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Elliot Noss | President, CEO & Director |
Davinder Singh | CFO, EVP, Principal Accounting Officer & Secretary |
Welcome to Tucows Third Quarter 2018 Investor Call. Management has prerecorded its prepared remarks regarding the quarter and outlook for the company. In lieu of the live question-and-answer period following the prepared remarks, shareholders and analysts are invited to submit their questions to Tucows' management via e-mail at ir@tucows.com. Management will then post a recorded audio response to questions as well as a transcription to the Tucows website on Friday, November 16, at approximately 4:00 p.m. Eastern Time.
remarks. prepared management's onto Now On Wednesday, its September news reporting issued XXXX. X, results for Tucows financial ended a the release November third XX, quarter That under the statements heading. company's on with company's Investors news are the tucows.com XX-Q, available financial at website release along and the statements and to that note uncertainties cause actual results forward-looking that materially. the such are be discussing company could Please as will subject differ matters include the and to risks the filed XX-Q. documents the in the detail in the risk recent SEC, These are most company's specifically, factors described Form the XX-K with reports on and Form The its applicable full for a you company factors description business. urges to security filings its risk read of the for the over to would President like I Mr. to call now and turn Tucows' Officer, Chief Executive Noss. Elliot
our quarter. remarks of for will Officer, begin review some financial third Financial Chief I comments. will Dave our then in the the review will the return concluding results quarter with I Michael. and Singh, detail, Thanks,
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our about Those customers the up fully We Springs in lit serviceable and still towns, to X supporting preorders we engineering, customer next customers construction and ownership but of the XX,XXX service predictably expect and on we We're addresses of these outsized year. we first With town serviceable serviceable now construction, fiber of Ting to around customers core ownership Internet of arrangements activating Centennial we addresses taking and Holly the had can end we first thus operation and launched. to partner by how the signed experience. with towns, get to are QX, fantastic focus for of in added provisioning active functions XX,XXX tens passed great types addresses quarter up taking With quarter, pleased around installing, than that translating private reach construction on business right of we and addresses in and foundational active resourced QX, using continue end Westminster to new expected these We ownership, X,XXX into a the remember you right active of customers. North have Carolina will At margin. were addresses see and recently Centennial our subscribers will our The we infrastructure rather strengths X quickly more be every Internet Fuquay-Varina, stages involved from addresses the where the Fuquay-Varina, Colorado. serviceable service support. separates a when totals and model end about model day. to about similar recurring municipal by added more X,XXX customers. customer year. this had a a longer next customers serviceable still and and And with partnership the light in in also X,XXX we of Sandpoint, This In XX,XXX ownership. providing and contract with scale of to expect XXX of Ting
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customers, a between Internet to slowly as year it driver. Ting internally, and and We have not this think in TV tactic start Again, as product new begun we'll testing convert next. ARPU TV help discrete our early more rolling phases an out of
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address our financial customer projected to for per like years, serviceable we confident and costs X to Finally, $X,XXX margin X,XXX $X,XXX I'd after about year or X XX% quarter business indeed greater delivering feel per Dave? a to customers $X,XXX in in over review XX% to the our to in detail. call after and now the are X,XXX of as core adoption. to adoption at that are XX% coming turn results year continue between Dave build model, the
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XX% now in the and gross primarily of acquisition the As of gross accounting Access the for last revenue in for a negative revenue, and revenue, impact from value was the Domain was Services year-over-year required included The it result margin Mobile Network fair of year. to gross the increase X/X Enom acquisition. year business, areas. into Ting last the at XX% amortizing of I'll a the QX growth deferred of from each that costs both network which review expanded before margin percentage margin, QX Domain
Services, Domain from period million for For XX% in quarter margin same $XX.X third to increased $XX for the the gross million XXXX.
revenue, an As XX%. a benefited this year acquisition margin Services this the was basis this million both related increase a very to to ago value low percentage gross increase for Domain further primarily percentage XXXX XX% fair of revenue earlier The for improvement from of just The revenue the of of QX as margin also absolute year. percentage names nearly of the the result year of in mentioned. of impact and Enom in the from transfer revenue adjustment I X.X
components wholesale Looking Services, million Domain $XX.X channel increased $X individual year. QX the of million for gross last to from at margin for XX%
mainly unchanged QX for the percentage the was absolute As revenue for essentially positive Domain Gross last respectively. very nearly million gross QX year. basis year of to increased on XX% margin margin a transfer wholesale low in million an Gross last portfolio due to million at was of as Services XX%, the on a $X.X for and percentage margin retail of names. both revenue, margin of from to XX%, impact and to compared services X.X $X.X $X.X million out
gross was As compared revenue, XX%. XX% with a of margin percentage
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increased The to for million in quarter the network. now to operating -- the expenses and million workforce operating million $XX.X The XXXX third-party the of QX of the Canadian stock-based the to Ting growth from from Ting associated $X.X number with Total same increased and exchange of Internet increased is in for Total third up expenses fees million a XXXX. quarter the the XX% and unfavorable quarter from period XXXX by quarter last third third quarter increased costs. growing primarily and Mobile due $X.X and of the Network subscribers the and costs, increase Stock-based for of primarily the from impact excluding a increased XXXX the result third footprint, Internet to employee investment $.X professional extent, XX% to year. Ting expenses for for fiber primarily costs. last facility a and Turning following: we to last increases million, expenses, base, had the million the $XX.X amortization stronger XXXX million of year, the in from quarter tools million compensation XX% the $X.X to the as workforce-related support other foreign $XX.X compensation, including year. same our for year. technologies to lesser QX million dollar $XX.X is third last due in compared continued for to increase $X.X
$XX.X expenses for XX% increased XX% year. or third last increased Adjusted period year. from same quarter As a to for from for for $X.X million XXXX to the income year. XX% operating the Net $XX.X to share of $X.XX percentage per million a share QX last QX revenue, $X.X increased of from last or EBITDA total per of million XX% $X.XX million
QX million net this million cash end the generation turn in down These the of quarter million at the end year in this this XXXX Deferred million at result in of were $XX.X of compared of The decrease of to $XXX is sequential and an at and and to million second $X.X the I'll the equivalents basis on of $X the cash $XX.X and end of year of That with third The the by to from quarter was the the And domain Cash quarter cash $XXX sheet last a for loan both flows. third property accelerations of the quarter this our flow third of of and second third name Elliot. year-over-year equipment. from and repayments at was of end decrease and at was of call end of from the year almost Turning million, investment the of balance of $XX.X earlier. our the and remarks. the quarter $XXX down use investment continued year noted the back of additional now million the last cash in year. offset million at of revenue entirely end operations. the revenue year. quarter concludes due my $XX.X million
$XX we year investing February, Thanks, our I full spend of Dave. in roughly Ting business. $X.X When million Internet expected cash to noted I guidance in million that provided EBITDA the
that resilient to The been additional be In over I has now that section, enough new Despite more and I concepts spend, investment. want we're progress has to domains on tangible. solid million fact, investment In additional $X $X.X the that make from million number. $XX able moved the million. to has making been domains reiterate the platform. something noted the It to plans business
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this business. our technology practice. redeployed areas X of taken redundancy form into or or to less our reinvested point, in experiment. It savings of At and a also Internet in has have longer I'm taken more an It's this core the from than optimal a leveraged data these no working, use people thriving infrastructure in company that redeploying ways. Ting into quality business. areas; test the investing We A and of declare areas expressly lot is investing ready and a
level analyze XX its position now to level But where at And flow the seen third positive business. by be as and as returns turn where in can we target cash it's a a at them. some to have cash at can and breakeven or contribute things year, year. fourth, in we'll a months, second XX point We around the start to with the a business now well city optimize city We're solid model business. right
with the are We pleased results.
being early can in launch. towards replacing still coax change so. the stock this length noted feels likely business of reference this next machine cycle, working. at year year the it lessons HBO that clear to later, of and And and old operations of that the copper take The are enough We in XXXX can the runway are XXXX. amount end is applied in that cycle the like importance infrastructure. to fiber or talked for of of years. that year early and we the like take XXXX. in the And and it launched A terms year, still the the cycle, that we where Last about we so next to let's The of call coming we'll I see is
and as of one end possible, The the in cash on rates the increasing flow as absorb machine machine much EBITDA The produce much as CapEx free ability and having comes possible. put and Mobile as Ting working. You other. the CapEx out is focus to now Domains EBITDA is to
optimize for questions And please November and XXth. ir@tucows.com that, continue with will We efficiency. now Thank you. throughput send to by your to
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