Tucows Reports Financial Results for Fourth Quarter 2023
"We finished 2023 at the high end of our range for Adjusted EBITDA guidance, a result driven by robust growth from Wavelo and consistent performance of Tucows Domains," said
Financial Results
Consolidated net revenue for the fourth quarter of 2023 increased 10.2% to
Gross profit for the fourth quarter of 2023 increased 4.8% to
Net loss for the fourth quarter of 2023 was
Adjusted EBITDA1 for the fourth quarter of 2023 decreased 62% to
Summary Financial Results
(In Thousands of US Dollars, Except Per Share Data)
|
3 Months ended |
12 Months ended |
||||
2023 |
2022 |
% Change |
2023 |
2022 |
% Change |
|
Net Revenues |
86,958 |
78,909 |
10.0 % |
339,337 |
321,142 |
5.7 % |
Gross Profit |
17,821 |
17,010 |
4.8 % |
66,667 |
78,248 |
(15) % |
Income Earned on Sale of Transferred Assets, net |
4,062 |
4,498 |
(9.7) % |
17,033 |
18,507 |
(8.0) % |
Net Income (Loss) |
(23,374) |
(13,445) |
(74) % |
(96,197) |
(27,571) |
(249) % |
Basic earnings (Loss) per common share |
(2.14) |
(1.25) |
(71) % |
(8.85) |
(2.56) |
(246) % |
Adjusted EBITDA¹ |
2,554 |
6,700 |
(62) % |
15,451 |
37,590 |
(59) % |
Net cash by (used in) operating activities |
9,003 |
2,901 |
210 % |
(4,771) |
19,876 |
(124) % |
1. This Non-GAAP financial measure is described below and reconciled to GAAP net income in the accompanying table. |
Summary of Revenues, Gross Profit and Adjusted EBITDA
(In Thousands of US Dollars)
|
Revenue |
Gross Margin |
Adj. EBITDA¹ |
|||
3 Months ended |
3 Months ended |
3 Months ended |
||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|
Ting Internet Services: |
||||||
Fiber Internet Services |
13,821 |
11,470 |
7,881 |
7,211 |
(12,366) |
(6,011) |
|
|
|
|
|
|
|
Wavelo Platform Services: |
||||||
Platform Services |
9,545 |
4,479 |
9,214 |
3,807 |
|
|
Other Professional Services |
0 |
0 |
0 |
0 |
|
|
Total Wavelo Platform Services |
9,545 |
4,479 |
9,214 |
3,807 |
2,604 |
(1,142) |
|
|
|
|
|
|
|
Tucows Domain Services: |
||||||
Wholesale |
|
|
|
|
|
|
Domain Services |
48,279 |
46,742 |
9,968 |
9,577 |
|
|
Value Added Services |
4,184 |
4,583 |
3,661 |
3,981 |
|
|
Total Wholesale |
52,463 |
51,325 |
13,629 |
13,558 |
|
|
|
|
|
|
|
|
|
Retail |
9,348 |
8,943 |
5,229 |
4,844 |
|
|
Total Tucows Domain Services |
61,811 |
60,268 |
18,858 |
18,402 |
10,794 |
10,568 |
|
|
|
|
|
|
|
Corporate: |
||||||
Mobile Services and Eliminations |
1,781 |
2,692 |
(501) |
244 |
1,522 |
3,285 |
|
|
|
|
|
|
|
Network Expenses: |
||||||
Network, other costs |
n/a |
n/a |
(7,584) |
(4,245) |
n/a |
n/a |
Network, depreciation of property and equipment |
n/a |
n/a |
(9,533) |
(7,969) |
n/a |
n/a |
Network, amortization of intangible assets |
n/a |
n/a |
(371) |
(378) |
n/a |
n/a |
Network, impairment |
n/a |
n/a |
(143) |
(62) |
n/a |
n/a |
Total Network Expenses |
n/a |
n/a |
(17,631) |
(12,654) |
n/a |
n/a |
|
|
|
|
|
|
|
Total |
86,958 |
78,909 |
17,821 |
17,010 |
2,554 |
6,700 |
1 This Non-GAAP financial measure is described below and reconciled to GAAP net income in the accompanying table. |
Notes:
1. Adjusted EBITDA
The Company believes that the provision of this supplemental non-GAAP measure allows investors to evaluate the operational and financial performance of the Company's core business using similar evaluation measures to those used by management. The Company uses adjusted EBITDA to measure its performance and prepare its budgets. Since adjusted EBITDA is a non-GAAP financial performance measure, the Company's calculation of adjusted EBITDA may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Because adjusted EBITDA is calculated before certain recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a liquidity measure. Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies and/or analysts and may differ from period to period. The Company endeavors to compensate for these limitations by providing the relevant disclosure of the items excluded in the calculation of adjusted EBITDA to net income based on
The Company's adjusted EBITDA definition excludes depreciation, impairment and loss on disposition of property and equipment, amortization of intangible assets, income tax provision, interest expense (net), accretion of contingent consideration, stock-based compensation, asset impairment, gains and losses from unrealized foreign currency transactions, loss on debt extinguishment and costs that are not indicative of on-going performance (profitability), including acquisition and transition costs. Gains and losses from unrealized foreign currency transactions removes the unrealized effect of the change in the mark-to-market values on outstanding unhedged foreign currency contracts, as well as the unrealized effect from the translation of monetary accounts denominated in non-
The following table reconciles income before provision for income taxes to Adjusted EBITDA (dollars in thousands):
|
3 Months ended |
12 Months ended |
||
2023 |
2022 |
2023 |
2022 |
|
Net income (Loss) for the period |
(23,374) |
(13,445) |
(96,197) |
(27,571) |
Less: |
|
|
|
|
Provision (recovery) for income taxes |
(1,316) |
(1,006) |
(6,873) |
(217) |
Depreciation of property and equipment |
9,661 |
8,124 |
36,431 |
28,187 |
Impairment of property and equipment |
143 |
62 |
4,822 |
553 |
Amortization of intangible assets |
2,728 |
2,866 |
10,829 |
11,394 |
Interest expense, net |
12,651 |
5,901 |
41,771 |
14,456 |
Loss on debt extinguishment |
- |
- |
14,680 |
- |
Accretion of contingent consideration |
- |
50 |
- |
248 |
Stock-based compensation |
1,528 |
3,203 |
8,134 |
7,599 |
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities |
(316) |
(166) |
(62) |
281 |
Acquisition and transition costs* |
849 |
1,111 |
1,916 |
2,660 |
|
|
|
|
|
Adjusted EBITDA |
2,554 |
6,700 |
15,451 |
37,590 |
* Acquisition and other costs represent transaction-related expenses, transitional expenses, such as redundant post-acquisition expenses, primarily related to our acquisitions, including Simply Bits in
Management Commentary
Concurrent with the dissemination of its quarterly financial results news release at
Following management's prepared commentary, for the subsequent seven days, until
About
This release includes forward-looking statements as that term is defined in the
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