Press Release FS 2026 Q1 260422.xlsx
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Tucows Inc.
Condensed Consolidated Balance Sheets
(Dollar amounts in thousands of U.S. dollars)
| March 31, 2026 | December 31, 2025 | |
|---|---|---|
| (unaudited) | (audited) | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 44,306 | $ 46,759 |
| Restricted cash | 5,360 | 5,315 |
| Accounts receivable | 27,791 | 24,494 |
| Deferred costs of fulfillment, current portion | 101,408 | 97,151 |
| Prepaid expenses and other | 21,177 | 29,375 |
| Total current assets | 200,042 | 203,094 |
| Deferred costs of fulfillment, long-term portion | 16,368 | 15,883 |
| Secured notes reserve funds | 12,272 | 12,171 |
| Property and equipment, net | 275,543 | 281,955 |
| Right of use lease asset | 70,578 | 63,315 |
| Intangible assets | 19,479 | 19,703 |
| Goodwill | 130,410 | 130,410 |
| Other assets | 4,550 | 4,378 |
| Total assets | $ 729,242 | $ 730,909 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | 33,083 | 35,272 |
| Derivative instrument liability | 251 | 75 |
| Operating lease liability, current portion | 6,382 | 5,771 |
| Contract liabilities, current portion | 135,786 | 131,581 |
| Redeemable preferred units | 142,024 | 136,963 |
| Other current liabilities | 19,577 | 20,765 |
| Total current liabilities | 337,103 | 330,427 |
| Contract liabilities, long-term portion | 22,008 | 21,354 |
| Operating lease liability, long-term portion | 64,848 | 57,823 |
| Syndicated revolver | 189,645 | 189,531 |
| Notes payable | 292,639 | 291,646 |
| Other long-term liability | 1,366 | 1,366 |
| Deferred tax liability | 2,961 | 2,962 |
| Stockholders' deficit: | ||
| Common stock - no par value, 250,000,000 shares authorized; 11,134,174 shares issued and outstanding as of March 31, 2026 and 11,111,453 shares issued and outstanding as of December 31, 2025 | 38,788 | 38,308 |
| Additional paid-in capital | 24,158 | 23,526 |
| Accumulated deficit | (244,084) | (225,977) |
| Accumulated other comprehensive loss | (190) | (57) |
| Total stockholders' deficit | (181,328) | (164,200) |
| Total liabilities and stockholders' deficit | $ 729,242 | $ 730,909 |
Tucows Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Dollar amounts in thousands of U.S. dollars)
| Three months ended March 31, | |||
|---|---|---|---|
| 2026 | 2025 | ||
| (unaudited) | |||
| Net revenues | $ 96,657 | $ 94,609 | |
| Cost of revenues: | |||
| Direct cost of revenues | 56,884 | 55,161 | |
| Network, other costs | 5,868 | 5,175 | |
| Network, depreciation and amortization | 9,775 | 10,742 | |
| Total cost of revenues | 72,527 | 71,078 | |
| Gross profit | 24,130 | 23,531 | |
| Expenses: | |||
| Sales and marketing (*) | $ 12,103 | $ 10,991 | |
| Technical operations and development (*) | 4,431 | 4,407 | |
| General and administrative (*) | 9,828 | 9,242 | |
| Loss on disposition of property and equipment | 876 | - | |
| Depreciation and amortization | 1,199 | 924 | |
| Total expenses | 28,437 | 25,564 | |
| Loss from operations | (4,307) | (2,033) | |
| Other income (expenses): | |||
| Interest expense, net | (13,865) | (13,613) | |
| Liabilities and Stockholders' Equity | 2,457 | 2,679 | |
| Total other income (expenses) | (11,408) | (10,934) | |
| Loss before provision for income taxes | (15,715) | (12,967) | |
| Provision (recovery) for income taxes | 2,392 | 2,166 | |
| Net loss for the period | (18,107) | (15,133) | |
| Other comprehensive income (loss), net of tax | |||
| Unrealized income (loss) on hedging activities | (213) | 42 | |
| Net amount reclassified to earnings | 80 | 558 | |
| Other comprehensive income (loss) net of tax expense (recovery) | (133) | 600 | |
| Comprehensive loss, net of tax for the period | $ (18,240) | $ (14,533) | |
| Basic and diluted loss per common share | $ (1.63) | $ (1.37) | |
| Shares used in computing basic and diluted loss per common share | 11,124,592 | 11,032,086 | |
| (*) Stock-based compensation has been included in expenses as follows: | |||
| Network expenses | $ 65 | 101 | |
| Sales and marketing | $ 243 | 309 | |
| Technical operations and development | $ 106 | 215 | |
| General and administrative | $ 680 | 880 |
Tucows Inc.
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands of U.S. dollars)
| Three months ended March 31, | |||
|---|---|---|---|
| 2026 | 2025 | ||
| (unaudited) | |||
| Cash provided by: | |||
| Operating activities: | |||
| Net loss for the period | $ | (18,107) | $ (15,133) |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| - Depreciation and amortization | 10,974 | 11,666 | |
| - Amortization of debt discount and issuance costs | 1,153 | 1,167 | |
| - Loss on disposal of assets | 876 | - | |
| - Impairment of property and equipment | 280 | 204 | |
| - Deferred income taxes (recovery) | 43 | (191) | |
| - Accretion of redeemable preferred units | 4,989 | - | |
| - Stock-based compensation expense | 1,094 | 1,505 | |
| Change in non-cash operating working capital | |||
| - Accounts receivable | (3,297) | (3,242) | |
| - Prepaid expenses and deposits | 6,763 | 875 | |
| - Deferred costs of fulfillment | (4,742) | (4,017) | |
| - Accounts payable & accrued liabilities | (1,600) | (10,622) | |
| - Contract liabilities | 4,859 | 5,538 | |
| - Other operating assets and liabilities | 239 | 999 | |
| Net cash provided by (used in) operating activities | 3,524 | (11,251) | |
| Financing activities: | |||
| - Repayment of syndicated revolver | - | (2,500) | |
| Investing activities: | |||
| - Proceeds on disposal of property and equipment | 578 | 966 | |
| - Additions to property and equipment | (5,528) | (5,437) | |
| - Acquisition of intangible assets | (881) | - | |
| Net cash provided by (used in) investing activities | (5,831) | (4,471) | |
| (Decrease) increase in cash and cash equivalents | (2,307) | (18,222) | |
| Cash and cash equivalents, restricted cash, and restricted cash equivalents beginning of period | 64,245 | 73,238 | |
| Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period | $ | 61,938 | $ 55,016 |
| Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents: | |||
| - Cash and cash equivalents | 44,306 | 38,076 | |
| - Restricted cash included in funds held for trustee | 5,360 | 5,116 | |
| - Restricted cash included in secured notes reserve funds receivable | 12,272 | 11,824 | |
| Total Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period | 61,938 | 55,016 | |
| Supplemental cash flow information: | |||
| - Interest paid | $ | 8,380 | 18,332 |
| - Income taxes paid, net | $ | 4,008 | 1,299 |
| Supplementary disclosure of non-cash investing and financing activities: | |||
| Property and equipment acquired during the period not yet paid for | $ | 941 | 1,435 |
| Tucows Inc. Reconciliation of Loss before Provision for Income Taxes to Adjusted EBITDA | |
|---|---|
| Three months ended March 31, (unaudited) | |
| Net Loss for the period | $ (18,107) |
| Less: | |
| Provision (recovery) for income taxes | 2,392 |
| Depreciation of property and equipment | 9,871 |
| Impairment of property and equipment | 280 |
| Loss (gain) on disposition of property and equipment | 876 |
| Amortization of intangible assets | 1,103 |
| Interest expense (net) | 13,865 |
| Stock-based compensation | 1,094 |
| Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities | 194 |
| Acquisition and other costs¹ | 99 |
| Adjusted EBITDA | $ 11,667 |
1Acquisition and other costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.