform and Tucows Domains delivering notable margin expansion. Cost discipline, AI-driven efficiency gains, and Ting Internet’s move to a capital-light model provided additional uplift to profitability. Offsetting these positives was the one-time lease accounting adjustment at Ting Internet, which temporarily reduced its gross margin by $2.7 million.

Guidance

Tucows reiterated confidence in achieving its 2025 adjusted EBITDA guidance of $47 million, supported by ongoing operational improvements, targeted marketing initiatives in Ting and continued growth in Wavelo and Domain Services.

Other Developments

In the second quarter, Ting Internet sold non-strategic fiber network assets in Arizona, and parts of its Cedar footprint in Colorado and New Mexico for more than $15 million across three transactions. These divestitures align with the company’s strategy to transition from building networks to operating as a pure-play ISP, while reallocating capital toward higher-return opportunities.

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