Recent TCX transcripts
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Monica Webb | Head, Market Development and Strategic Partnerships |
Elliot Noss | President and Chief Executive Officer |
Dave Singh | Chief Financial Officer |
Welcome to Tucows’ Second Quarter 2020 Management Commentary.
We have pre-recorded prepared remarks regarding the quarter and outlook for the company. A transcript of these remarks is also available on the company’s website. In lieu of a live question-and-answer period following the remarks, shareholders, analysts and prospective investors are invited to submit their questions to Tucows’ management via email at ir@tucows.com until Wednesday, August 12th. I will note that the Q&A from this call will be combined with the Q&A from the call this past Monday, August 3rd on the DISH acquisition of Ting Mobile assets. at questions that in the will on August your response recorded Tucows’ address Monday, transcript P.M. and be XXth will directly, a or audio website Management X approximately posted to Time. Eastern along Quarterly of We would also the the of Investor which is to with XXXX, advise last all in the five key for Investors businesses well available KPI as and Build updated metrics XXXX, Ting that provides our Scorecard Summary, the Deck. like website, Tucows section for quarters, the updated as year-to-date, and
August at Now its for management’s Xth, second XXXX. prepared Tucows of the section. are for such, cause Noss. business. security filings the for that materially. turn to results Executive company’s the Mr. release, discussion actual Elliot under factors a differ following and company’s described specifically to remarks. in SEC, quarter the reports Chief reporting Officer, the factors These urges results the uncertainties Please most are are the recent a with filed that full to would On company Tucows’ you company’s release news include applicable on for over its June statements The the its the now call risk description I forward-looking which, XXth, Thursday, the That Forms news to documents XX-Q. like the Investors on detail President XX-K read in may could ending risks and available website statements, note issued financial and subject financial as tucows.com, and risk to
revenue a a the of Ting results decline with of a in increase post-quarter Starting changing offset Monica. a with Internet the period XXXX from the network million, before QX income, total with strong included share. will Gross QX Domains $XX.X discuss Mobile. Dave $X.X a quarter for in more was performance, by Internet in margin both Ting decrease same $X.XX marked expenses in to a being dollars XXXX and two for was items increases by per X%, change by or Thanks, Net increased another X% Mobile. year, million detail, specific was world. last that Ting decline offset Ting high-level by quarter, non-recurring QX strong in partially non-cash, in which being
year income items, per these Excluding share. $X.XX was income share. million million a or $XX.X to QX net net X% EBITDA with $X.XX Adjusted last two This increased of or $X.X for million. QX compares $X.X of for
from quarter $XX flow XX% million, Finally, to and operations the for from year-to-date million. was operations cash from year, the second brings up cash $X.X of total last flow
continue business, was economic Domains of response Turning focus the gross to reap we solid to the Domains within and decrease the dollars results. to in yield driving increased as for business continues on to this another X% intended transition Domains, yet to margin on underpinned margin gross business, quarter QX of as business year-over-year our by our the revenue, profitability pandemic. this a the Total X% commerce benefits the online consistency for in
registrations from year-over-year registrations, XX%, increased total up Our of driven higher for year-over-year XX%. margin million, in component by growth Wholesale remarkable million, Domains saw the X of increased with Domain channel a Gross in wholesale Services Wholesale XX%. X.X to X% part margin gross which new
will financial large who these of and displaced online, proportion a first web be increased registration new And full began their establish presence entrepreneurship over for remember, QX, pandemic spread towards saw that the on businesses we globally moving career as that the workers QX, of focus resellers stage to the the paths. quickly end activity out of and helping next deferral of in effects micro-sized next to turning transactions. time. the several with businesses activity quarters to the due experience of start-ups small in was expected, revenue the those on As and we the this benefit A
to customers. gross success from high-quality, on continued in addition, In our higher gross benefit focusing Wholesale margin margin
Importantly, macro of now the continued to This environment, high renewal three rate the quality steady resellers of rate and both remaining amidst the real their domains this straight, quarters businesses. tumultuous it at where industry has our average. XX%, held above been Wholesale our of is for attachment solidly evidence
Added than margin impressive of the XX saw more year are than quarters, in growth made us. more our year-over-year months the gross we the now that fifth growth Services, double-digit last consecutive four we quarter expiry to behind stream the This at Value even given For dollars is of X%. changes last
Domains in essentially gross up channel, growth our solidly benefit renewal Our of second remained our the registrations quarter XX% the after higher the QX was average, and essentially a several volumes the of These XXX,XXX, continuation X% Retail compared higher that marked names from consecutive activity new higher-priced transaction Enom XX% by XX%. nicely to the in of quarters of consecutive offset with driven was Wholesale QX year-over-year transaction churning out. year-over-year to ticked above rate of the Retail also fact, total like by Retail flat to for up in QX. than benefit contributed to channel industry margin for Channel registrations of up for channel, naturally experienced more the This total transactions The declines. QX in pandemic, as increases last the year, and
channels Wholesale not registration remarkable levels those the increases same have activity are we both and strong in that QX, QX. we experienced year-over-year While at continued to in new Retail so far see in
first Domains, registrations to pleased it migrated am on our July our report we in platform I flawlessly. went early and new Finally that to
the We the the in the the difficult. foundation success a shared the all position would look technological not support were benefit business foreseeable be each functions clean the The Domains such meaningful have new across now Domains certainly of sheet for the to The and businesses. accelerate only also been exercise, not two providing not will has benefit but from Mobile platform such number platform. had in in, We services significant platform platforms, the of challenge re-architect transition we used a with additional to to to businesses, of to to exercise three rare, the we addition and us that XX-year-old provide to of building undertaken into with will had will allowing registrations future, new of technical new the Internet business, always a debt. is a
unlocks Tucows business. the week, As whole we value across have seen with this work our announcement earlier that
announced service had and on subscriber on for which business QX with writedown we US-Canadian to loss performance lower versus border customers. subscribers of this last I and and XXX,XXX finished loss In key and SIM and XX,XXX short-term of XX% X.XX% data QX just Gross was Mobile one-time for week. and quarter. of margin Ting revenue the with usage clarity the revenue per Mobile, for includes a Churn highlight compared for traveling X,XXX the outstanding also X.X% for X.XX%, gone DISH Mobility about subscribers, quickly XXX,XXX in over COVID. serviced accounts revenue down closing. vacations. by and the card since active and entertainment this quarter. X.X% XX% accounts ago a zero was subscriber that and the was Volume and the and last and earlier sector detail some active the reflecting Ting business QX was recurring For more down the that year will declining more deal a the had the down year ago quarter low-contribution inventory primarily credits. Revenue business COVID, base, loss year the QX metrics quarter Mobile then US Canadians we Roam QX down Service versus just We a X.XX% of impacted to offer outsized to QX since ago, just subscriber on a sequentially. shut under from QX, those
for cellular just they the the Our quarantined used. data clearly of customers saw benefit paying
So count Churn will above, margin a that from the means on as expected XXX,XXX. lower out benefit pricing. the will for By on and deal in we close gross the that was, as base stage deal. aging August under pricing course Lower tradeoff. little noted lower subscriber DISH our also legacy sets a earn get Xst, of
will payments the received line on on forward. You going reporting our see as item business the a distinct Mobile
we MSE longer-term deeply making While happy, next serve our platform beyond additional use while we customers plan DISH will for to be focused DISH. the on to
conversations look we landscape had telecoms similar other we sense of looks of with and a good and We past have in the the like large what it. this service pretty like, have
financial combined on money acquire short-term, MSE, we expect the The I to on As In core shift increase this earn-out improving performance last be the from year. focusing to dictate the cash first MSE the from half seeing expect will to this the In and have the of and our in short-term. expect to been flows negative MVNO to subscribers, of I and we call, we resources start Mobile neutral spending competencies. Mobile of exceed cash ramp stop on slightly time. an over hiring to mentioned fees shift maintaining XXXX, flows the an the impact our we this our our Ting new we business to improvement
the between this be need with and customer business, end making working between how will platform, With as long-term. business, the new focused will be the we follow short-term integration telecom as MSE should short-term, successful initial focus In should a the longer-term, your companies, about learning In adding difference handling the scaling adding and in migration, focusing possible thinking real on to investors Boost about our the there networks. we and on users. XG In guide. on customers the up the MSE be the each
of lot and and will for We will switch to those the first migration about a talking then some the metrics. while, be start to Boost longer-term integration
to we ourselves see a real leverage platforms to opportunity We on going phone that maintaining line that again. and way complex us impact a greater us a that the focused I business We We competition the want cost now you happier be we’re on to signposts. pivot. weakness; it, some right are that difficult a thinking short-term conversation in structure for about with We declining, was that doing greatest with processes. mobile not this We entrance. of those was DISH’s single a future. was have that And very but give compete to could our our of and simplify prospects, greater greatest for even US the we strength, space are market. a is an making address building business grow about but in are a take increasingly long-term we lets know that today excited it right
proud and are get We started. excited to
on said, for records of support the metrics. structure Ting and the is to with our to quarter Internet, create and the being show beginning business many growth. we to to to gains, That to set being second structure Moving of work efforts more results these modest the reinforcement accelerated view as early our scale,
office gas in QX. new In We to X,XXX converting fiber which QX new us to us serviceable begin We enabled to step pre-orders investment spent will has general. of of addresses. and central a Fuquay-Varina, serviceable, and installed in business increase we at of continue bringing We the passed with lit QX, X,XXX infrastructure in customers. an nearly respect a those over CapEx $X.X million became addresses, the to XX,XXX over total in to XX% on fiber
markets As office serviceable addresses. have apace facilities in final completion North addresses Centennial, Carolina in in the passed other our those again our put of and markets, and into we outpaced construction central Colorado, continues work our
those tranches completed. expect come early late will facilities We of office passed to central which serviceable, QX convert to customers online to QX once
subscribers. As at QX, Ting is of Internet XX,XXX now
the number temporary about that QX April, new were due COVID-XX. our by of of most to QX, Although impacted installs from numbers has suspension concerns increased through
will enable without transmission. You installation connect us installation an to on customers recall that process April to smart of XXth review protocol and risk we implemented
of call to installation Carolina see development footprint. to of demand us I’ve cadence, enabled out, orders pandemic. pleased an about other that impact and to report work I’d point due to We’re One data we’re backlog has the spoken North to starting installations from through previously the optimal to in our return this like is, greenfield the for increased
need new quarter potential in that we not Again, you X,XXX, which otherwise. housing or video. our This being approach the Internet much jumped I growing Raleigh are spend the linear to to television many how to by would market customers always would addresses in demand versus potential planned our us, serviceable calculation that for that in come to the change was to on get meet now majority product on a would Ting our of want addresses area. traditional a update how built
home. and even seems Premium with so expected, Internet COVID. it the get to example, X% its than has accelerated top TV year. For in be materially greatly people the the worth fourth the many the We traditional for might is changed. need. past more couple reported ramping there value and quarter of still XX% our now fiber churn AT&T, the The of just of over increasingly from Cord subscribers. local years, sports think calculation investment. they Demand or to and seemed further have improved straight since cutting past for choice we and people has for on roughly OTT are solutions channels has stronger working its ways
Finally, that of relationships to third-party had traditional TV than to I managing thought. burden more to seems originally a like monitoring admit from service we engineering a will support
For an no all worth can to us. are longer embrace or these Instead, to solutions solution and can as everything seems we would complement OTT prospects reasons, for television multiple comfortable and in investment incremental our customers. it and and the do we a customers earn the Internet product traditional effort going that make as compelling we linear
to and off customers really more With the spend recurring and our satellite in And, forward. less $X.X investments changes, we We to a think feel hardware, the roughly and we this made additional better changes wrongly set-top importantly, re-evaluating net we good But back about upfront impact these take million a middleware have boxes. step costs related taking and will expect not we have might going the most and experience. rate do goals. of the wrote our landscape generally,
coming California, in early Finally, our in to first deploying with July. Fullerton, network private its online infrastructure QX, at Ting’s began partner tail customers of SiFi the Networks, light end there
at over infrastructure partner Fiber, Singh, the Dave? deploying first in completed to will the the phase review in quarter end QX, now first Netly turn its in customers greater lit of call the to August. results Dave addresses our Ting to like there for passed Our I’d Beach, Solana California, and our we financial have of detail. CFO,
before XXXX million, second of in was net $XX.X a growth the second revenue more revenue decrease a million with of lower by from for year. from costs Total million, to quarter Thanks, Elliot. of Ting the last to Mobile Internet for Strong the Ting of QX decrease year, million offset was $XX.X quarter decline in X% due revenue. for than Cost decreased last $XX.X revenues revenue. primarily network of $XX.X X% the
I’ll increased the to for to Starting than from X% $XX.X Services, XX% the increased and of review Domain QX as from X% last for year-on-year $XX.X gross the Services each last Domain increased a year. second however, of or points, cost for over declined of revenues quarter million mix network for basis Gross QX XX% from Domains business. XX% with to in margin million, second to quarter XXX gross As network revenue, before of more primarily now by million to million, just of $XX.X XX%, margin Access due a costs costs the from before Network improved percentage percentage year. businesses. margin for margin an $XX.X revenue,
increased of to As XX% for from gross a percentage Domain revenue, margin Services XX%.
to year. Within $XX.X million, gross the for for million Channel business, from the increased the last Services second Domain quarter Wholesale margin XX% $XX.X
of million focus quality margin, on in customers. absolute to Retail than to our both increased year to $X.X $X.X for in million, quarter, gross success for particular, business the this Services our continued revenue, Gross of QX a XX%. as Domains increased for an X% XX%. high was from a but, margin from margin by less percentage primarily slightly last margin managing Domain dollar revenue, and XX%, decreased As increase, the result basis, gross the in XX% percentage of on Wholesale Again from
with costs, margin the in $XX.X increase margin decrease margin Network quarter second a of was $XX.X decline to now million Other million in COVID-XX margin The came increased increase in XX%, the for March gross gross on million in the starting year. gross Turning a being this year-over-year million, acquisition Mobile halt of the last to million, both or our QX January X% in year, in Access, the the subscriber result the shutdown the QX travel Services more or in million Mobility offset Roam growth of impact this $X.X for $X.X for of base. from gross Other of year, Including decrease as was the business related Mobility and of was completed contribution than $X continued impact Services well incremental Internet Mobile leisure $X.X a which primarily driven Networks by The as of by Xst Cedar XX%. contributed Ting Roam as business to the business.
As increased of a in up Mobile Other of to up ticking to QX and with last from from revenue, XX%, to increasing XX% XX% margin year, Network slightly from for XX%, Access percentage gross Ting Services XX%. XX%
the our tools associated $X.X built. the expenses has we being Roam usage with professional capitalization a work to reduction subscriber due $X.X of vacation related Contractor capitalizing accrued while by $X.X extent Total third-party costs, efforts due impact primarily due delayed quarter an Ting with Xst to of issued in as as Cedar Internet fees, reduction workforce people including marketing increased $X.X million. lesser mobility, year. million the increase to now the related and same the a the of The TV expense, second quarter costs ago. year, lower volumes by of $X.X $XX.X to following: related travel business operating additions including for impairment to primarily of higher increased $XX.X work. by to associated the from to platform network, driven primarily a to million Turning for to expenses $X.X XXXX in primarily versus to notable COVID-XX. offset a increased had QX expenses ongoing to second credits business reduction our a costs related a new the workforce million, million assets remainder commenced due increased decreased impact. was decreased totaling discretionary million, this from Amortization to Internet higher from of and million. year, buildout and million, In the $X.X related Ting from build-out, software of this Marketing primarily incremental Cedar last XXXX, business were network by The due relationships totaling quarter, Domains related support development XX% January set-up network performance other million. costs, of impact higher expenses million the costs acquisition. primarily increase by mobile fourth in is year $X.X XXXX acquisition assets increase These bonus the Excluding from year XX% anticipated million, well $X.X from assets from improved and to million hardware performance amortization $X.X The as our payments year-to-date and and $X.X increased the customer the the the Ting of increase added the million expense an to resulting to on $X.X million, Cedar is expansion, COVID-XX the for million last costs period by quarter related. of for from which rights $X.X the intangible increased intangible Cedar from and
asset to lastly, expenses the impairment XXXX related related this And million part shutdown of $X.X $X.X foreign relationship increase was exchange had of impacts. related the acquisition. the as also business Roam We set-up intangible the a customer there of assets million quarter, to net to mobility of in
in $X.X Specifically, hedge of last do of compared forward to of decrease not QX year-over-year that in mark-to-market over for a we to a remeasurements million. QX in contracts accounting, for year, just had neutral $XXX,XXX impact qualify related a currency gain resulting our expense XXXX
revaluation In this of experienced our compared liabilities $X.X a the of to addition, the had of of impact quarter a the assets on and foreign in which XXXX, loss monetary expenses a $X.XM million of $X.X we denominated year-over-year million basis. increasing gain on quarter second
operating mobility which would but if total to revenue, non-cash, of in impact second Net of the $X.X an quarter the the Mobility Elliot from XX%, share, $X.X items our expenses XXXX as XX% percentage impact to share. shift the these income included Roam TV $X.XX noted, per to a for Fiber after-tax was million million, have As related $X.XX the excluding increased from other Roam the for XX% or of impairment. non-recurring the increased only QX, our and strategy specific shutdown for on one basis, or of to business. Together, totaled, per two
$XX.X $X.XX non-cash, have non-recurring net share last QX to million compares last or $X.XX year. QX This year. year QX quarter the second X% million, $X.X two per Adjusted income for share. $XX.X this been of Excluding would per or for increased million EBITDA for items, from for million $X.X the with
Turning of cash XXXX equivalents year. first million to $X.X year, the and end quarter of last end at million, end quarter balance the $XX.X second was $XX.X compared of of this and at the cash sheet of the and million with of cash at the quarter flows, second the our
additional cash our we in million $XX.X primarily out. last During year. of in Cash to offset $X.X QX equipment, operations $X.X with from million investment from build operations year, Ting of million compared property generated an this and by the QX in related was Internet
the from up $XXX,XXX an $XX.XX. quarter million turn remarks. also X,XXX quarter year. program, of the price average down shares of quarter Elliot. That We market our to now under end million, million Deferred end buyback used was of the second I’ll $XXX of end at at open the this $XXX from revenue second back year, but at my concludes of $XXX last of at it first the the purchasing
leaving Ting-DISH announcement deal unchanged negative that the with guidance slightly in XXXX EBITDA be for our our year noted Dave. $XX neutral and are Thanks, to at we published the the commentary therefore million. for expect to concurrently I
have Mobile-DISH somewhat how and different roots architecture in just like customer this our earlier I was transition platforms. market. is of on larger the across nearly primarily well processes number three business between dialup up We our Internet. the market billing, experience. of of But transaction early some businesses. ISPs teased between as We them specific order an Domains We an around In inside our the between that that the a years the and announced provisioning billing to running you a separation service common long-time other three a we approach. We distinction a have with OpenSRS, Many noted who were other names. and and fit now plus domain essentially each retail were ten tucked US registration as higher we in comes because these wholesale. also functions these into always functionality, entry competencies, and around both billing, each platforms. platforms marketing margins and of service They processes needs mobile are the of that three macro the to as opening business roots, by sold there platform. from roots to Tucows, new deploying business. all announced understand of Internet to characteristics, all from much they world we very a platforms from monolithic Ting the deploying and to of Mobile a ISP the built know ISP a customer the been created of have benefits market complexity marketing the it retail as of was it In elements our both because provisioning and our key excellence From understood experience. dynamics service. billing, platform, SaaS set in experience. referenced from we we functional the the ISP has phone subject experience mobile, harbored and small At of service business can a have to viewed We three that elements, connection is competitive between and business on across customer deeply infrastructure, as And billing Internet fixed generally and be businesses we Generally, mobile frontline all the time business. and to that processes care and infrastructure, moving better core DNA time employees. explaining the both at that the start sense, are I of customer are distinct are in experience. in world. ago, different very these platforms services up With remarks domain case at spaces, entry see our business. to investors week, together. MSE much In we a be those mobile Those the matter make different lot mobile in a into that common out the each attractive retail characteristics, we across Internet all mobility. Today, requires frontline days and distinct And desire lead doing event-driven and it window excellent all provide These ISP one in provisioning our In the know of have shared in of segments we segments, the have, that to in domain businesses And of my providers, fiber many with from of fixed further understood we the Domains intimately. each provided domains, will a also a new the set payments, the deep each work understanding great in to customer and commonality segments, my the was we apply other. of the platform, experience. provisioning. one problems. is billing, were customer customer the are these the make I by businesses: customer of that the the distinguished It retail intimate modern, In names much provisioning of key more
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