## 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 |

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**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 |