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Tucows Inc (TCX)
NASDAQ:TCX
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Tucows
(NASDAQ:TCX)
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Rating:46Neutral
Price Target:
$20.50
▼(-7.32% Downside)
Tucows' overall stock score is primarily impacted by its weak financial performance, characterized by negative profitability and cash flow issues. Technical analysis provides some support with neutral momentum indicators, but poor valuation metrics further weigh down the score. The absence of earnings call and corporate events data means these factors do not influence the score.
Positive Factors
Revenue Growth
Consistent revenue growth over four quarters indicates strong market demand and effective business strategies, supporting long-term expansion.
Debt Reduction
Reducing debt over consecutive quarters enhances financial stability and flexibility, allowing for strategic investments and growth.
Strategic Shift
Shifting to a capital-light model can improve margins and scalability, positioning Tucows for sustainable long-term growth.
Negative Factors
High Leverage
High leverage can strain financial resources and limit strategic options, posing risks if market conditions worsen.
Negative Cash Flow
Negative cash flow challenges operational sustainability and may hinder the company's ability to invest in growth opportunities.
Ting's Profitability Challenges
Continued losses in Ting's segment highlight operational inefficiencies and competitive pressures, impacting overall profitability.
Tucows (TCX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$254.39M
Dividend YieldN/A
Average Volume (3M)24.53K
Price to Earnings (P/E)―
Beta (1Y)0.78
Revenue Growth8.03%
EPS Growth-5.09%
CountryUS
Employees765
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-1.42
Shares Outstanding11,103,919
10 Day Avg. Volume37,560
30 Day Avg. Volume24,532
Financial Highlights & Ratios
PEG Ratio-0.13
Price to Book (P/B)-1.97
Price to Sales (P/S)0.52
P/FCF Ratio-2.47
Enterprise Value/Market Cap3.20
Enterprise Value/Revenue2.11
Enterprise Value/Gross Profit7.95
Enterprise Value/Ebitda45.05
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Tucows Business Overview & Revenue Model
Company DescriptionTucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in Canada, the United States, and Europe. It operates through three segments: Fiber Internet Services, Mobile Services, and Domain Services. The Fiber Internet Services segment provides fixed high-speed Internet access services to individuals and small businesses primarily through the Ting website, and other billing solutions to small internet service providers. The Mobile Services segment offers mobile phones and retail telephony services; and professional services, including implementation, training, consulting, and software development and modification services, as well as operates Mobile Services Enabler platform that provides network access, provisioning, and billing services. The Domain Services segment provides wholesale and retail domain name registration services; portfolio services; and value-added services, such as hosted email, Internet security services, Internet hosting, WHOIS privacy, publishing tools, and other value-added services for end-users under the OpenSRS, eNom, Ascio, and Hover brands. The company was formerly known as Infonautics, Inc. and changed its name to Tucows Inc. in August 2001. Tucows Inc. was incorporated in 1992 and is headquartered in Toronto, Canada.
How the Company Makes MoneyTucows generates revenue primarily through its domain services segment, which includes domain registration, renewals, and related services such as SSL certificates and web hosting. The company operates a large-scale domain registrar platform, which allows it to earn recurring income from customers who renew their domain names annually. Additionally, Tucows earns income from its Ting mobile services, where it provides customers with pay-as-you-go mobile plans and generates revenue through a percentage of the usage charges. The company also has partnerships with various internet service providers and technology companies, enhancing its service offerings and distribution capabilities, which contribute to its overall earnings. Overall, Tucows' diversified revenue model, focusing on both domain services and mobile telecommunications, positions it well for continued growth in the digital economy.
Tucows Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Positive
Tucows presented a strong Q2 with significant revenue and EBITDA growth across its business units. Domains and Wavelo showed robust performance, while Ting made progress in subscriber growth despite an EBITDA loss influenced by a non-cash adjustment. The company successfully reduced debt and sold non-strategic assets, indicating a positive strategic shift. However, there were minor declines in domains under management and challenges in Ting's profitability and conversion metrics.Q2-2025 Updates
Positive Updates
Consolidated Top Line Growth
Tucows reported a 10% year-over-year increase in Q2 revenue, marking the fourth consecutive quarter of double-digit top line growth.
Adjusted EBITDA Increase
Adjusted EBITDA increased 37% to $12.6 million in Q2 and $26.2 million year-to-date, slightly ahead of the pace needed to achieve the full-year guidance of $47 million.
Domains Business Performance
Tucows Domains delivered an 8% increase in revenue, 14% growth in gross margin, and a 12% rise in adjusted EBITDA year-over-year.
Wavelo's Record Quarter
Wavelo achieved its best quarter since inception with a 20.5% increase in revenue to $12.7 million, a 23.6% rise in gross margin, and a 37% increase in adjusted EBITDA year-over-year.
Ting's Subscriber Growth
Ting reported a 12% increase in revenue to $16.4 million, driven by an 8% increase in subscribers.
Debt Reduction
Corporate net debt decreased for the fifth consecutive quarter to $190.3 million, with net leverage at 3.14x and interest coverage at 3.99x.
Successful Sale of Non-Strategic Assets
Tucows successfully sold non-strategic assets for $15 million in three transactions and additional assets for $7 million post-Q2, supporting the transition to a pure-play ISP.
Negative Updates
Decline in Domains Under Management
Total domains under management and transaction volumes declined modestly by 2% and 3%, respectively, due to a reseller moving a portion of its portfolio in-house.
Ting's Adjusted EBITDA Loss
Ting reported an adjusted EBITDA loss of $3.7 million for the quarter, exacerbated by a $2.7 million non-cash lease expense adjustment.
Challenges in Subscriber Conversion
Despite improvements, Ting's conversion metrics and marketing efficiency still highlight challenges in subscriber acquisition and cost management.
Company Guidance
In the second quarter of 2025, Tucows reported a 10% year-over-year increase in revenue, reaching $98.5 million, marking its fourth consecutive quarter of double-digit growth. The company's gross profit rose 6% year-over-year to $22.1 million, while adjusted EBITDA increased by 37% to $12.6 million for the quarter, and $26.2 million year-to-date, positioning the company slightly ahead of its full-year adjusted EBITDA guidance of $47 million. Tucows' net debt decreased for the fifth straight quarter to $190.3 million, resulting in a net leverage of 3.14x and an interest coverage ratio of 3.99x. The Domains segment saw an 8% revenue increase to $67.6 million, with a 14% rise in gross margin, while Wavelo achieved a 21% revenue growth to $12.7 million, with a 24% increase in gross margin. Ting's revenue grew 13% to $16.4 million, driven by an 8% increase in subscribers, although it reported an adjusted EBITDA loss of $3.7 million. The company emphasized its strategic pivot towards a capital-light, partner-focused model, with ongoing efforts to optimize marketing and reduce operational expenses.Tucows Financial Statement Overview
Summary
Tucows faces significant financial challenges, with negative profitability and cash flow metrics. High leverage and negative margins indicate potential risks, despite modest revenue growth.Income Statement
Tucows has shown a modest revenue growth rate of 1.65% TTM, but profitability metrics are concerning with negative net profit and EBIT margins. The gross profit margin is relatively stable at 23.79% TTM, indicating some ability to cover costs, but the negative EBITDA margin highlights ongoing operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals high leverage with a debt-to-equity ratio of 1.74 TTM, indicating significant reliance on debt financing. The return on equity is low at 3.04% TTM, reflecting limited profitability on shareholder investments. The equity ratio is not provided, but the high debt levels suggest potential financial instability.30
Negative
Cash Flow
Cash flow analysis shows negative operating cash flow and free cash flow TTM, with a concerning free cash flow growth rate of -33.97%. The operating cash flow to net income ratio is negative, indicating cash flow issues relative to earnings. The free cash flow to net income ratio is high at 4.10, suggesting cash flow is not supporting net income effectively.25
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 384.73M | 362.27M | 339.34M | 321.14M | 304.34M | 311.20M |
| Gross Profit | 102.23M | 83.03M | 108.86M | 78.25M | 78.29M | 85.48M |
| EBITDA | 18.04M | -1.82M | -12.19M | 26.38M | 39.88M | 38.42M |
| Net Income | -96.26M | -109.86M | -96.20M | -27.57M | 3.36M | 5.78M |
Balance Sheet | ||||||
| Total Assets | 735.49M | 758.80M | 798.43M | 664.75M | 539.60M | 451.90M |
| Cash, Cash Equivalents and Short-Term Investments | 54.08M | 56.90M | 92.69M | 23.50M | 9.11M | 8.31M |
| Total Debt | 665.98M | 513.12M | 568.29M | 256.01M | 205.75M | 132.67M |
| Total Liabilities | 879.55M | 854.10M | 788.55M | 568.09M | 424.50M | 347.20M |
| Stockholders Equity | -144.06M | -95.30M | 9.88M | 96.66M | 115.09M | 104.70M |
Cash Flow | ||||||
| Free Cash Flow | -32.58M | -76.20M | -97.35M | -117.62M | -44.31M | -8.43M |
| Operating Cash Flow | -7.95M | -19.75M | -4.77M | 19.88M | 29.64M | 36.08M |
| Investing Cash Flow | -5.06M | -56.49M | -92.58M | -137.49M | -101.98M | -53.28M |
| Financing Cash Flow | -7.33M | 44.50M | 178.84M | 132.01M | 73.14M | 5.12M |
Tucows Technical Analysis
Positive
22.12
Price Trends
20.12
Positive
19.33
Positive
18.97
Positive
Market Momentum
0.53
Negative
56.82
Neutral
85.69
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCX, the sentiment is Positive. The current price of 22.12 is above the 20-day moving average (MA) of 21.45, above the 50-day MA of 20.12, and above the 200-day MA of 18.97, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 56.82 is Neutral, neither overbought nor oversold. The STOCH value of 85.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TCX.
Tucows Risk Analysis
Tucows disclosed 36 risk factors in its most recent earnings report. Tucows reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tucows Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $34.31B | -467.52 | -3.23% | ― | 20.93% | 68.47% | |
70 Neutral | $16.06B | 81.18 | 2.96% | ― | 12.12% | ― | |
62 Neutral | $22.46B | 28.22 | ― | 0.95% | 5.47% | -0.03% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $16.85B | 21.64 | 369.45% | ― | 8.79% | -55.15% | |
60 Neutral | $37.12B | -862.92 | -2.41% | ― | 23.24% | -8.83% | |
46 Neutral | $254.39M | -2.54 | ― | ― | 8.03% | -5.09% |
* Technology Sector Average
TCX
Tucows
22.12
6.83
44.67%
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243.12
51.35
26.78%
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GoDaddy
125.60
-77.34
-38.11%
OKTA
Okta
88.42
6.73
8.24%
MDB
MongoDB
412.35
167.35
68.31%
ZS
Zscaler
226.43
43.22
23.59%
Tucows Corporate Events
Private Placements and Financing
Tucows Extends Credit Agreement with Bank of Montreal
Neutral
Sep 10, 2025
On September 8, 2025, Tucows Inc. and its subsidiaries entered into a one-year Extension Agreement with the Bank of Montreal, extending their existing Credit Agreement until September 22, 2027. The agreement maintains the revolving credit facility terms, including a $240 million commitment and the potential for a $60 million increase, while amending certain definitions related to financial covenants.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.