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| Monica Webb | Head of Market Development & Strategic Partnerships |
| Elliot Noss | President & Chief Executive Officer |
| Dave Singh | Chief Financial Officer |
Welcome to Tucows Second Quarter 2021 Management Commentary.
We have pre-recorded prepared remarks regarding the quarter and outlook for the company. A Tucows-generated transcripts of these remarks with relevant links 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 11. Management will address your questions directly or in a recorded audio response and transcript that will be posted to the Tucows' website on Tuesday, August 17 at approximately 4:00 p.m. time. Eastern quarters, like provides the of year-to-date key for Ting last and also KPI Tucows our scorecard is advise for Build along the which as with Investors summary metrics six the available to in would and presentation. section updated that quarterly businesses XXXX, the We XXXX well of XXXX website as investor for updated all the
in risks financial with a prepared news the Management's the August On for news the factors read materially. in ended company's release detail its risk and on quarter security XX-K forms recent website filed remarks. description Elliot documents urges cause actual its uncertainties to most company's company's include section. The filings discussion that release financial That differ the XX-Q. Investors issued are full results Elliott. for you business. to to Now statements These may company President to specifically applicable SEC, X, over June reporting reports are Please described to note Thursday, for results forward-looking the Executive statements, the XXXX. such and second tucows.com the the the as available the Tucows a would XX, ahead, following now for the and at like could that which risk I turn Chief and Tucows' Noss. call of Go Officer, factors under its subject are on
Monica. Tucows segments. of performance three overall, for marked and of each quarter our solid Thanks, for business QX another
past moving by well CapEx and our margin on by the in saw benefiting the is key internet our in largest base. continued impact last record is the profitability. on year, the in gross from model. quarter as expectations forward of business as growth and for Our impact another far domains maximizing overall services generated under management across pandemic growth metrics, impact addresses our Mobile subscriber line services including spend, MSC with the and of contributing focus of plan And domains performances the
that compared is And adjusted compared or operational associated second and with with Turning $X.X for the resulted section. increased expenses to $X.XX was comparative up number drive fiber X% his non-recurring take details last last other revenue all more in growth million, our with investments a from year, excluded for increased Total for that compared spend last year non-cash MSC compared share, the CapEx number model. a mobile $XX.X for shift $X.X in the The of of can discuss were million, and $XX.X now QX from Revenue customers in revenue items year. OpEx in do to million our with and million mobile through the year-over-year how just to the million to you from $XX.X or the each margin with same $X.X by impact not and mobile $X.XX Those non-cash and results two gross lower. to to businesses in early our income change for decrease in again QX Net last income of million this in the reminder QX and $XX.X increased remarks. quarter of fiber the last legacy remind of per with a a fuel revenue our million second was our internet flow as X% domains reported for $X.X impacted in and QX with MSC in on to XXXX billion fiber, was year. results much year, domains business other growth primarily August of to the in include share, was will income. the detail $XX.X due was statement result XXX,XXX businesses $X.X or million. of excluding for million, compared last the million results, QX net services charges spend subsumed flow the Cash a for the EBITDA total of almost our and the management with our will included charges operations Dave $XX.X million shift the share. model financial business QX year. refer margin quarter gross that income the mobile period margin $XX in I And looking refresher was in $XX.X purposes that gross of our
just Turning quarter, our with $XX.X again adjusted of to margin now Revenue individual Domain to Services. QX and another once was businesses, overall million. over both starting business. X% of the gross highlighting the solid X% with up year-over-year EBITDA consistency were
from X% generated by look the pandemic QX year, both however, type to emerged still given of for Domain around the dissipated, optimize above outsize business the the steady wholesale renewal has that well pandemic to and of of healthy and business in channel, to the wholesale the we as into X% performance for the the the we QX less margin, to average, expected benefit that volumes the due up efficiently. was we as sense as to it XXXX, transaction and outsized the the but wholesale expect on next QX focus levels continue down component gross this margin, makes saw as of normal the industry our quality With the period base year gross at of having our customer of recent rate, level a from it the in channel or transaction year. benefit, highs X%, pandemic were to settled new a and the year. compared Services and for XX%, some year-over-year first respectively, in revenue for rate for historical In channel, of as state same outsized operating now having more growth X% for this our last QX million for pandemic benefitting renewal XXXX. were of X QX QX registrations, will return related down Renewals The XX% for Total spike registrations is number our of last renewals. year,
slightly last of the accentuation our period of for DISH the revenue margin our strong retention another meet well business, rates increased gross New mainly QX the for continue base both be this X% solidly by business XXX,XXX our This with last of QX dish quarter, the ongoing XX% our for pleased quarter of focus first with the about the of pandemic, quarters, where XXXX business. the services for proven but Total we wholesale of XX%. of business business mentioned. an was the above high component year. under were channel revenue become TSA. a that several registrations our outsized continuing just XX% X% of with leading what value relative retail. due for the to We're were our on activity work structure our compared as year-over-year retail component compared built Domain Gross quarter industry retail the channel and in up period for state is and registrations TSA. to has call. assumption renewal higher we down performing and from year new better In unchanged the milestones for of year DISH is correct an stream they XX% from I start under Again It were registrations from nearly customers normal XXX for expectations, to transactions wholesale mobile added transition driven the the for year, trend services the up requirements also gross QX the The quarter and Five again, in have quarters both to quarter and part the for standards the strong to service. we wholesale to X%. returned team Services registration essentially the aggressive correct. with of of continued XX% to enough flat pricing however, last were customer same of The total down retail known MSC to QX and be year was on down this the XX%, now the the the names wholesale this the saw team importantly, customers I levels, simplify average. of transition that X% through was second of our the it to retail retail more performance performance up wholesale In if discussed for margin very previous the our will year, margin to domains last rate QX have providing pandemic. down strategy I Legacy essentially owns, transition to combination for brand channel to more had to our fulfilling which now expiry being last current the the for a platform to new has correcting to domains that remains million
strategic XX, network, TV to to dishes primary network July will the customers retail Ting the agreement Mobile wireless satellite this the customers signing wireless on announced DISH XG retail agreement, of including services markets, term services. services DISH where rural current Republic agreement with through to of wireless AT&T T-Mobile, the for addition its and wireless AT&T future distribution new in expansion of provides network a long AT&T partner access breads, DISH Importantly, DISH MBNO and accelerates making DISH network, provide
already all forcing settling for to the best dish with this both their here end dish one I'll Last to T-Mobile is with costing deliver provider our for the moves this a share moving built best further, subscribers will fourth come to migrate with will help US. evidence success. player and mobile This more is relationship migration Ting reasons my This mobile and making our the sprint the the both impacts closing every note we long is T-Mobile mentioned although in disclosures. of address of One Ting outstanding on a in the the and to DISH For that marriage as this is even from success postpone us us time base on by steady necessary information is state still delayed thing as AT&T Boost and Boost term should into with but business the their DISH business issue and the quarter, major to and customer flows. shotgun advised on becoming time. this further thoughts comments. mitigate. from the at that amount again, bases subscribers, including a And real compressed work subscribers, previously, of I've requirements of our money the those year, revenue grow
on Ting to Moving internet.
our business accelerated. QX, in starting to and of work end of XX,XXX scale QX five To XXXX. the has XX,XXX a see the hit are subscribers XXXX of at business, of of We to of in the XX,XXX years milestone how fruition. the QX we context to business In We put hit in really come pace our subscribers.
our subscribers in QX date largest at was also QX. quarter of an XX% gain of for increase to This net
new past bringing addresses XXXX also a XX,XXX from We a in addresses total date to with XX,XXX and set past increase to in of QX, was record addresses. serviceable largest us addresses our QX
also the our as laying is the scale high to and hiring satisfaction. in have have to I'd investment recently have that we enjoyed we say lit with so and of that generate first our point, levels them, planned, transforming to CapEx allow primitives build customer material compared efforts I service. is building continues losing the focus and our that of This like Seeing Culver City, trenching XX% QX using we on QX burden how with setting Our XX% date, capacity, with announced with remind associated QX built have California and added market efficiently. continued to in business then never market network scale network network at we business a November and lit XXXX. increase will to Began the July work customer grow and the publicly the and much. to To to trending last investors this in faster and revenue upwards stage operate our building micro year, I the live more from to beginning XX. a ISP March, the XX money fastest
accelerating, there as micro build to in XXXX. machine for Centennial first are the And complete will maximum are processes of a we allow using as I'm We business deployment implement refine further to our and metrics. We're that the expedite continuing our the Colorado. also but build these pleased extremely now trenching KPIs both our result, of I've acceleration to we to and see of expect visibility remainder said, efficiency, our operation scalability. half refining in and
ensuring We continue network cost. investors tools and provide to trenching us operations. and our helps to to secure our of chain build want micro continues much about It's about bring to customers. reduced supply trenching build our that micro track remind and on integrate is our expand. automate And practice into robust I time reducing work. that do for is not that pre We're visibility network streamline
pandemic. will building country trenching markets. for us This first say you funded mention the Tings Americans service Congress timelines supporting the critical December a have by stimulus leveraging at from evaluating pay accelerated mention of micro allocated opportunities. I like It's vastly that my and the broadband me sources of and to when the us partners of I'm in of access government broadband not one would package to to EBB. build is to to cohort looking fiber quickly. affordability billion the or funding You benefit time markets, internet money the foray $X.X the also broadband inaugural aims across heard increased interest players for by tool recall emergency has deploy also as to industry during and find for of and help capital struggling Many for XXXX into increase
As implement were their a will program as from internet Ting We available on customers. part the us able have duration of necessary $XX to monthly up the to and in launched of to immediately soon in program. receive enable credit bill it funds first the as up internal signing the for the EBB customers to saw participant Patient the the May, it internet government processes was We June. Eligible flow
turn worse under gig less we side divide, providing that this those detail, those the every symmetrical the review needs unlike I or provider, close Importantly, other of believe side. is what I'd do now other We the to call most the over more of wrong that on will results the share CFO the on are have as well. regulatory program in Singh subsidized. environment our to a not digital like greater for full deserve internet the in Dave? Dave to our financial quarter
QX managed. premise, resources, mobile are Thanks, reporting items other legal, These adjusted based remind each stock our structure fiber as Certain our Elliot. the the to IT, of three I they of the expense amortization costs into Services centrally this on Domain are at to and beginning depreciation, services, corporate interest EBIDTA each reporting excluded in reorganize internet operations. down finance, we and outset compensation you services want we the expense, which line. segments, include year, of for expense corporate but for income monitored from and as destiny segment part are not segment now human
financial structure to provide. prior reflect been Our segment segment, and periods comparative reclassified results the period have adjusted EBITDA also new
results quarter mobile once outset, X as model business second impact again Elliott at of year. August our addition, MC of transition noted on of the last our the the the In reflect to
wholesale the we with included the other are Expenses associated revenue income. does benefit retail that also relationships intended the growing decreased more the sold DISH year-over-year. reminder, that not Operating and was and so as All of result decreases transition, not no margin staff staff the much customer longer accurately only because of and therefore model expenses margin were DISH, owns base retail to base. a eliminate As on spends a that now of this build legacy from gross portion retail retail transition therefore mobile the mobile associated operate Tucows with Or of and a significantly customer with to previous to business. as consists
We performance are overall DISH view of business. Tucows provide earnings however, and on adjusted including year-over-year such, our the as results may operating a better in those adjusted the
Ting to the of of of our base now X% in continued growth as quarter decrease Turning results, customer as X% in of internet a grow second million to business of for XXXX. X $XX.X second sale by That year. domains as last in the revenue the or quarter or decrease decrease XXXX $.X offset revenue up August The $X.X strong year-over-year. growth and subscriber well relationships was total million the million partially $XX.X on XX% from T-Mobile continues of result or the is fiber million the year-over-year
MSE combined of Excluding to revenue the that million the lower X% internet shift a ago of I to due decreased network domains for for moment with QX for Cost primarily million in businesses described fiber $XX.X the decline last revenues to the revenue. $XX.X impact mobile business from the the X%. a costs period increased model the same for and year,
due As XX%, to revenue million decrease in costs quarter Gross a T-Mobile sale lower relationships. as a of the the of of revenue revenue to percentage to relative Margin decreased from to XX% to million, for attributable entirety network revenue. fiber for from customer increased but mainly the network or [indiscernible] percentage of the $XX mobile second $XX.X is year-over-year XX% higher of costs a costs for revenues mixture increase the
the gross services margin businesses and to costs the last and $XX.X business. mobile from year. business individual Services fiber As Domain million XX% via domain QX before up combined Services for relevant last a now second margin internet each internet increased from again for comparison, was margin $XX.X T-Mobile network XXXX the the a percentage costs gross of of revenue excluding year-over-year to for cross of for fiber Domain network review second margin year, XX% for the once the $XX.X before year to X% quarter Starting with decreased gross more million. I'll million X% services for quarter
As a margin at year for XX%. of percentage was QX revenue in unchanged Services gross Domain last
X% our domain QX million under result for million year of for That Within to the year year. the margin business last the combined increases domains gross to increased the of in wholesale management over the margin. the managing gross and for $XX.X channel business number services growth success in $XX.X
of a Services margin XX%. increased wholesale from to margin of and revenue for XX% for Domain retail the gross $X.X X% million As percentage million Gross $X.X QX XXXX. channel for to decreased
As this decrease and QX in of customers business. wholesale transition from the Elliott their of a of mentioned earlier, retail of number the to this business year domains significant was IEM a much result of a
gross percentage XX% a revenue margin As year. greater than of QX in was last XX%
million this services the that as QX included mobile margin note I as revenue is gross during compared unbundled in $X.X difference $X.X T-Mobile from in year, $X.X we up of services quarter For to million primarily with million the sale of recognize the will part last professional $X.X attributable was the fees. for DISH. QX significantly but year million MSC QX here customers platform the
on the a customer the in other transaction, treatment of As base, million. income we is and of the DISH statement on recognized of per as customer sale that gain $X.X burnout assets income. T representative accounting It's the generate
up gross last to services margin internet from $X.X year. X% fiber to million increased million For X.X
their supplies business. network. to buildup modest related capitalization, access being well the personnel of as the explained of quick and again, last subscriber revenues physical increase customers, costs including relative increase field these end subscriber construction fiber guarantees of in base factors bandwidth equipment vehicle in gross the for revenue impacted Other IPTV sundry quarter as installation, and delivery margin is parties network and personnel and third the overall of and paid the related cost field consumed that I of fiber drivers by partnerships to prior and A adjustments costs, products, the beach any to capitalization to Westminster long the a the relatively costing building of such sold same include As incurred number use networks the expenses and hence repair small the And Hardware to related to the the period. to as fiber generated routers, over inventory are of and net equipment costs fees bulletin or the service include cost reminder, following items. network. related expenses, expenses never on a and and
same As to network quarter that factor I second intranet TV, million last to costs. for included a up gross XX% from The year. for primarily to million year. $XX.X timing of write is XX% X% of expenses XXXX XX%. of that decreased the expenses revenue of will a of X% of $XX.X of million relative second you million fiber for from the were the operating period to increased quarter decrease revenue the percentage million last $X.X decreased down of XXXX, a excluding quarter remind margin related to second incursion Ting expenses Network for last $X.X $X.X down the QX Overall year for write year-over-year. to the
fees professional by up decreased the mainly exchange bad million. the debts X.X million. driven were million compensation of increase based Ting X.XX non-cash People lastly, assets Amortization result to up while costs mobile quarter fees of were million business or costs mobile $X.X in increased and the transition platform X.X the Stock decreased and million increases operating due by million Ting marketing foreign the onetime expansion, X.X by workforce included credit bill each to XXXX and expenses year. million in this certain last the net another were was X.X% following. MSC base internet up including of X.X legacy to of intangible related mobile the million expenses X.X costs vulnerability the being related intangible QX business million impairment to assets by by there costs the breakdown X.X Excluding assets decreased growth increase with income, card X.X offset of And impacts. related support subscriber
million market qualify or that to in QX contracts X.X Specifically, of a of of last in year, convert measurements had loss resulting we accounting a year-over-year currency to XXXX million. $X.X loss related million QX hedge X.X mark gain re forward for in a to do of not
revaluation addition, foreign liability assets quarter In X.X which quarter, the of loss monetary impact decreasing the basis. on had denominated experienced and this to on million of we million loss expenses the a second compared X.X XXXX, the million a of year-over-year of our X.X in
operating increased quarter million a of income for million $X.XX $X.XX slightly As for second percentage revenue, expenses X.X XXXX. to or per XX% from the share, was XX%. with XXXX or per X.X compared Net of QX share
million. lesser QX were for As The higher last build, the a quarter investments, the million million $XX.X segments share, increased the network EBITDA XXXX shared fiber our million breaks Domain EBIDTA from indicator extent That impact earlier. remaining rate in in mobile resulted for we've for included year. Adjusted year-over-year last lower $XX.X excluding in higher described increased the I services last model, the XXXX services $XX.X outset, year. of corporate the business fiber Adjusted to reflects and for given net the adjusted charges a effective million as XX% $X higher driven QX $X.X amortization the revenues the income the period year-over-year costs in offset $X.X which of income of QX X% million million million increase MSE year. the model. for down X% the of professional by is which that QX QX result is increase for from for services, that positive transition $X.XX follows. of The But our at nonrecurring ting year-over-year year. to year-over-year XXXX. The nonrecurring EBITDA that expense million was was QX income lower per out the was year change the same primarily $X.X $X.X number to amongst QX of the $XX.X tax decrease second net noted Services compares low of for a EBIDTA interest to expenses, year-over-year to by mobile performance to of from last million charges from the Adjusted due to non-cash or in $X.X our in line EBIDTA net best related last excluded is primarily business
Finally, $X.X is million, was last higher support adjusted for for loss fiber year. accelerated negative negative in compared a million $X.X QX expansion of costs the services the of EBIDTA bidder business. required result fiber internet to The to QX the higher
sheet the from $X.X balance were of million year. second the first QX our quarter at down end million million cash the equivalents and of at to Turning $X.X of down $X.X of end at and cash the from last year end quarter the this
cash during flow of majority Canadian installments operations, in of in year-over-year QX pandemic. $X.X million prepaid EBITDA impact the the early cadence factors $X.X an last from of in generated [ph] higher from compared days the number a we the and XXXX cash but internet, fiber balances in our the installments increase bill, year the QX operations deferral QX of cash During with fabrication last million related QX including in and Revenue inventory allowed were to higher monthly that year. tax QX Agency [ph] investment, as There
All of collections. by this accounts was partially offset better receivable
team options. an draw related investment stock and from the and our ongoing on not primarily fiber We net sources $XX by of offset equipment generate million out, investments cash million bailed the of well to loan the property and built. in other exercise also $X.X as and a as $XX each These were down million MSE platform
year, I'll first And to second million down Elliot. the year. X% concludes back the from end to of was second Finally, the quarter of quarter deferred as turn $XXX now end compared of at it the $XXX the flat end remarks. effectively at and last the revenue quarter of of my million That this
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to an even I could We and smaller importantly, two see We quarter has parallel. been seeing will talked is I when these the and more this and flow things buy ISP of midsized as deal. of five as years the about I more covered. now details why how news DISH are what biggest eyes. our consolidation. will and of AT&T in years the will for through Most deal partner five share building happening be this in well means here recount greater premium. not telecom But Probably it at US the have
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think deal T-Mobile And not lot be as that DISH whether this the T-Mobile a in that. that AT&T of This our about partner was the with dealt suggests minimized without of or thinks will We with It what says the XG. how let the view, is the the profitability very approached leaving puts Americans. needs And analyst have succeed the terms that all validation us how biggest paraphrase, how telecom off have successful. them we of industry with of success. as we that XXX in in of subs this feedback I us. a of quotes, also context this the cynical brand. chances three million have Thankfully, interesting of AT&T was of AT&T But of at and is dealt dishes hook It would for a of a to ahead talked least one regard, or companies terms partner, dish in dish with been both a position that of deal. DISH on critical this or with in I will is huge legacy seen bet course, most we has
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