Tucows Inc. Q2 FY2026 earnings call

• Consolidated Financial Performance

  • Consolidated net revenue for Q2 2026 increased 2% YoY to $100.6 million, and increased 4% sequentially from Q1 2026.
  • Gross profit was $25.8 million, up 17% YoY and up 7% sequentially from Q1 2026.
  • Adjusted EBITDA was $12.3 million, down 2% YoY but up 5% sequentially from Q1 2026.
  • The company delivered its second consecutive quarter of positive operating cash flow: $1.9 million in Q2, bringing year-to-date cash flow to $5.5 million (compared to negative $4.7 million in the first half of 2025).
  • GAAP net loss was $20.5 million ($1.84 per share), up from a $15.6 million loss ($1.41 per share) YoY; non-GAAP adjusted net loss was $17.5 million ($1.57 per share), up from a $16.3 million loss ($1.47 per share) YoY.

• Balance Sheet and Capital Structure Improvements

  • The company amended and extended its syndicated credit facility, extending the maturity of most lender commitments from September 2027 to July 2029, with key pricing and covenants largely unchanged.
  • All outstanding Series A preferred units in Ting Fiber were retired, removing a $150 million compounding obligation including cumulative dividends, eliminating a significant financial overhang for Ting.
  • The company acquired the Ting-owned data center used by Domains and Wavelow, protecting critical infrastructure.
  • Ended Q2 with $60.2 million in total cash and restricted cash; the company remained in compliance with all financial covenants, with a leverage ratio of 3.72x and interest coverage of 3.75x.

• Operational Progress by Business

  • 2COWS Domains: The large reseller domain insourcing process has mostly concluded, and management expects domain volumes to stabilize going forward. Sequential improvement in revenue, gross margin, and adjusted EBITDA was driven by strong expiry sales and growing contribution from higher-margin registry services.
  • Wavelow: Management is investing selectively in go-to-market capacity to support new customer growth, with an active sales pipeline across global telecommunication markets. Further investment will be contingent on measurable progress in pipeline conversion.
  • Ting: Delivered substantial operational improvement, with positive adjusted EBITDA for the first time since segment reporting, driven by subscriber growth, construction project revenue, and continued cost discipline. Management continues to review individual market economics and will adjust operations as needed.

• Strategic Priorities

  • The company is undergoing a 2026 transition to build a simpler, more focused, more capital-efficient business, centered on high recurring revenue, scalable economics, lean operations, and disciplined capital allocation.
  • The Ting strategic review process remains a top priority for management and the board; while progress is slower than initially expected, management is working to resolve interdependencies to enable an efficient transaction that maximizes shareholder value.

1. 2COWS Domains: Total Q2 2026 revenue was $65 million, a 4% year-over-year (YoY) decline from $67.6 million in Q2 2025. Revenue contribution to consolidated net revenue is 64.6%. Wholesale revenue was $55.1 million (down 4% YoY), with domain services revenue of $48.8 million and value-added services revenue of $6.3 million (up 9% YoY). Retail revenue was $9.9 million (down 4% YoY from $10.3 million). Domains under management declined to 21.3 million from 24 million YoY. Gross profit after network expenses was essentially stable at $19.3 million. Adjusted EBITDA was $11.9 million, down from $12.5 million YoY. This segment is the company's largest and most predictable adjusted EBITDA contributor.

2. Wavelow: Total Q2 2026 revenue was $11.8 million, a 7% YoY decline from $12.7 million, with a 11.7% revenue contribution to consolidated net revenue. Gross profit after network expenses was $6.6 million, down from $8.6 million YoY. Adjusted EBITDA was $2.8 million, down from $5.4 million YoY. The decline reflects lower recognized bundled professional services revenue and increased investment in go-to-market capacity.

3. Ting: Total Q2 2026 revenue was $21.6 million, a 32% YoY increase from $16.4 million, with a 21.5% revenue contribution to consolidated net revenue. Fiber Internet Services revenue was $17.5 million (driven by subscriber growth), and $4.1 million in construction services revenue was recognized for the Laguna Woods Village HOA project. Internet subscribers under management reached 60,500, an 8,500 increase YoY, with 3,700 net subscriber additions in Q2. Gross profit after network expenses was $2.5 million, up from a negative $3.2 million YoY. Adjusted EBITDA was positive $1.5 million, an improvement from a $3.7 million loss YoY and a $0.4 million loss in Q1 2026. This is Ting's first positive adjusted EBITDA quarter since segment reporting began.

4. Corporate: Total Q2 2026 revenue was $2.2 million, up from $1.8 million YoY, with a 2.2% revenue contribution to consolidated net revenue. Gross profit was negative $2.5 million, a slight improvement from negative $2.6 million YoY. Adjusted EBITDA was negative $3.9 million, down from negative $1.7 million YoY, driven by higher professional fees and increased losses from the legacy mobile business.

There was no explicit full-year financial guidance provided in this pre-recorded commentary. Key forward-looking stances from management include:

• Domain volumes are expected to stabilize after the completion of the large reseller insourcing process.
• Resolution of the legacy mobile business's poor profitability is a core focus for the third quarter of 2026, and management is actively pursuing a solution to its unfavorable economics.
• Further investment in Wavelow's go-to-market activities is contingent on demonstrated progress in converting the qualified sales pipeline to recurring revenue.
• Management expects higher professional fees (linked to strategic initiatives) and ongoing legacy mobile obligations to continue acting as headwinds to corporate segment results for the near term.

• Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from expectations, with detailed risk factors disclosed in the company's SEC filings (latest 10-K and 10-Q).
  • Wavelow's new customer conversion from the sales pipeline can be uneven, particularly for large telecommunications provider clients, creating uncertainty around near-term revenue growth.
  • The Ting strategic transaction process is moving slower than initially expected due to unanticipated interdependencies that must be resolved, creating uncertainty around the timing and outcome of the process.
  • The legacy mobile business has persistent unfavorable per-subscriber economics, continued mixed performance, and was hit by $1.3 million in unexpected incremental long-distance charges in Q2 2026 from an isolated incident of unauthorized traffic, acting as a ongoing headwind to corporate results.
  • General and administrative expenses have increased YoY driven by higher professional fees for strategic initiatives, creating downward pressure on profitability in the near term.

This pre-recorded management commentary did not include a live question and answer section. Shareholders and analysts are invited to submit questions via email by August 13, 2026, and management will publish a recorded response and transcript to the 2CAS website by August 19, 2026.