Tucows Loss Narrows Y/Y in Q4 on Lower Impairment Charges

Shares of Tucows Inc. TCX have gained 0.7% since reporting results for the fourth quarter of 2025. This compares to the S&P 500 index’s 1.4% decline over the same time frame. Over the past month, however, the stock has lost 24.2% compared with the S&P 500’s 1.9% fall, indicating more pronounced volatility in TCX relative to the broader market.

Earnings & Revenue Performance

Tucows reported fourth-quarter 2025 net revenues of $98.7 million, up 6% year over year from $93.1 million. Gross profit increased 14% to $24.1 million from $21.2 million in the prior-year quarter. The company posted a net loss of $22 million, or $1.98 per share, compared with a net loss of $42.5 million, or $3.86 per share, a year earlier.

Adjusted EBITDA for the quarter was $11.1 million, down 14% from $12.8 million in the year-ago period. For 2025, revenues rose 8% to $390.3 million, gross profit climbed 13% to $94 million and adjusted EBITDA increased 45% to $50.6 million.

Tucows Inc. Price, Consensus and EPS Surprise

 

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

Segment Performance & Operating Metrics

The Domains and Wavelo Services segment generated $78.1 million in fourth-quarter revenues, up from $75.6 million a year ago. Within Tucows Domain Services, total revenues increased to $66.4 million from $65.7 million, while segment gross profit rose to $19.2 million from $18.4 million, and adjusted EBITDA improved to $12.5 million from $11.6 million. Management credited the performance partly to strong growth in value-added services and Expiry Stream sales, which contributed to an increase in higher-margin revenues.

Wavelo Services posted revenues of $11.7 million, up from $9.9 million in the prior-year quarter. Gross profit increased to $6.6 million from $6.1 million, though adjusted EBITDA slipped to $3.4 million from $3.7 million, reflecting higher operating investments. Management noted that Wavelo delivered double-digit growth across revenues, gross profit and adjusted EBITDA for the full year and exceeded guidance.

Ting Internet Services reported quarterly revenues of $18.5 million, up from $15.7 million a year ago. Gross profit improved to $1.6 million from a negative $1.2 million, and adjusted EBITDA loss narrowed to $0.9 million from $1.5 million. Despite top-line growth and improving profitability, management acknowledged that Ting finished 2025 below guidance, with flat year-over-year gross profit due to mix shifts between partner and owned markets.

Operating metrics show Domains under management at 22.3 million in the latest quarter, compared with 24.5 million in the year-ago period. Ting Internet subscribers under management increased to 51.9 thousand from 50.7 thousand a year earlier.

Management Commentary & Strategic Direction

CEO David Woroch characterized 2025 as a strong execution year, citing improved profitability and adjusted EBITDA that exceeded annual guidance. He emphasized continued strength in Domains and Wavelo, and highlighted a focus on operational and capital efficiency initiatives, alongside an ongoing strategic process for Ting.

Management described Wavelo’s year as its best yet, supported by customer renewals and disciplined investment, while noting modest sales and marketing increases heading into 2026. For Domains, the company reported growth across revenues, gross profit and adjusted EBITDA, with registry services and Expiry Stream contributing to margin expansion.

Factors Influencing Results

Fourth-quarter adjusted EBITDA declined year over year primarily due to obligations associated with the legacy mobile business. Elevated professional fees and mobile commitments also weighed on corporate-level profitability. Meanwhile, a favorable mix in Domains, lower Wavelo cost of revenues and reduced network expenses at Ting supported gross profit growth.

Cash and restricted cash totaled $64.2 million at the quarter end, down from $73.2 million a year earlier, as operating cash flow remained negative in the quarter.

Guidance

For 2026, excluding Ting, management expects Tucows Domains to deliver adjusted EBITDA of $47-$49 million and Wavelo to generate $14.5-$15.5 million. Corporate adjusted EBITDA is projected at negative $6 million to negative $9 million, largely reflecting legacy mobile obligations. Combined, this implies consolidated adjusted EBITDA of $52.5 million to $58.5 million for 2026, excluding Ting.

Other Developments

Tucows is continuing a strategic process to divest Ting, stating that it is not the best long-term owner of the business and that regaining flexibility would enable self-funded growth and deleveraging. Management indicated that it would provide further updates as more definitive information becomes available.

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