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Tucows Inc (TCX)
NASDAQ:TCX
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Tucows
(NASDAQ:TCX)
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Rating:48Neutral
Price Target:
$18.50
▼(-2.63% Downside)
Tucows' overall stock score is primarily impacted by its financial performance challenges, including negative profitability and high leverage. Despite strong earnings call results with revenue and EBITDA growth, the technical analysis and valuation metrics reflect a cautious outlook. The company's strategic shifts and debt reduction efforts are positive, but significant financial risks remain.
Tucows (TCX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$207.39M
Dividend YieldN/A
Average Volume (3M)18.78K
Price to Earnings (P/E)―
Beta (1Y)1.16
Revenue Growth7.88%
EPS Growth-3.72%
CountryUS
Employees765
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-1.47
Shares Outstanding11,078,410
10 Day Avg. Volume28,312
30 Day Avg. Volume18,776
Financial Highlights & Ratios
PEG Ratio-0.13
Price to Book (P/B)-1.97
Price to Sales (P/S)0.52
P/FCF Ratio-2.47
Enterprise Value/Market Cap3.88
Enterprise Value/Revenue2.13
Enterprise Value/Gross Profit8.99
Enterprise Value/Ebitda44.76
Forecast
1Y Price Target
$18.50Price Target Upside-2.63% Downside
Rating ConsensusHold
Number of Analyst Covering0
Tucows Business Overview & Revenue Model
Company DescriptionTucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in Canada, the United States, and Europe. It operates through three segments: Fiber Internet Services, Mobile Services, and Domain Services. The Fiber Internet Services segment provides fixed high-speed Internet access services to individuals and small businesses primarily through the Ting website, and other billing solutions to small internet service providers. The Mobile Services segment offers mobile phones and retail telephony services; and professional services, including implementation, training, consulting, and software development and modification services, as well as operates Mobile Services Enabler platform that provides network access, provisioning, and billing services. The Domain Services segment provides wholesale and retail domain name registration services; portfolio services; and value-added services, such as hosted email, Internet security services, Internet hosting, WHOIS privacy, publishing tools, and other value-added services for end-users under the OpenSRS, eNom, Ascio, and Hover brands. The company was formerly known as Infonautics, Inc. and changed its name to Tucows Inc. in August 2001. Tucows Inc. was incorporated in 1992 and is headquartered in Toronto, Canada.
How the Company Makes MoneyTucows generates revenue through multiple streams, primarily from its domain name registration services, which include the sale and management of domain names for individuals and businesses. This sector is bolstered by the sale of additional services such as web hosting and email solutions, which provide recurring revenue through subscription models. Additionally, Tucows earns income from its Ting mobile service, where it charges customers for wireless plans and services. The company has partnerships with various registrars and resellers, expanding its reach in the domain registration market. Factors contributing to its earnings include the growing demand for online presence among businesses, customer retention through value-added services, and strategic marketing initiatives that enhance brand visibility.
Tucows Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
Tucows presented a strong Q2 with significant revenue and EBITDA growth across its business units. Domains and Wavelo showed robust performance, while Ting made progress in subscriber growth despite an EBITDA loss influenced by a non-cash adjustment. The company successfully reduced debt and sold non-strategic assets, indicating a positive strategic shift. However, there were minor declines in domains under management and challenges in Ting's profitability and conversion metrics.Q2-2025 Updates
Positive Updates
Consolidated Top Line Growth
Tucows reported a 10% year-over-year increase in Q2 revenue, marking the fourth consecutive quarter of double-digit top line growth.
Adjusted EBITDA Increase
Adjusted EBITDA increased 37% to $12.6 million in Q2 and $26.2 million year-to-date, slightly ahead of the pace needed to achieve the full-year guidance of $47 million.
Domains Business Performance
Tucows Domains delivered an 8% increase in revenue, 14% growth in gross margin, and a 12% rise in adjusted EBITDA year-over-year.
Wavelo's Record Quarter
Wavelo achieved its best quarter since inception with a 20.5% increase in revenue to $12.7 million, a 23.6% rise in gross margin, and a 37% increase in adjusted EBITDA year-over-year.
Ting's Subscriber Growth
Ting reported a 12% increase in revenue to $16.4 million, driven by an 8% increase in subscribers.
Debt Reduction
Corporate net debt decreased for the fifth consecutive quarter to $190.3 million, with net leverage at 3.14x and interest coverage at 3.99x.
Successful Sale of Non-Strategic Assets
Tucows successfully sold non-strategic assets for $15 million in three transactions and additional assets for $7 million post-Q2, supporting the transition to a pure-play ISP.
Negative Updates
Decline in Domains Under Management
Total domains under management and transaction volumes declined modestly by 2% and 3%, respectively, due to a reseller moving a portion of its portfolio in-house.
Ting's Adjusted EBITDA Loss
Ting reported an adjusted EBITDA loss of $3.7 million for the quarter, exacerbated by a $2.7 million non-cash lease expense adjustment.
Challenges in Subscriber Conversion
Despite improvements, Ting's conversion metrics and marketing efficiency still highlight challenges in subscriber acquisition and cost management.
Company Guidance
In the second quarter of 2025, Tucows reported a 10% year-over-year increase in revenue, reaching $98.5 million, marking its fourth consecutive quarter of double-digit growth. The company's gross profit rose 6% year-over-year to $22.1 million, while adjusted EBITDA increased by 37% to $12.6 million for the quarter, and $26.2 million year-to-date, positioning the company slightly ahead of its full-year adjusted EBITDA guidance of $47 million. Tucows' net debt decreased for the fifth straight quarter to $190.3 million, resulting in a net leverage of 3.14x and an interest coverage ratio of 3.99x. The Domains segment saw an 8% revenue increase to $67.6 million, with a 14% rise in gross margin, while Wavelo achieved a 21% revenue growth to $12.7 million, with a 24% increase in gross margin. Ting's revenue grew 13% to $16.4 million, driven by an 8% increase in subscribers, although it reported an adjusted EBITDA loss of $3.7 million. The company emphasized its strategic pivot towards a capital-light, partner-focused model, with ongoing efforts to optimize marketing and reduce operational expenses.Tucows Financial Statement Overview
Summary
Tucows is experiencing revenue growth, but significant profitability and financial structure challenges persist. The income statement shows negative margins, the balance sheet reflects high leverage and negative equity, and cash flow analysis indicates liquidity issues. The company needs to address these financial weaknesses to improve its overall financial health and stability.Income Statement
Tucows has shown a modest revenue growth rate of 2.45% in the TTM period, indicating some positive momentum. However, the company is facing significant profitability challenges, with a negative net profit margin of -26.67% and an EBIT margin of -9.19%. The gross profit margin is relatively low at 23.63%, suggesting pressure on cost management. Overall, the income statement reflects a company struggling with profitability despite revenue growth.45
Neutral
Balance Sheet
The balance sheet reveals a concerning financial structure with a negative stockholders' equity, leading to a negative debt-to-equity ratio of -4.76. This indicates high leverage and potential financial instability. The return on equity is positive at 136.01%, but this is due to the negative equity base rather than operational efficiency. The equity ratio is negative, highlighting the company's reliance on debt financing. Overall, the balance sheet suggests significant financial risk.30
Negative
Cash Flow
Cash flow analysis shows a negative operating cash flow of -$14.04 million in the TTM period, indicating cash flow challenges. The free cash flow to net income ratio is high at 2.88, suggesting that despite negative net income, the company is generating some free cash flow. However, the negative free cash flow growth rate of -32.31% raises concerns about cash generation sustainability. Overall, the cash flow statement reflects liquidity issues and potential cash management challenges.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 378.47M | 362.27M | 339.34M | 321.14M | 304.34M | 311.20M |
| Gross Profit | 89.54M | 83.03M | 108.86M | 78.25M | 78.29M | 85.48M |
| EBITDA | 17.99M | -1.82M | -12.19M | 26.25M | 211.34M | 33.64M |
| Net Income | -95.54M | -109.86M | -96.20M | -27.57M | 3.36M | 5.78M |
Balance Sheet | ||||||
| Total Assets | 742.18M | 758.80M | 798.43M | 664.75M | 539.60M | 451.90M |
| Cash, Cash Equivalents and Short-Term Investments | 52.02M | 56.90M | 92.69M | 23.50M | 9.11M | 8.31M |
| Total Debt | 521.68M | 635.28M | 568.29M | 256.01M | 205.75M | 132.67M |
| Total Liabilities | 863.87M | 854.10M | 788.55M | 568.09M | 424.50M | 347.20M |
| Stockholders Equity | -121.69M | -95.30M | 9.88M | 96.66M | 115.09M | 104.70M |
Cash Flow | ||||||
| Free Cash Flow | -49.34M | -76.20M | -97.35M | -117.62M | -44.31M | -8.43M |
| Operating Cash Flow | -14.04M | -19.75M | -4.77M | 19.88M | 29.64M | 36.08M |
| Investing Cash Flow | -23.60M | -56.49M | -92.58M | -137.49M | -101.98M | -53.28M |
| Financing Cash Flow | 54.05M | 44.50M | 178.84M | 132.01M | 73.14M | 5.12M |
Tucows Technical Analysis
Positive
19.00
Price Trends
19.12
Negative
19.19
Negative
18.11
Positive
Market Momentum
-0.05
Negative
54.91
Neutral
75.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCX, the sentiment is Positive. The current price of 19 is above the 20-day moving average (MA) of 18.31, below the 50-day MA of 19.12, and above the 200-day MA of 18.11, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 54.91 is Neutral, neither overbought nor oversold. The STOCH value of 75.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TCX.
Tucows Risk Analysis
Tucows disclosed 36 risk factors in its most recent earnings report. Tucows reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tucows Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | 6.70B | -63.63 | -30.14% | ― | 14.29% | -14.42% | |
69 Neutral | 8.08B | 18.82 | -37.18% | ― | -0.04% | -5.07% | |
67 Neutral | 46.16B | -1,078.64 | -2.31% | ― | 23.31% | 31.04% | |
59 Neutral | 20.47B | 25.48 | 199.93% | ― | 8.09% | -54.94% | |
48 Neutral | $207.39M | ― | 171.00% | ― | 7.88% | -3.72% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
TCX
Tucows
19.00
-1.34
-6.59%
VRNS
Varonis Systems
58.30
1.25
2.19%
GDDY
GoDaddy
142.99
-14.78
-9.37%
ZS
Zscaler
289.29
115.14
66.12%
DBX
Dropbox
30.76
5.83
23.39%
Tucows Corporate Events
Private Placements and Financing
Tucows Extends Credit Agreement with Bank of Montreal
Neutral
Sep 10, 2025
On September 8, 2025, Tucows Inc. and its subsidiaries entered into a one-year Extension Agreement with the Bank of Montreal, extending their existing Credit Agreement until September 22, 2027. The agreement maintains the revolving credit facility terms, including a $240 million commitment and the potential for a $60 million increase, while amending certain definitions related to financial covenants.
The most recent analyst rating on (TCX) stock is a Hold with a $18.50 price target. To see the full list of analyst forecasts on Tucows stock, see the TCX Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.