Mr. Elliot Noss reports

TUCOWS REPORTS FINANCIAL RESULTS FOR FOURTH QUARTER 2023

Tucows Inc. has released its financial results for the fourth quarter ended Dec. 31, 2023. All figures are in U.S. dollars.

"We finished 2023 at the high end of our range for adjusted [earnings before interest, taxes, depreciation and amortization] guidance, a result driven by robust growth from Wavelo and consistent performance of Tucows Domains," said Elliot Noss, Tucows president and chief executive officer. "Consolidated revenue grew 10 per cent year over year, which, along with a strong finish to the year, helped drive operating cash flow up to $9.0-million in the fourth quarter, up from $2.9-million in Q4 of last year. We continue to make growth investments and direct cash flow to build the Ting and Wavelo businesses, while also managing our debt. In Q4, we further deleveraged the business with payments on the syndicated debt using cash flow from Wavelo and Tucows Domains."

Financial results

Consolidated net revenue for the fourth quarter of 2023 increased 10.2 per cent to $87.0-million from $78.9-million for the fourth quarter of 2022. The growth in Wavelo, Ting and Domains revenues was offset by a small decrease in revenue from Tucows Corporate.

Gross profit for the fourth quarter of 2023 increased 4.8 per cent to $17.8-million from $17.0-million from the fourth quarter of 2022. The increase in gross profit was driven primarily by robust gross profit gains from Wavelo, as well as gross profit increases in line with expectations for Ting and Domains. The increase was partially offset by increased network depreciation and network expenses as the Ting network footprint expands.

Net loss for the fourth quarter of 2023 was $23.4-million, or a loss of $2.14 per share, compared with net loss of $13.4-million, or $1.25 per share, for the fourth quarter of 2022. The increased loss is primarily the result of costs from the continued investment in the Ting Fiber network and operations, network depreciation, and higher interest expenses resulting from higher interest rates and increased debt.

Adjusted EBITDA for the fourth quarter of 2023 decreased 62 per cent to $2.6-million from $6.7-million for the fourth quarter of 2022. The decrease in adjusted EBITDA was primarily related to planned investments in Ting's operating capacity and growing customer base. Cash equivalents, restricted cash and restricted cash equivalents at the end of the fourth quarter of 2023 were $92.7-million compared with $110.7-million at the end of the third quarter of 2023 and $23.5-million at the end of the fourth quarter of 2022.

Management commentary

Concurrent with the dissemination of its quarterly financial results news release at 5:05 p.m. ET on Thursday, Feb. 22, 2024, management's prerecorded audio commentary (and transcript), discussing the quarter and outlook for the company, will be posted to the Tucows website.

Following management's prepared commentary, for the subsequent seven days, until Thursday, Feb. 29, 2023, shareholders, analysts and prospective investors can submit questions to Tucows's management at ir@tucows.com. Management will post responses to questions in an audio recording and transcript to the company's website on Tuesday, March 12, 2024, at approximately 4 p.m. ET. All questions will receive a response; however, questions of a more specific nature may be responded to directly.

About Tucows Inc.

Tucows helps connect more people to the benefit of Internet access through communications service technology, domain services and fibre optic Internet infrastructure. Ting delivers fixed fibre Internet access with outstanding customer support. Wavelo is a telecommunications software suite for service providers that simplifies the management of mobile and internet network access; provisioning, billing and subscription; developer tools; and more. Tucows Domains manages approximately 25 million domain names and millions of value-added services through a global reseller network of over 35,000 Web hosts and Internet service providers. Hover makes it easy for individuals and small businesses to manage their domain names and e-mail addresses.

We seek Safe Harbor.