Press Release FS 2025 Q4 260204.xlsx

Tucows Inc.

Tucows Inc.
Condensed Consolidated Balance Sheets
(Dollar amounts in thousands of U.S. dollars)

December 31, December 31,

December 31, 2025 December 31, 2024
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 46,759 $ 56,903
Restricted cash 5,315 4,628
Accounts receivable 24,494 20,878
Deferred costs of fulfillment, current portion 97,151 101,467
Prepaid expenses and other 29,375 21,506
Total current assets 203,094 205,382
Deferred costs of fulfillment, long-term portion 15,883 15,508
Secured notes reserve funds 12,171 11,707
Property and equipment, net 281,955 331,049
Right of use lease asset 63,315 35,640
Intangible assets 19,703 24,755
Goodwill 130,410 130,410
Other assets 4,378 4,345
Total assets $ 730,909 $ 758,796
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 35,272 $ 40,236
Derivative instrument liability 75 1,270
Operating lease liability, current portion 5,771 5,150
Contract Liabilities, current portion 131,581 135,649
Redeemable preferred units, current portion 136,963 -
Other current liabilities 20,765 17,546
Total current liabilities 330,427 199,851
Contract liabilities, long-term portion 21,354 21,155
Operating lease liability, long-term portion 57,823 25,899
Syndicated revolver 189,531 194,426
Notes payable 291,646 287,646
Redeemable preferred units, long-term portion - 122,156
Other long-term liability 1,366 -
Deferred tax liability 2,962 2,963
Stockholders' deficit:
Common stock - no par value, 250,000,000 shares authorized; 11,111,453 shares issued and outstanding as of December 31, 2025 and 11,014,655 shares issued and outstanding as of December 31, 2024 38,308 36,581
Additional paid-in capital 23,526 19,241
Accumulated deficit (225,977) (150,158)
Accumulated other comprehensive loss (57) (964)
Total stockholders' deficit (164,200) (95,300)
Total liabilities and stockholders' deficit $ 730,909 $ 758,796

Tucows Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Dollar amounts in thousands of U.S. dollars)

Three months ended December 31, 2025 Twelve months ended December 31, 2025
(unaudited) (unaudited)
$ 98,670 $ 93,098 $ 390,300 $362,275
Net revenues $ 98,670 $ 93,098 $ 390,300 $362,275
Cost of revenues:
Direct cost of revenues 58,533 54,447 230,593 209,747
Network, other costs 5,544 6,526 23,032 28,164
Network, depreciation and amortization 10,461 10,902 42,721 41,335
Total cost of revenues 74,538 71,875 296,346 279,246
Gross profit 24,132 21,223 93,954 83,029
Expenses:
Sales and marketing(*) $ 13,563 $ 12,875 $ 48,381 $59,382
Technical operations and development(*) $ 4,380 4,474 17,813 18,627
General and administrative(*) $ 14,323 7,482 42,875 37,068
Gain on disposition of property and equipment (129) - (5,882) -
Depreciation and amortization 989 943 3,526 4,285
Restructuring charges - 7,670 - 10,954
Impairment of property and equipment - 17,726 10,724 17,726
Total expenses 33,126 51,170 117,437 148,042
Loss from operations (8,994) (29,947) (23,483) (65,013)
Other income (expenses):
Interest expense, net (14,139) (13,748) (55,274) (51,275)
Other income, net 2,725 3,138 11,447 14,414
Total other income (expenses) (11,414) (10,610) (43,827) (36,861)
Loss before provision for income taxes (20,408) (40,557) (67,310) (101,874)
Provision (recovery) for income taxes 1,622 1,918 8,509 7,986
Net loss for the period (22,030) (42,475) (75,819) (109,860)
Other comprehensive income (loss), net of tax
Unrealized income (loss) on hedging activities 150 (1,666) (89) (2,681)
Net amount reclassified to earnings 224 165 996 (11)
Other comprehensive income (loss) net of tax expense (recovery) 374 (1,501) 907 (2,692)
Comprehensive loss, net of tax for the period $ (21,656) $ (43,976) $ (74,912) $ (112,552)
Basic and diluted loss per common share $ (1.98) $ (3.86) $ (6.85) $ (10.02)
Shares used in computing basic and diluted loss per common share 11,101,267 11,008,687 11,065,708 10,967,581
(*) Stock-based compensation has been included in expenses as follows:
Network expenses $ 84 142 351 533
Sales and marketing $ 1,613 455 2,459 1,983
Technical operations and development $ 170 224 769 862
General and administrative $ 994 817 3,560 3,643

Tucows Inc.
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands of U.S. dollars)

Three months ended December 31, Twelve months ended December 31,
2025 2024 2025 2024
Cash provided by: (unaudited) (unaudited)
Operating activities:
Net loss for the period $ (22,030) $ (42,475) $
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 11,450 11,845 46,247 45,620
Amortization of debt discount and issuance costs 1,148 1,178 4,662 4,479
Loss (gain) on disposal of assets (129) - (5,882) -
Impairment of property and equipment 9 18,262 11,533 19,167
Deferred income taxes (recovery) (119) 504 (289) 854
Accretion of redeemable preferred units 5,105 - 14,456 9,758
Stock-based compensation expense 2,861 1,638 7,139 7,021
Change in non-cash operating working capital
Accounts receivable 3,487 (1,986) (3,616) 1,328
Prepaid expenses and deposits (6,690) (981) (7,060) 331
Deferred costs of fulfillment 3,286 (746) 3,941 (5,907)
Accounts payable & accrued liabilities 2,879 8,179 (4,668) (1,565)
Contract liabilities (5,729) 775 (3,869) 8,721
Other operating assets and liabilities 1,865 (988) 7,467 308
Net cash provided by (used in) operating activities (2,607) (4,795) (5,758) (19,745)
Financing activities:
Proceeds received on exercise of stock options - 43 31 43
Proceeds from issuance of notes payable - - - 62,991
Deferred notes payable financing costs - - - (2,011)
Repayment of syndicated revolver - (2,000) (5,000) (16,500)
Payment of syndicated revolver costs - 23 (423) (25)
Net cash provided by (used in) financing activities - (1,934) (5,392) 44,498
Investing activities:
Proceeds on disposal of property and equipment and intangible asset 454 542 19,477 542
Additions to property and equipment (4,358) (11,666) (17,114) (56,460)
Acquisition of intangible assets - - (206) (575)
Net cash provided by (used in) investing activities (3,904) (11,124) 2,157 (56,493)
(Decrease) increase in cash and cash equivalents (6,511) (17,853) (8,993) (31,740)
Cash and cash equivalents, restricted cash, and restricted cash equivalents beginning of period 70,756 91,091 73,238 104,978
Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period $ 64,245 73,238 64,245 73,238
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 46,759 56,903 46,759 56,903
Restricted cash included in funds held for trustee 5,315 4,628 5,315 4,628
Restricted cash included in secured notes reserve funds receivable 12,171 11,707 12,171 11,707
Total Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period 64,245 73,238 64,245 73,238
Supplemental cash flow information:
Interest paid $ 8,507 9,104 43,778 37,961
Income taxes paid, net $ 1,120 2,375 5,651 7,653
Supplementary disclosure of non-cash investing and financing activities:
Property and equipment acquired during the period not yet paid for $ 2,224 3,572 2,224 3,572

Tucows Inc.
Reconciliation of Loss before Provision for Income Taxes to Adjusted EBITDA

Three months ended December 31, (unaudited) Twelve months ended December 31, (unaudited)
Net Loss for the period $ (22,030) $ (42,475)
Less:
Provision (recovery) for income taxes 1,622 1,918 8,509
Depreciation of property and equipment 10,176 10,637 41,580
Impairment of property and equipment 9 18,262 11,533
Loss(gain) on disposition of property and equipment (129) - (5,882)
Amortization of intangible assets 1,274 1,208 4,667
Interest expense(net) 14,139 13,748 55,274
Stock based compensation 2,861 1,638 7,139
Unrealized loss(gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities 210 (525) (391)
Acquisition and other costs1 2,949 8,438 3,988
Adjusted EBITDA $ 11,081 $12,849 $50,598