Tucows Q2 2024 Prepared Remarks Earnings Report

Tucows EPS Results

• Actual EPS: -$1.70
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Tucows Revenue Results

• Actual Revenue: $89.42 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Tucows Announcement Details

• Quarter: Q2 2024 Prepared Remarks
• Date: 8/8/2024
• Time: N/A
• Conference Call Date: Thursday, August 8, 2024
• Conference Call Time: 5:05PM ET

Tucows (NASDAQ:TCX) (NASDAQ: TCX) is a diversified internet services company primarily known for its domain name registration and management business. Through its Domain Services division, Tucows operates leading reseller platforms such as OpenSRS and Enom, offering domain registration, SSL certificates, email hosting and related value-added services to web professionals, small businesses and enterprise partners worldwide. The company’s platforms enable thousands of resellers to provide branded internet services to their customers, leveraging Tucows’ infrastructure and expertise in the domain name system.

In addition to domain services, Tucows has built a growing portfolio of consumer-facing internet access offerings under the Ting brand. Ting Mobile operates as a mobile virtual network operator (MVNO) in the United States, delivering flexible, no-contract cellular plans. Meanwhile, Ting Internet provides fiber-to-the-home broadband services in select North American markets, focusing on gigabit-speed connectivity and customer experience. These ventures reflect Tucows’ broader strategy to expand beyond wholesale domain services into retail internet access and communications.

Originally founded in 1993 by Scott Swedorski, Tucows evolved from one of the first shareware download sites into a global internet infrastructure provider. The company is headquartered in Toronto, Canada, with additional offices in Charlottesville, Virginia, and other locations to support its international operations. Over the years, Tucows has distinguished itself through a combination of platform scalability, strategic acquisitions and a focus on customer-centric service delivery.

Under the leadership of President and CEO Elliot Noss, Tucows continues to pursue both organic growth and opportunistic investments in technologies that complement its core services. With a track record spanning over two decades, the company maintains a commitment to innovation in domain management, communications and high-speed connectivity, serving a diverse customer base across multiple geographies.

Tucows Q2 2024 Prepared Remarks Earnings Call Transcript

Key Takeaways

• Consolidated Q2 2024 net revenue rose 5.2% year-over-year to $89.4 M, gross profit increased 15.4%, adjusted EBITDA jumped 70%, and $6.5 M of syndicated debt was repaid.
• Domains revenue grew 4% to $62.4 M with a 76% renewal rate, adjusted EBITDA up 6% to $11.2 M, and new Registry wins including dotmusic and DotLocker launches.
• Wavelo delivered Q2 revenue of $10.5 M, adjusted EBITDA of $3.9 M (+14% year-over-year), accelerated its shift to recurring platform revenues, and introduced a modular Product Catalog for telecom clients.
• Ting fiber added 2,100 net subscribers (+10.5% yoy) and expanded serviceable addresses 17.4% to 128,300 on owned infrastructure (164,500 including partner markets), while revenue rose 17.4% and adjusted EBITDA loss narrowed by $4 M.
• Since its $239 M securitization in May 2023, similar ABS financings at increasingly tight spreads highlight the broader financialization of fiber assets, shaping strategic options to capitalize Ting’s ISP business.

Presentation

[Monica Webb, VP of Investor Relations at Tucows]

Welcome to Tucows' Q2 2024 management commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the company. A Tucows-generated transcript of these remarks, with relevant links, is also available on the company's website. We will begin with opening remarks from Elliot Noss, President and CEO of Tucows and Ting, followed by business remarks from Dave Woroch, CEO of Tucows Domains, Justin Reilly, CEO of Wavelo, Elliot Noss on Ting, Ivan Ivanov, Tucows' new CFO, who will discuss our financial results in detail, and finish with closing remarks from Elliot Noss. In lieu of a live question-and-answer period following these remarks, shareholders, analysts, and prospective investors are invited to submit questions to Tucows Management. Please submit questions via email to ir@tucows.com until Thursday, August 15th.

[Monica Webb, VP of Investor Relations at Tucows]

Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the Tucows website on Tuesday, August 27, at approximately 4:00 P.M. Eastern Time. We would also like to advise that the updated Tucows quarterly KPI summary, which provides key metrics for all of our businesses for the last six quarters, as well as for full years 2022, 2023, and 2024 year to date, and also includes historical financial results, is available in the Investors section of the website. The updated Ting Build Scorecard and investor presentation are also available. Now for management's prepared remarks. On Thursday, August 8, Tucows issued a news release reporting its financial results for the Q2 ended June 30, 2024. That news release and the company's financial statements are available on the company's website at tucows.com under the Investors section.

[Monica Webb, VP of Investor Relations at Tucows]

Please note that the following discussion may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC, specifically the most recent reports on the Forms 10-K and 10-Q. The company urges you to read its securities filings for a full description of the risk factors applicable to its business. I would now like to turn the call over to Tucows' President and Chief Executive Officer, Elliot Noss. Go ahead, Elliot.

[Elliot Noss, President and CEO at Tucows]

Thanks, Monica. Starting with our consolidated results, the Q2 of 2024 saw solid year-over-year and quarter-over-quarter performance for revenue, gross margin, and Adjusted EBITDA. It's the third consecutive quarter of growth of our headline metrics and reflective of our work to grow revenue efficiently and employ rigor around cost controls to support continued expansion of margin. Consolidated net revenue for the Q2 increased 5.2% year-over-year to $89.4 million, with strong revenue gains from Ting and Domains. Gross profit in Q2 grew 15.4% year-over-year to $20.8 million. The gross profit growth came from all three businesses, with Ting doing the heaviest lifting. Adjusted EBITDA for the Q2 of 2024 increased 70% year-over-year to $9.2 million.

[Elliot Noss, President and CEO at Tucows]

The increase was primarily driven by Ting's reduction of its Adjusted EBITDA losses and was supported by year-over-year gains from Domains and Wavelo. We continue to balance investment in the businesses with paying down debt. In Q2, we further deleveraged the business with $6.5 million in payments on the syndicated debt. As many of you will have seen, Ivan Ivanov has very recently taken over from Dave Singh as Tucows' new CFO. Ivan brings highly relevant expertise, including strategic capital management and lots of exposure to Verizon's fiber business. We are pleased to have him join the executive team, and both Dave and Ivan have worked to create an extremely smooth transition. I also want to sincerely thank Dave for his impact on Tucows over the last eight years.

[Elliot Noss, President and CEO at Tucows]

Under his stewardship, Tucows has navigated significant growth and changes in our business, and I'm grateful for having him as my partner through it all. The entire Tucows family wishes him the best in his next endeavors, and we know he will continue to cheer for us from the sidelines. Now, we'll hear from the heads of each business, as well as from Ivan in his inaugural remarks as CFO, covering our financial results in detail. The first speaker is Dave Woroch, Chief Executive Officer, Tucows Domains. Go ahead, Dave.

[Dave Woroch, CEO at Tucows Domains]

Thanks, Elliot. In the Q2, Tucows Domains continued to reliably generate cash, grow our margin, and contribute to Tucows adjusted EBITDA. Our domains under management were up marginally year-over-year, and our transactions were down just under 3% from Q2 of 2023. We're pleased that our efforts to grow margin while being rigorous on cost control has generated these results, particularly given the declining domain transaction numbers for Verisign. Revenue for domain services for Q2 was $62.4 million, up 4% from $60 million for the same quarter last year. Gross margin was $18.9 million, also up 5.2% from the same quarter last year. Domain services adjusted EBITDA was $11.2 million in the Q2, up 6% from Q2 of last year.

[Dave Woroch, CEO at Tucows Domains]

Looking at the results from the segments of our business and our wholesale channel, revenue for Q2 was $53 million, up 2.9% compared to $51.5 million for Q2 of last year. Gross margin was $13.6 million, down slightly from $13.7 million from Q2 of 2023. Within the wholesale channel, domain services gross margin was up 1% in Q2 compared to the same period last year, while value-added services gross margin was down 3.8%. In our retail channel, revenue for Q2 was $9.3 million, up 10.8% from $8.4 million in Q2 of last year. Retail gross margin for the Q2 was up 23.6% year-over-year.

[Dave Woroch, CEO at Tucows Domains]

The outsized retail revenue and margin continued to be positively impacted by the movement of some wholesale customers to retail that I have discussed previously, and retail margins are higher than wholesale margins, both as a percentage and in dollars per transaction. Our combined overall renewal rate at 76% in Q2 across all Tucows Domains brands, remains within our historical range and above the industry average. In closing, I wanted to add that we continue to have incremental successes in our registry services business. We recently won the business with .music to operate their registry back-end. In addition, our Orange Domains joint venture has announced the launch of their first TLD, .locker, which will also operate on the Tucows Domains back-end. Both new TLDs are expected to be in general availability before the end of this year.

[Dave Woroch, CEO at Tucows Domains]

In addition, and specific to the other new services we're developing, we continue to incorporate reseller input into our product development cycle and progress towards what we believe will ultimately deliver a useful and fulsome suite of tools that facilitates adoption. Now, over to Justin Reilly, CEO of Wavelo.

[Justin Reilly, CEO at Wavelo]

Thanks, Dave. Looking back to a year ago, we were just wrapping up the migration of millions of Boost subscribers to the Wavelo platform. Since then, Dish has focused on optimizing their base for higher-quality subscribers and managing the churn that's all too common in these prepaid businesses. Just recently, Boost launched a new unified brand with nationwide 5G coverage that blurs the line between prepaid and postpaid, a nod to our history with Ting Mobile that is a welcome departure from the industry standard. The configurability and flexibility of Wavelo's platform enabled them to deliver this in record time, instead allowing them to focus on customer delight, not technical implementations. Wavelo's revenues were $10.5 million in Q2, up 11.8% from Q1 and down 2.3% from Q2 2023.

[Justin Reilly, CEO at Wavelo]

The small decrease in revenue year-over-year was driven by less one-time professional services work in the current year as we continue to transition towards recurring platform revenues. As we've previously noted, we experience outsized revenue recognition annually in Q2 related to the bundled professional services included as part of the platform services provided to DISH. Adjusting for this, revenues were relatively stable compared to Q1, with a small 1% reduction as DISH focused on higher-value subscribers. Gross margin was $10.2 million, up 12.4% quarter-over-quarter and up 1.1% year-over-year, a lift consistent with the discussion on revenues as we recognize the bundled professional services provided to DISH and transition our revenue mix more and more to higher-margin platform services.

[Justin Reilly, CEO at Wavelo]

Adjusted EBITDA for Q2 was $3.9 million, up 40.3% from last quarter and up 14.1% year-over-year. As we head into a more steady state with Dish, we are pleased with their ability to right-size their base, position Boost for growth, and move from defense to offense in their marketing and product strategies. On adjusted EBITDA, we continued to thoughtfully manage investment with a focus on margin performance and growth-related hiring. The latter we expect to ramp in the second half of the year as our go-to-market team comes into sharper relief. Last month, we launched Product Catalog to allow operators flexibility and choice as they navigate the competitive pressures of this current landscape. As a go-to-market tool, Product Catalog allows prospects to choose Wavelo without needing to re-platform their entire BSS suite.

[Justin Reilly, CEO at Wavelo]

As more CIOs move towards a best-of-breed strategy, core componentry, like Product Catalog, become important building blocks of their digital transformation. This gives us means of building an initial relationship with room to expand from there as the relationship blossoms. From day one, our strategy has been to provide modular software solutions that meet customers where they are, and as the cloud transformation in telecom takes shape, this will be all the more important to onboarding new telecoms onto the Wavelo platform. Our teams have spent much of the quarter onboarding the new logos that closed in Q1, and those efforts are going well. I'll remind investors that these are small ISPs, and while the revenues are not material, the go-to-market and delivery muscles being built are fundamental to Wavelo's ability to scale beyond our anchor customers.

[Justin Reilly, CEO at Wavelo]

I am pleased to see our early marketing efforts starting to bear fruit as the number of inbound leads and RFPs are increasing quarter over quarter. In tandem, our sales team is refocusing its efforts upmarket on larger MVNOs, MNOs, and ISPs. While this naturally means sales cycles elongate, it more strategically positions the business for longer-term, profitable growth. And as I've said before, the larger telecoms are the ones who can most benefit from what Wavelo has to offer. As we've discussed before, we are well into an era of telecom colored by consolidation, convergence, and evolving customer expectations.... Many of the systems in use today were built for the express purpose of managing either fixed or mobile billing and provisioning during a more simple landscape of competition.

[Justin Reilly, CEO at Wavelo]

We've constructed Wavelo to meet the needs that operators have now, not yesterday, and to run out in front of their needs tomorrow. I've never been more excited to be doing this work at this time and with this tremendous market opportunity ahead of us. Thanks for listening, and now over to Elliot.

[Elliot Noss, President and CEO at Tucows]

Thanks, Justin. In Q2, Ting added 2,100 net new subscribers, growing 10.5% year-over-year and taking us to over 48,000 subscribers in total. We also had a 17.4% year-over-year growth of completed serviceable addresses in Q2, taking us to 128,300 serviceable addresses for Ting-owned infrastructure. Our partner markets are continuing to ramp up their builds, with 72% growth on addresses for Q2 year-over-year. This brings us to 164,500 total serviceable addresses across all Ting footprints. Revenue for Q2 grew 17.4% year-over-year to $14.6 million, and gross margin grew 39% year-over-year to $9.8 million, as we see margins expanding as expected. Most notably, Ting's adjusted EBITDA loss was reduced to $6.4 million for Q2, down by nearly $4 million year-over-year.

[Elliot Noss, President and CEO at Tucows]

While this pace of change may not continue, we do expect this trend to continue. It's primarily a result of a full quarter of recognition for the reductions in headcount and seeing marketing spend return to more normalized levels. As I mentioned last quarter, my focus is to continue moving the business forward on the path to profitability. We will continue to invest prudently to expand our footprint and our market share. We will continue to be disciplined on cost controls, construction economics, and improving our margins, and at the same time, working to maintain Ting's renowned customer experience and low churn rates, all while resolving the long-term capitalization of the business. Our Q2 fiber CapEx is reduced from Q1 of 2024 at just over $12 million for Q2 and continues to be lower than our spends a year ago.

[Elliot Noss, President and CEO at Tucows]

This is not only us being more judicious on capital deployment, but it also reflects that while newer markets are in active construction, others, such as Culver City, Sandpoint, and parts of the Raleigh and Denver regions, are now mostly built, with opportunistic construction happening when new MDUs or neighborhoods are added. Alexandria is resuming construction after a short hiatus, where we worked with the city to get consensus on the right approaches as it relates to construction specifics, traffic management, and planning practices in a historic and densely populated city. While we have nothing specific to share on the further capitalization of Ting, there were a number of important industry events. We continue to see financial markets' sustained interest in securitization instruments for fiber deployments.

[Elliot Noss, President and CEO at Tucows]

Since Ting did our $239 million securitization in May 2023, we've seen similar successful structured financings for Ziply, Frontier, and Allo, among others, all well-priced. This reinforces our view that the market recognizes the inevitability and long-term profitability of the U.S. coax to fiber transition, and they view the ABS product as a low-risk instrument to participate. The other trend that Ting was early to embrace that we're now seeing in headlines is partnerships between infrastructure owners and service providers. Back in April, we heard about a joint venture between T-Mobile and EQT to acquire fiber provider Lumos. In the last month, we've seen joint venture discussions between Stonepeak and Frontier, and a joint venture between T-Mobile and KKR to acquire MetroNet, the first fiber provider to do an ABS transaction.

[Elliot Noss, President and CEO at Tucows]

This aligns with our view on both partnerships, bringing together the operational structure of established fiber providers with the financial heft to capitalize on the coax to fiber transition. The T-Mobile transactions also reinforce the inevitability of convergence of fixed and mobile services and the need for a platform like Wavelo that seamlessly integrates the two. Now we'll hear from our new Tucows CFO, Ivan Ivanov, who will discuss our financial results in detail.

[Ivan Ivanov, CFO at Tucows]

Thank you, Elliot. Starting with revenue, total revenue for the Q2 of 2024 increased 5.2% to $89.4 million, compared to $85 million for the Q2 of 2023. With respect to each business, Ting grew revenue 17% year-over-year, increasing to $14.6 million from $12.4 million in the same quarter last year. Wavelo's revenues decreased 2% to $10.5 million, reflecting a reduction in professional services fees as the business transitioned to a primarily subscriber revenue basis. Tucows Domains revenue was up 4%, increasing to $62.4 million from $60 million the prior year. Corporate revenue was up 6.4% to $2 million in Q2 2024 versus $1.9 million last year.

[Ivan Ivanov, CFO at Tucows]

Gross profit before network costs for the Q2 increased 11.3% year-over-year to $38.1 million, from $34.2 million in Q2 2023. At an efficiency level, gross profit before network costs increased to 43%, compared to 40% in the prior year. Breaking down gross margin by business, Tucows Domains' gross margin increased 5.2% to $18.9 million from $17.9 million in Q2 2023. As a percentage of revenue, gross margin for Tucows Domains remained unchanged year-over-year at 30%. Wavelo's gross margin increased modestly to $10.2 million this quarter from $10 million in Q2 2023. As a percentage of revenue, gross margin for Wavelo was 97%, up from 93% in the prior year.

[Ivan Ivanov, CFO at Tucows]

The increased margin reflects efficiency from the fully-migrated Dish subscriber base. Ting gross margin for Q2 increased 39.2% year-over-year to $9.8 million, from $7.1 million for the same period last year. As a percentage of revenue, gross margin for Ting was 67% in the Q2 of 2024, up from 57% in Q2 of last year. Network expenses for Q2 were $17.3 million, up from $16.2 million for the same period last year, largely reflecting higher depreciation of our expanding fiber network assets. Total operating expenses decreased 5.5% to $29.4 million from $31.1 million in Q2 2023.

[Ivan Ivanov, CFO at Tucows]

The decrease is primarily the result of $1.4 million in fully amortized intangible assets from the email brand and customer relationships, a $1.3 million reduction in sales and marketing costs, primarily from more efficient marketing spend, and a $0.3 million reduction in stock-based compensation. The overall operating expense reduction was partially offset by increased costs from contract and professional services, professional fees, and foreign exchange-related expenses. As a percentage of revenue, operating expenses improved to 33% compared to 37% for the same period last year, largely as a result of portfolio-wide cost management initiatives.

[Ivan Ivanov, CFO at Tucows]

We reported a net loss for the Q2 of 2024 of $18.6 million, or a loss of $1.70 per share, compared with a net loss of $30.8 million, or $2.86 per share for the Q2 of 2023. The decreased loss is primarily the result of continued OpEx reductions, lower income taxes, and a one-time debt extinguishment cost in the prior year. The decreased net loss was partially offset by increased interest expense and network depreciation resulting from our expanding fiber network. Adjusted EBITDA for Q2 was $9.2 million, up 70% from $5.4 million for Q2 2023, primarily driven by reduced operating loss from Ting and year-over-year increases from Domains and Wavelo.

[Ivan Ivanov, CFO at Tucows]

The total breakdown among our three business units is as follows: Adjusted EBITDA for Tucows Domains was $11.2 million, up 6% from Q2 of last year. Adjusted EBITDA for Wavelo was $3.9 million, up 14% from $3.4 million in Q2 of last year. Adjusted EBITDA for Ting was -$6.4 million, compared with -$10.3 million in Q2 2023, following a reduction in workforce in Q1 of this year. And finally, the corporate category had adjusted EBITDA of $0.5 million this quarter, down from $1.7 million in Q2 of last year. The decrease is primarily driven by lower contribution from the legacy mobile base.

[Ivan Ivanov, CFO at Tucows]

Turning to our balance sheet, cash and cash equivalents at the end of Q2, 2024, were $39.3 million, compared with $66.6 million at the end of the Q1 of 2024, and $147.9 million at the end of the Q2 of 2023. In addition to the $39.3 million, we have $12.9 million classified as restricted cash as part of the ABS transaction in 2023. As a reminder, of the $12.9 million of restricted cash, $8.9 million will sit in a trust account for the duration of the ABS notes. The remaining $4 million reflects the cash collections from the securitized assets, and it is distributed monthly as interest to the note holders and fees to third parties, with the remaining funds coming back to Ting.

[Ivan Ivanov, CFO at Tucows]

I will also note that we generated $0.7 million in interest income this quarter. During the quarter, we had -$4.7 million in cash from operations, compared with -$6.8 million in Q2 of last year, with the improvement primarily as a result of a lower operating loss from Ting in Q2, 2024... and a one-time debt extinguishment in Q2 of last year used to reduce the general preferred shares obligation. We invested $16 million in property and equipment, primarily for the continued build-out of the Ting Fiber network, in addition to continued investment in the Wavelo platform. Note that this number reflects the actual cash paid for capital assets in the quarter on our cash flow statement and includes capitalized cash interest.

[Ivan Ivanov, CFO at Tucows]

As of June 30th, 2024, our syndicated loan balance for covenant calculation purposes was a net $192.6 million, when factoring in letters of credit and cash on hand of up to $7.1 million, which resulted in a leverage ratio of 3.17 times. This is the fifth consecutive quarter we have reduced the leverage ratio. We repaid a net $6.5 million on the balance of the loan this quarter and expect quarterly repayments to continue. Finally, deferred revenue at the end of Q2 was $156 million, up slightly from $155 million for the Q1 of 2024, and also up from $151 million for the Q2 of 2023. That concludes my remarks, and now I'll turn it back to Elliot.

[Elliot Noss, President and CEO at Tucows]

Thanks, Ivan. For the last few quarters, I've been talking about my strongly held belief that public markets in the summer of 2024 can only sustain two kinds of companies. There are those that are story or concept stocks, where the goal is to sell to the next person to hear and believe the story. The obvious example is NVIDIA, and there are companies that are capital light and generate a lot of free cash flow. And note, I do not say EBITDA, but truly free cash flow. In fiber, I talked last quarter about the T-Mobile EQT deal, among others. This quarter, I mentioned additional data points confirming our views. The numerous additional ABS financings announced, all with lots of demand and all with narrowing spreads.

[Elliot Noss, President and CEO at Tucows]

This demonstrates that there is still loads of capital looking for a home, and that holders want to deploy as much capital as possible with as little risk as possible. As I mentioned, the biggest deal yet in the space, with T-Mobile buying a stake in MetroNet. We see T-Mobile now partner with KKR in addition to their existing EQT deal. We see a financial sponsor again keeping their dollars at work on the network side, while letting T-Mobile take all the ISP risk. We are seeing the continued financialization of fiber to the home as an asset class. Since 2017, we've been talking about how eventually fiber networks will be financialized in the same way that towers were. The financialization of towers started with the AT&T spin-off that became Crown Castle at the turn of the century. Towers now trade at incredibly high multiples.

[Elliot Noss, President and CEO at Tucows]

Who better than AT&T to kick off the financialization of fiber networks with their Gigapower deal? So where are we? For years, we've been talking about each fiber footprint as having three components: capital, construction, and ISP. With the deals we have seen and will continue to see, we see the financialization of the output of capital and construction, the networks themselves. This leaves the ISP. So what happens to the ISP when you untether the other two pieces? Well, it is generally a capital-light, cash-generative business, but it is an operating business that is of little interest to traditional pools of long-term infrastructure capital. They strongly prefer less risk and more structured returns. In terms of the long-term resolution of the Ting business, I have nothing formal to share this quarter, but this remains the top priority.

[Elliot Noss, President and CEO at Tucows]

Whatever path we choose to take, it will be greatly informed by this financial backdrop. When it comes to TCX and the broader market, last quarter, I talked about the Berkshire Hathaway annual meeting and the fact that Apple was now their largest holding. This quarter, they announced they had cut their stake in Apple in half. They are seeing what we are seeing. There is now massive concentration in the market, with a small number of the largest stocks accounting for a greater and greater share of the total market capitalization. These are now stories, no longer trading on free cash flow. When we look at the cumulative net income of the past three years of Microsoft, Amazon, Meta, and Alphabet, it was an amazing $570 billion, but they spent a combined $418 billion of that on CapEx alone.

[Elliot Noss, President and CEO at Tucows]

They trade at massive multiples of net income, but when we look at free cash flow, it looks like a bubble. We expect this is what Warren Buffett saw. It feels like we now need to invoke Stein's law: If something cannot go on forever, it will stop. How public companies that consist of capital-light, free cash-generative businesses behave and how they trade in the future is not clear. It is unlikely to be dividends or buybacks in the way they have been used in the last 10 years or so. We know we think that returning capital to shareholders has always been the right approach, and it's clearly the one that addresses the structure of capital markets in 2024. And with that, I look forward to your written questions and exploring areas that interest you in greater detail.

[Elliot Noss, President and CEO at Tucows]

Again, please send your questions to ir@tucows.com by August fifteenth, and look for our recorded Q&A audio response and transcript to this call to be posted to the Tucows website on Tuesday, August twenty-seventh, at approximately 4:00PM Eastern Time. Thank you.

Participants

Executives

• Dave Woroch, CEO
• Elliot Noss, President and CEO
• Ivan Ivanov, CFO
• Monica Webb, VP of Investor Relations

Analysts

• Justin Reilly, CEO at Wavelo