Recent TCX transcripts
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Elliot Noss | President and CEO |
Dave Singh | CFO |
Welcome to the Tucows' Second Quarter 2018 Investor Call. Beginning with this call, Tucows is evolving the format of its investor calls such that management has pre-recorded its prepared remarks on the quarter and outlook for the company, in lieu, of the usual question-and-answer period following management's prepared remarks, shareholders and analysts are invited to submit questions to Tucows management via email at ir@tucows.com, that's ir@tucows.com. Management will then post a recorded audio respond to the most salient questions on Wednesday, August 22nd at 9 o'clock A.M. Eastern Time.
Now onto management's prepared remarks. Tucows the news XX, second X, financial reporting XXXX. August for results quarter Wednesday issued release a its On ended June available That financial at with along under on are tucows.com heading. news website the Investors' the the company's release statements company's the matters subject forward-looking results are will be risks to the actual and uncertainties differ the statements, that discussing as and note company Please cause materially. such, to include that could the with most described are detail the the in Form SEC, filed and specifically, reports These XX-Q. risk factors XX-K recent company's in the on documents Form for The full applicable to company urges read you business. its of its factors security risk filings a the description for I Executive the turn Officer, and Mr. would like Chief President to call over now Tucows' Noss. Elliot
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of quarter, of performance our saw domain last second again, Total The down $XX.X names million, to each million was solid quarter X.X in first of which no virtually once $XX.X year, year. businesses. due million margin in bulk during this but from transfer of the QX expected revenue was the
margin X%. speak will small $XX.X a to QX the gross importantly, reflecting $XX.X the down year-over-year to few from million, X% million, Adjusted a number in for EBITDA total business increased for increased $X.X minutes. by impacts from million. that second of across was More Net million quarter income $X.X Dave
Turning to businesses. our each of
last delivered ticked retail approximately Domains transfer business Our an the X% QX, metrics business XXX,XXX, we've as quarter-after-quarter. or to total reporting XXXX. the acquired wholesale business legacy for now The bulk also with the In QX channel, And the are to Domains are just that Domains year. XX%. percentage steady less line we the in of expect registrations registrations rate Domains million, in continue come and large to we in outside up The QX wholesale reminder was previously discussed. were of of last performance from quarter, renewal with aggregate year-over-year deliver which the consistent of approximately that point QX Domains for performance Enom Tucows channel up again X more another of a total that January
the wholesale was in being rate we channel believe for also Enom at QX. to as name Regulation preserve the specified registrants' decrease The our retail. by growth continued offset be the the around of We our at of Both status ICANN Hover know as anticipated And retail goal. the pieces Design With or renewal registrations and XX% the in EU pursuing track sharing, non-GDPR-compliant chose and average. display collection, significant leading of to processes Protection regulator quo policies, May to with above in we specifically privacy rates XXth, the industry continue practices data. Data what retail our is comply well much Domain launched you as to is domain GDPR. Privacy required changes to the General by On successfully ICANN space. the to to as rebuild the possible
upheld go too and Friday Court far. not ruled against again, consider moved Regional Lower on and decision, ICANN the ICANN the fact, the of We last ICANN's week, Court injunction case was for -- denying, that acrimonious Xrd, process then believe note in did filed a whole the don't in on to preliminary be August an with to we it both GDPR in comply believe review again The based ICANN welcome as Tucows and that of any our in and and this in we EPAG they Court Regional So, German Court's subsidiary industry, clarity GDPR. denying the Higher ICANN would relief. Germany should ICANN injunction. favor, decision far enough our Bonn. to asked a went subsequently that The we denied. Germany
across with Domains, more behind continue already efficiencies to integration and And business. to and we expect we move work GDPR as We're the forward more the continues on Finally seeing through XXXX. this whole opportunities progresses, resources finding and them time are can also Enom the for here. efficiencies us, devote creating
X.XX% lowered X.X% by a Now, growth achieved versus in and user by QX is some spending, on Revenue a in outlined of growing bases. up based mentions we Ting XXXX. Churn, year being business. our the QX gross pricing. X.X% rising and is and growth through remains in a QX history versus XX% be margins offering, the versus the increasing ago. through core efficiencies QX versus that address users costs, Margin That methodology particular freshening need Mobile and the base quarter, new We adding and cash and and onto will profitable non-RingPlus last X.X% ago. from X.XX% versus among was retention in up our in XX% and customers the despite for is from year-over-year departing contribution the customer of see we know growing currently benefit first that when see pricing competition we up mid-teens improved Ting Mobile, own do we data year
named have that operations. purchase customers have People's Operator to from T-Mobile Sprint As we is TPO, you might and read, its U.S. MVNO The or agreed another closing
about to have is XX,XXX to we incentives. not in do years. know customers. reason customer will Competition who continues MVNO not tough the if as Ting to be how four them us migrate Other do. a times around We are last a four for a billing, the employed space we one provisioning, coming weeks. initial This trust in customers complete ending know have the now or attempting care competencies don't beyond and X,XXX fiercer. their will us another or home you operations tactic is stick a one MVNOs and that be of core around the for that but We to strategy, it many migration is
elements carriers in are and from and with churn. but keep to scattering the become trust carrier quiver. benefit technical migration has Our All thrilled our to deal of welcome we because those from us customers this an to partners arrow well the unexpected, low the winds the
finished X,XXX quarter. they ads down terms were We unnecessary XXX inactive in large our about outpace subscribers no customers, QX X,XXX with accounts our from XXX,XXX and subscribers, because a and were accounts account gross generating churn of the after again and In revenue for organic shut-off costs. with subscribers second continue adjusting just over we to one that XXX,XXX
We the Last Mobile. expect provide the organic that. significantly to would Mobile. like update next Ting to of Ting talked of growth quarter I iteration customer iteration about an on I over next benefit
make can our current remember that pricing, most always carriers, improve participate. when First, sure unlike base we we
that in margin concepts process impale prospects customers additional customer right clear doing between believe, our the pricing first between validating gross of So, key decisions deliver and we near-term and the We're with balance research. qualitative both something and through not and finding are looking opportunities be control. will that and The quantitative for growth. simplicity calculating dollars exist. this others We're these tradeoff we're whitespace to and
not Our engagement save many opportunity to that who customer may presumably money by work customers think do their there still hard. to usage. early confirmed tremendous so about both. want the has love that satisfy our be prospects to like most opportunity thoughtful We suspect We being them,
unlimited, particular to of copy as that for We usage. but did to in the same leading and or opportunity We there the few. do the then know charging are room watched the that types expose readily available, in fact, of not fees also boasting industry industry is reduce the common and the led on address for significant ample the lots a has think few way next prices there last mobile unexpected with industry that We us hope confusion. that such is limits, confusion years. still in We and game-playing to
mid-November. and to Ting timing, in designing and on XXXX. give QX for we it I the of best think call pages, support update, course, will control next content, Mobile analysis, engineering, new in iteration between As the early web But panels, expect another of is
environments expanding retail hanging with These locations presence and around of about now Target country. in Ting. and exposure the our Ting credibility potentially we're great locations and XXX to cards Finally, low-cost X,XXX over Buy learn Best SIM are prospects for offer
seeing that upside. still time, XX% is mix. of levels that we're contribute For it has first the of than and lots the But part retail at less make
about XXX customers we and months was in expansions quarter X,XXX across of QX, revenue. and the of we end two of But QX, passed serviceable market believe construction with however, builds vibrant continues moving assets of customer one-tenth these Internet have we loyal less in put succeed; than that to a and With growing, Ting some I a serviceable pieces as had of on added active a is the addresses get from effort about outstanding addresses share at monthly At to X%, to addresses prowess, Mobile upside. and brand, spare. customers. beginning of active an as note, roughly core dependable of that customers. spent addresses, on So, all much the activations, much technical that serviceable customer In funnel. enviable progress of the margin ever steady us to Ting position Ting base, first assets business lots the I totals a to its Mobile, of salient and X,XXX recurring and to subscriber XX,XXX the XX,XXX X,XXX a network had the unique profit lot footprint, support, have
those June, In of live fact, with added couple of were a the small of a wave part build Springs, the to new in an outsized Westminster, just portion addresses Charlottesville, in Idaho. serviceable new in municipal consistent Holly go as expansion new Sandpoint, in addresses in and first neighborhoods
the that enjoying I that is in than to end this over of we major opportunities. range XX,XXX July There XX,XXX of So, serviceable steady quarter, QX new address learning a addresses we surge with the will the also year. a a XXXX I rather were two finish a construction Last early XX,XXX reiterated have little expect installs part stream serviceable alone. project XX,XXX. reasons. warned in now of the goal of of in likewise been customers seeing I XXX by
First, That to work early originally Charlottesville the will effect in expand effort capacity longer until start properly hoped. XXXX. taking not than taken has network
seeing than where negotiations with local be to ramp Second, contractors. localized the catch in expected stride than labor to we the expected and initially Colorado and originally are due we not shortages. build was our longer We've with then now in first city Like times industries, QX. we Centennial planned. But many in had delayed hit longer up lighting will our customers will up Centennial,
be addresses how teams managing the translated driving project, We making and Overall, I'm have pleased recurring preorders delay have costs generally construction other. to with with activations before build I demand are a us And end and no finding as many pleased and there have directly on that up. in how you is serviceable revenue. a into it on once are the one homeowners continue
well-planned, in new and of Springs we well-executed of couple we've the enjoyed As well-chosen, adoption network by that we will areas neighborhoods capacity year. confident in continues existing town revisit be we and a neighborhoods. remain to model the Holly outstanding blanket targeted end our the Ting of a there Charlottesville,
are and in network, scooping municipal we builds up are take to stepping pleased up We our its Sandpoint lit about the preorders construction As customers feel up in out early June Westminster good first its see slowly rates and city this efforts. now.
in start we Springs' next lighting Holly to south. to expect up already next and month construction We have neighbor Fuquay-Varina, begun Centennial the door
Finally, parts opportunities of in of homestretch I'm to we're of confident TV the many from touched that launch, our contracts so included hardware effort its software and to that and learning the legal an feeling some Ting has own. has organization
not of you TV boxes being will prospects received love the our and Customer test of prepared drive owners. [ph] internet, but carriage will live most improved that bit contribute, secured warehouse first We Holly I business of not get it another. have head deployment major of would Ting extra internet construction traditional ARPU that our a country and the of have remind from receiving rather add That product receives conversion pays television been our value have package physical do signals. for one have is been set-top approvals among provider from their for to is the is over crazy-fast the signals major the TV currently the are to fiber suggests and but it we're and that want to package. content the still TV to that broadcast distributes from the completed leave behind. It Springs. and XX% All the cost-prohibitive cable Research a at in TV content equipment distribution towns. those to
been have smaller to those their that for first. acquisitions it willing of to our universe limited on customer and mostly cord-cutters So, take
Internet expect Ting to market by through forward We end adoption the to in have the Ting XXXX. and boost year TV look of to that
a at over to Dave? turn to to in the five. about a financial continue after core home $X,XXX in adoption adoption, our review with remain return that like $X,XXX we Finally, recurring per the detail. results quarter Dave to XX% XX% after call year. margin $X,XXX of metrics, XX% I'd the adoption year, positive a greater for one now to
the of Elliot. X% $XX.X period earlier, Cost the the million When you from QX revenue transfer also the for that sequential QX in revenues resulted remind Total down as last second explained year, primarily this to million for the revenue comparing revenue Domains last I QX year, Gross Thanks last revenue for on this bulk for in will $X lower million million for Elliot which to of before $X.X due to $XX.X revenue $XX.X network for that was X% costs same $XX.X out of accelerated from transfer from in $XX.X of due near in XXXX margin very $XX.X a million a accounted $XX.X QX low cost approximately with million, of million basis, quarter the in decreased of million this network QX of year. out to the second year. year. year million. quarter profit of decrease increased
to of from QX for Services I'll increased As This businesses. in and last business, impact into a of Domain ago. was same last fair the the network year primarily margin revenue year-over-year accounting from for margin million for before the period deferred Network million expiry the value the X% growth $XX.X second increase in XX% margin and quarter to of acquisition. Mobile each negative percentage of the gross that gross Domain revenue, review a the result for $XX.X acquisition year the now quarter from costs Services' amortizing XX% revenue, the gross of Access of required was which QX of Ting Enom year. a
QX Domain from Services XX% reflects for which percentage As to increased Enom of value gross revenue, of ago. impact the XX%, a revenue fair margin moment discussed deferred I the acquisition-related adjustment XXXX for a in
associated a Domain expiry Looking XXXX. at decline for outsized in wholesale with with QX Services, the X% channel year, of primarily components to million the $XX.X $XX.X margin QX the gross last for decreased of from individual revenues million
due margin million revenue, $X.X to wholesale from increased QX margin As of positive a Gross from million of Services for transfer low to out retail $X very for million XX% XX% impact for margin the percentage $X.X to XX%, year. Domain increased names. gross last Domain the from partly
As and XX% last for increased fair retail increase for margin a absolute just percentage XX% under XX%. both percentage last services margin $X adjustment. basis is portfolio of to to increased revenue, in year The services Gross for the amortization of $X.X year. from of the gross million an impact QX from value on reflect the million QX of
in gross XXXX. revenue, of increased XX% to QX XX% margin percentage a As from
this margin by XX% primarily costs million Moving and now from the $XX period same earlier. the for data Elliot Network that increased in gross of carrier Access, due $XX to usage reduced million increased year, to for quarter referenced second year the last
Access As XX% from XXXX. for gross a of revenue, percentage Network XX% declined QX margin for of marginally to
a costs. Turning last primarily primarily base second unfavorable XXXX From million same to period up XXXX. our related represents overall excluding and and for foreign the of the the in from and workforce primarily second which the Network the a million extent, increased $X.X were while million to of to for the the primarily customer QX increased loss The from second compensation a grants is was expenses of $XXX,XXX, The third-party was XX% XX% dollar quarter Mobile a last expenses increased continued the increase XXXX million quarter neutral third increase to impacts in quarter quarter result $X.X quarter primarily marketing fiber. increased year, spending of to fiber exchange with stock-based and Mobility of footprint stronger network. last XXXX due $XX.X exchange operating compared in the from in due by restructuring Canadian acquired second now investment same due of to Ting expenses expenses compared workforce-related by following; growth second the the for a and due compensation $XX.X down associated the $X.X experienced for Ting year. subscriber million, of amortization in to stock-based lesser in the These amortization $X.X intangibles year. $XXX,XXX XXXX to to the costs million million and increased foreign $XXX,XXX, Ting quarter the impact as as for to $XXX,XXX, in Total was we perspective, a of unrealized Ting timing and QX being expenses. Depreciation XXXX year-over-year and increases $X.X of Workforce up offset to Roam quarter relationships. XXXX. increase
increased As total share income $X.X increased from second Adjusted XX% share decreased million for or $X.X year million of EBITDA of a quarter ago. $XX.X Net to X% a last operating or $X.XX year. QX to the the million $XX.X for quarter expenses same XX% per from XXXX $X.XX QX percentage revenue, to for period last per from second million year. the for for
was result and decrease additional second $XXX and balance this of in our the [ph] year. the chief I'll the repayments of the The is year and $XX.X to the from sheet investment it turn end cash quarter quarter million at second to operations. of and flows, property of by investment of end our was of million year of $X.X decrease was revenue cash of of of and mentioned. the That end the due of million equipment. $XX.X for loan the the The million QX. million, acceleration at an from from end previously at quarter net first were continued down remarks. the million cash end $X.X the the the of last to the equivalents million compared quarter second a the this the $XXX at back quarter the and from in use year the the and Deferred fourth $XXX Turning of end of first substantially at my at to Elliot. cash offset $XX.X million of in in cash concludes of QX revenue Elliot? this generation up now million name quarter XXXX These flow $X.X
if investment, create Internet about well, Thanks And of EBITDA why great a This took to number on is our highest capital, by like of was million Dave. $XX CapEx. is It of would often spend numerator. they which amounts so often often, up make large triple highest they our of that XX% ever way, They to When are spend for CapEx, investment. of in is capital first but technology I out This for not look numbers on I the that allows my through share of effectively Markets And may in in we And spend we this Too opportunities. each to distinction. being as is that creating why those same am terms is excited guidance. investment. This reiterating able powerful. of That at free growth, building analyzing terms business more cash by more spend low a acquisitions markets done and the is high talk muscles far to while risk used Luckily ever. this most for like Investing CapEx of in superior it distinction. return Particularly It in it $X.X ROI money capital maintenance allocation QX, there important tax generally about risk. Tucows, funny. us quarter small growth at the when is last before appreciate spend this the capacity function are and of start what this return, quarter's to quarter. strategic not investors an million. growth and not QX advantage is the is fiber benefit, the makes take closing our and to remarks return Ting and in our quite businesses, is creating able long that year. we by establishing than opportunities but something that are denominator it. to organizational course. return the capital would light CapEx prefer a nearly preferred, still is a on investors function cash. as deploying additional is integration has review, providing same the jump a This
of and submit and spend while And all business are focusing stride and of will certain this return your writing be these spend, must the whole And serve years that ramp course the flow questions numerator shortly. quarter, this you. please for that. will care and will us the over done rates paying attention its the and have to fiber cadence, to own as spend continue Thank having we to is takes competencies the cost on company. the opportunities and them well. careful Of one to coming the in this the answering as forward The on build look case, in hitting skills again, but CapEx ebb In take story investment of to a story, well. time. Every quarter we
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