TCX Rises 2.2% in 6 Months on Strong Domains, Wavelo Performance

Shares of Tucows Inc. TCX have outperformed the broader market over the past six months, rising 2.2%. Meanwhile, the Zacks subindustry has declined 26.8% but the S&P 500 has returned 6.1%.

Let us take a closer look at Tucows’ fourth-quarter 2025 performance and strategic initiatives that continue to strengthen its long-term growth profile.

Q4 Earnings Snapshot

Tucows reported fourth-quarter 2025 net revenues of $98.7 million, increasing 6% year over year from $93.1 million. Gross profit rose 14% year over year to $24.1 million, supported by a favorable revenue mix, improved margins in the Domains and Wavelo businesses, and lower network expenses at Ting.

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, in the year-ago quarter. Adjusted EBITDA for the quarter was $11.1 million, declining 14% year over year due to obligations related to the legacy mobile business.

For 2025, Tucows generated revenues of $390.3 million, up 8% from 2024, while adjusted EBITDA rallied 45% year over year to $50.6 million, exceeding management’s annual guidance.

Growth in Domains & Wavelo Businesses

Tucows’ Domains and Wavelo segments continued to drive performance, generating combined revenues of $78.1 million in the fourth quarter of 2025. Within this segment, Tucows Domain Services reported revenues of $66.4 million, with gross profit increasing to $19.2 million and adjusted EBITDA rising to $12.5 million. Growth was supported by strong demand for value-added services and the high-margin Expiry Stream sales channel.

The Wavelo platform also delivered solid growth. Quarterly revenues climbed to $11.7 million from $9.9 million in the prior-year period, supported by customer renewals and favorable pricing dynamics. Gross profit rose to $6.6 million, though adjusted EBITDA slipped slightly to $3.4 million due to higher investments in sales, marketing and platform development.

The company noted that Wavelo achieved double-digit growth across revenues, gross profit and adjusted EBITDA in 2025 and exceeded its full-year guidance, reflecting increasing adoption of its cloud-based telecommunications software platform.

Ting Internet Expansion & Strategic Shift

Ting Internet, Tucows’ fiber broadband business, generated fourth-quarter revenues of $18.5 million, up from $15.7 million a year earlier. Gross profit improved to $1.6 million compared with a negative $1.2 million in the prior-year quarter, while the adjusted EBITDA loss narrowed to $0.9 million.

The company continues to evaluate strategic alternatives for the Ting segment, including a potential divestiture. Management believes Tucows may not be the best long-term owner of this capital-intensive business and that a transaction could enhance financial flexibility and enable greater investment in its core platform businesses.

At the same time, Ting remains positioned to benefit from the ongoing shift toward fiber-based broadband infrastructure in the United States, where many households still lack fiber connectivity. The expansion of fiber networks and partnerships with other infrastructure builders could support subscriber growth and revenue expansion in the segment.

Capital-Light Strategy & Platform Growth

Tucows is increasingly focusing on building a more capital-light operating model centered on scalable technology platforms. The company’s core businesses — Domains and Wavelo — generate recurring revenue streams, and benefit from strong margins and global reseller networks.

The Domains segment manages more than 21 million domain names through a global network of above 33,000 reseller customers across more than 195 countries. The company continues to expand value-added services and registry partnerships, which are expected to drive margin growth and diversify revenue sources.

Meanwhile, Wavelo offers event-driven, cloud-based telecom software designed to replace legacy billing and provisioning systems used by service providers. With the telecommunications industry undergoing rapid changes due to 5G expansion, fiber proliferation and fixed-mobile convergence, the platform is positioned to benefit from rising demand for modern telecom infrastructure software.

Outlook

For 2026, Tucows expects Tucows Domains to generate adjusted EBITDA of $47-$49 million, while Wavelo is projected to deliver adjusted EBITDA between $14.5 million and $15.5 million. Corporate adjusted EBITDA is expected between a loss of $6 million and $9 million due to legacy mobile commitments.

Overall, management believes that focusing on capital efficiency, scaling its platform businesses and optimizing its portfolio, including the potential Ting divestiture, will position Tucows for stronger long-term value creation.

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This article originally published on Zacks Investment Research (zacks.com).

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