Press Release FS 2025 Q1 250506.xlsx
Tucows Inc.
Tucows Inc.
Condensed Consolidated Balance Sheets
(Dollar amounts in thousands of U.S. dollars)
| March 31,2025(unaudited) | December 31,2024(audited) | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $38,076 | $56,903 |
| Restricted cash | 5,116 | 4,628 |
| Accounts receivable | 24,120 | 20,878 |
| Deferred costs of fulfillment, current portion | 105,081 | 101,467 |
| Prepaid expenses and other | 22,105 | 21,506 |
| Total current assets | 194,498 | 205,382 |
| Deferred costs of fulfillment, long-term portion | 15,911 | 15,508 |
| Secured notes reserve funds | 11,824 | 11,707 |
| Property and equipment, net | 322,396 | 331,049 |
| Right of use lease asset | 39,193 | 35,640 |
| Intangible assets, net | 23,550 | 24,755 |
| Goodwill | 130,410 | 130,410 |
| Other assets | 4,125 | 4,345 |
| Total assets | 741,907 | 758,796 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $28,880 | $40,236 |
| Derivative instrument liability, current portion | 479 | 1,270 |
| Operating lease liability, current portion | 5,050 | 5,150 |
| Contract Liabilities, current portion | 140,689 | 135,649 |
| Other current liabilities | 17,876 | 17,546 |
| Total current liabilities | 192,974 | 199,851 |
| Deferred revenue, long-term portion | 21,653 | 21,155 |
| Operating lease liability, long-term portion | 29,675 | 25,899 |
| Syndicated revolver | 192,078 | 194,426 |
| Notes payable | 288,639 | 287,646 |
| Redeemable preferred units | 122,184 | 122,156 |
| Deferred tax liability | 2,963 | 2,963 |
| Stockholders' deficit: | ||
| Common stock - no par value, 250,000,000 shares authorized; 11,034,947 shares issued and outstanding as of March 31,2025 and 11,014,655 shares issued and outstanding as of December 31,2023 | 37,032 | 36,581 |
| Additional paid-in capital | 20,364 | 19,241 |
| Accumulated deficit | (165,291) | (150,158) |
| Accumulated other comprehensive income (loss) | (364) | (964) |
| Total stockholders' deficit | (108,259) | (95,300) |
| Total liabilities and stockholders' deficit | $741,907 | $758,796 |
Tucows Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Dollar amounts in thousands of U.S. dollars)
| Three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | (unaudited) | |
| Net revenues | $94,609 | $87,457 | |
| Cost of revenues: | |||
| Direct cost of revenues | 55,161 | 51,794 | |
| Network, other costs | 5,175 | 7,117 | |
| Network, depreciation and amortization | 10,742 | 10,230 | |
| Total cost of revenues | 71,078 | 69,141 | |
| Gross profit | 23,531 | 18,316 | |
| Expenses: | |||
| Sales and marketing(*) | 10,991 | 18,565 | |
| Technical operations and development(*) | 4,407 | 5,016 | |
| General and administrative(*) | 9,242 | 9,818 | |
| Depreciation and amortization | 924 | 1,436 | |
| Total expenses | 25,564 | 34,835 | |
| Loss from operations | (2,033) | (16,519) | |
| Other income (expenses): | |||
| Interest expense, net | (13,613) | (11,879) | |
| Other income (expense), net | 2,679 | 3,688 | |
| Total other income (expenses) | (10,934) | (8,191) | |
| Loss before provision for income taxes | (12,967) | (24,710) | |
| Provision for income taxes | 2,166 | 1,774 | |
| Net loss for the period | (15,133) | (26,484) | |
| Other comprehensive income (loss), net of tax | |||
| Unrealized income (loss) on hedging activities | 42 | (1,126) | |
| Net amount reclassified to earnings | 558 | (169) | |
| Other comprehensive income (loss) net of tax recovery | 600 | (1,295) | |
| Comprehensive loss, net of tax for the period | $(14,533) | $(27,779) | |
| Basic and diluted loss per common share | $(1.37) | $(2.42) | |
| (*) Stock-based compensation has been included in expenses as follows: | |||
| Network expenses | $101 | $120 | |
| Sales and marketing | $309 | $539 | |
| Technical operations and development | $215 | $214 | |
| General and administrative | $880 | $1,000 |
Tucows Inc.
Consolidated Statements of Cash Flows
(Dollar amounts in thousands of U.S. dollars)
| Three months ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Cash provided by: | (unaudited) | |
| Operating activities: | ||
| Net loss for the period | $ (15,133) | $ (26,484) |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 11,666 | 11,666 |
| Amortization of debt discount and issuance costs | 1,167 | 1,067 |
| Deferred income taxes (recovery) | (191) | 385 |
| Accretion of redeemable preferred units | - | 3,755 |
| Stock-based compensation | 1,505 | 1,873 |
| Change in non-cash operating working capital: | ||
| Accounts receivable | (3,242) | 2,523 |
| Prepaid expenses and deposits | 875 | 1,245 |
| Deferred costs of fulfillment | (4,017) | (5,019) |
| Accounts payable & accrued liabilities | (10,622) | (4,341) |
| Contract liabilities | 5,538 | 7,024 |
| Other operating assets and liabilities | 1,203 | 628 |
| Net cash provided by (used in) operating activities | (11,251) | (5,678) |
| Financing activities: | ||
| Repayment of syndicated revolver | (2,500) | (5,500) |
| Net cash provided by (used in) financing activities | (2,500) | (5,500) |
| Investing activities: | ||
| Proceeds on disposal of property and equipment | 966 | - |
| Additions to property and equipment | (5,437) | (14,320) |
| Acquisition of Simply Bits | - | - |
| Acquisition of intangible assets | - | (96) |
| Net cash provided by (used in) investing activities | (4,471) | (14,416) |
| (Decrease) increase in cash and cash equivalents | (18,222) | (25,594) |
| Cash and cash equivalents, restricted cash, and restricted cash equivalents beginning of period | 73,238 | 104,978 |
| Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period | $ 55,016 | $ 79,384 |
| Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents within the interim consolidated balance sheets to the amounts shown in the interim consolidated statements of cash flows above: | ||
| Cash and cash equivalents | 38,076 | 66,590 |
| Restricted cash included in funds held for trustee | 5,116 | 4,034 |
| Restricted cash included in secured notes reserve funds | 11,824 | 8,760 |
| Total Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period | 55,016 | 79,384 |
| Supplemental cash flow information: | ||
| Interest paid | $ 18,332 | $ 9,009 |
| Income taxes paid, net | $ 1,299 | $ 695 |
| Supplementary disclosure of non-cash investing and financing activities: | ||
| Property and equipment acquired during the period not yet paid for | $ 1,435 | $ 5,945 |
Reconciliation of Loss before Provision for Income Taxes to Adjusted EBITDA (In Thousands of U.S. Dollars)
Reconciliation of Loss before Provision for Income Taxes to Adjusted EBITDA (In Thousands of U.S. Dollars)
| (in Thousands of U.S. Dollars) | Three months ended March 31, | |
|---|---|---|
| (unaudited) | 2025(unaudited) | 2024(unaudited) |
| Net Loss for the Period | $ (15,133) | $ (26,484) |
| Less: | ||
| Provision for income taxes | 2,166 | 1,774 |
| Depreciation of property and equipment | 10,460 | 9,987 |
| Impairment and loss on disposition of property and equipment | 204 | 53 |
| Amortization of intangible assets | 1,205 | 1,679 |
| Interest expense, net | 13,613 | 11,879 |
| Stock-based compensation | 1,505 | 1,873 |
| Unrealized loss(gain)on foreign exchange revaluation of foreign denominated monetary assets and liabilities | (364) | 389 |
| Acquisition and other costs ¹ | 15 | 3,051 |
| Adjusted EBITDA | $ 13,671 | $ 4,201 |
ⁱ Acquisition and other costs represent transaction-related expenses, transitional expenses, such as redundant post-acquisition expenses, primarily related to our acquisitions. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.