Welcome to Tucows Third Quarter 2022 Management Commentary. We have prerecorded 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. 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 via e-mail at ir@tucows.com until November 10. Management will address your questions directly or in a recorded audio response and transcript that will be posted to the Tucows' website on November 22 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 seven quarters as well as for full years 2020 and 2021 and also includes historical financial results is available in the Investors section of the website, along with the updated Ting Build Scorecard and investor presentation. Now for management's prepared remarks. On Thursday, November 3, Tucows issued a news release reporting its financial results for the third quarter ended September 30, 2022. That news release and the company's financial statements are available on the company's website at tucows.com under the Investors section. Please note that the following discussion may include forward-looking statements, which, as such, 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 security filings for a full description of the risk factors applicable for its business. Finally, as discussed previously, starting in Q1 of this year, we started reporting as separate businesses, Ting, Wavelo and Tucows Domains, in addition to Tucows Corporate. For those that have not yet done so, I encourage you to watch the video we posted on the Tucows Investor site in February for additional detail and perspective on the rationale for this change. I would now like to turn the call over to Tucows President and Chief Executive Officer, Elliot Noss. Go ahead, Elliot.

Thanks, Monica. Q3 was another solid quarter in a tough operating environment. The world is full of uncertainty. And in times like these, it is important to focus on what you can control. We continue to be grateful that focusing on cash generation is useful if undervalued in good times, but extremely important in times of uncertainty. Q3 was our third quarter managing the businesses under the new corporate structure. As we wrap up our 2023 budget cycle, we have learned important lessons, and we'll be able to refine TCX operations in order to better serve the operating businesses. The change in structure is a success, allowing us important financial flexibility without losing, in fact, in some ways, gaining operational efficiency. In addition, I would like to reiterate our previously provided guidance. To the above point, we have now provided four points of guidance rather than just one and are pleased that this has not proven unduly difficult. A reminder that as part of changing our reporting by business segments, you will now hear directly from the heads of each business in these remarks as well as from our CFO, Dave Singh, who will cover our financial results in detail. The first speaker is Dave Woroch, Chief Executive Officer, Tucows Domains. Go ahead, Dave.

Thanks, Elliot. Tucows Domains had a relatively flat quarter year-over-year, as both the domain industry and our business continue to return to pre-pandemic levels. The boom of COVID has given way to an echo, but with a continued positive trend when looking over longer time frames. Revenue for Domain services for the third quarter was down 1% from the same quarter of last year, and gross margin was down 2%. Domain Services' adjusted EBITDA was down 9% from Q3 of last year. Here, I will note that the decrease in adjusted EBITDA is a result of both the lower gross margin as well as increased operating expenses and in line with how we have always endeavored to manage this business efficiently and especially now as we approach the anniversary of the new corporate structure, and in an inflationary environment, we are reviewing and streamlining expenses. Building off my comments in the second quarter, total transactions for the business have continued at the lower pre-pandemic levels that we have discussed in previous quarters. As with many in our industry, we too see the broad-based economic and other challenges and the uncertainty of the global economy. Connected to this, the rapid appreciation from earlier this year in the value of the U.S. dollar has impacted our European business and introduced challenges. For many of our resellers in Europe, we price services in euros and have a cost base in U.S. dollars. The currency impacts from the U.S. dollar gaining strength against the euro has and continues to apply downward pressure to our gross margin. To address this, we have adjusted prices in Q3, and we have announced that we will do so again later this quarter. Returning to the two segments of our business. In our Wholesale channel, revenue for Q3 was…

Thanks, Dave, and hello TCX investors. I want to frame my comments today by reemphasizing some of my remarks from last quarter. We have now started the migration of Boost customers in earnest. As that process reaches scale, we expect to reach an inflection point in the business sometime around Q2 next year, where we are transitioning from one-off professional services revenues from DISH to ramping up a scalable, high-margin reoccurring revenue model based on subscribers from DISH and Ting. We're extremely excited about the growth trajectory of the business with our current customers and potential new ones. Now the financial report. Year-over-year, revenues and gross profit are up modestly, 5.3% and 2.9%, respectively. Quarter-over-quarter is where we see the numbers look lumpy as expected, with revenue for Q3 at $4 million, a decline of 55% from Q2 and gross margin at $3.8 million, a decline of 52%. Revenue was down sequentially for two reasons. As we noted last quarter, we had an outsized revenue recognition in Q2 related to bundled professional services included as part of the platform services provided to DISH. This recognition occurs as an accounting treatment of some of the noncash terms in the DISH transaction. This lumpy revenue recognition was seen in Q1 as well. The second sequential revenue impact is from the partial reversal of a contract asset related to the noncash revenue recognition of certain fixed payment components. The contract asset and associated revenue recognition varies based on the estimated relative mix of variable and fixed payments. And note that the contract asset will unwind over the term of the contract, which is up for renewal in Q3 2024. On the subscriber fee component of revenues, both Wavelo and DISH had hoped to have more Boost subscribers migrated at this point. As we…

Thanks, Justin. In Q3, Ting delivered another strong quarter of fiber construction, deploying close to the same record fiber footage as we did in Q2. The serviceable address number is dampened fairly significantly this quarter as we resolved a small issue in California that was administrative in nature that will push roughly 7,000 addresses into Q1 of 2023. Our Q3 fiber CapEx was again near $25 million at $23.7 million. This is up over 70% year-over-year as we continue accelerating our build. We added 2,300 net subscribers in Q3, taking us to 32,600 in total. That represents growth of nearly 8% from last quarter and 42.5% year-over-year. Our total for both Ting-owned and Ting-partner serviceable address additions was 4,800, taking us to 108,500 total serviceable addresses. We expect those numbers to ramp in Q4 and into 2023 as some of the backlog referred to above comes online. We continue to have a strong pipeline of orders to installs as addresses become serviceable, including in our mature markets, despite increased competition and economic uncertainty. This reinforces our belief that people see Internet service as essential, and they view Ting to be superior to other options. In this regard, I note that our qualitative feedback from customers and our customer engagement scores continue to reinforce our belief that Ting customers truly are the most satisfied ISP customers in the United States. Starting in Q1, on Page 2 of the KPI summary, we provided new disclosure on mature versus growth markets. You may recall, I said these metrics would provide a view of how more mature markets grow as they load customers and generate powerful net margins. I also noted in Q2 that these numbers were a little uneven on the bottom line as we still have plenty of new construction happening in…

Thanks, Elliot. Total revenue for the third quarter of 2022 increased 2.8% to $78.1 million from $75.9 million for the third quarter of 2021. The increase was primarily from Ting and Wavelo, up 71% and 5.3% year-over-year, respectively. Their gains were partially offset by a 44% decline in Tucows Corporate revenue to $2.8 million from $4.9 million in Q3 of last year driven by the expected decrease in transitional services revenue with DISH. Year-to-date total revenue for 2022 is $242 million, up 9% from the year-to-date total revenue of $222 million at the end of Q3 last year. Revenue from Tucows Domains was essentially flat at $60.3 million, down slightly from $60.7 million in Q3 last year. Cost of revenues before network costs for Q3 was down slightly at $48.3 million as compared to $49.5 million for the same period of last year. As a percentage of revenue, cost of revenues before network costs decreased to 62% from 65% in Q3 2021. This was primarily due to growth in the high-margin Ting Internet services revenues. Gross profit before network costs for the third quarter increased 13% year-over-year to $29.7 million from $26.4 million, with the increase due mainly to the higher gross profit contribution of Ting Internet. As a percentage of revenue, gross margin before network costs increased to 38% from 35%. Breaking down gross profit by business. Tucows Domains' gross profit for the third quarter of 2022 decreased 1.7% from Q3 last year to $18.2 million from $18.5 million. As a percentage of revenue, gross margin for Tucows Domains was flat at 30% year-over-year. Wavelo gross profit increased 2.9% to $3.8 million from $3.7 million for Q3 2021. As a percentage of revenue, gross margin for Wavelo was 94% compared with 96% in Q3 last year. As referenced earlier…

Thanks, Dave. I turned 60 last month, and it took until a month before I turned 60 to raise equity for the first time. So now I will make another departure and we'll talk about valuation on this investor call, something I have not done in any detail since we turned public over 20 years ago. This feels like the right conversation to have with investors as we are immersed in our 2023 planning, and we settle into the role of TCX as capital allocator. I want to share the way we are thinking about that role and to place it in the context of where the world is more generally. First, let's talk about the three operating businesses at a high level. We are not fans of complex valuation models. A wall of numbers can offer a sort of placebo, allowing people to be comforted by, and too often, fooled by precision. We prefer being generally right to precisely wrong. We value our three operating businesses simply. We value Tucows Domains on the basis of cash EBITDA; Wavelo on the basis of last quarter annualized recurring revenue; and Ting on the basis of homes passed and customers loaded. I will now talk in more detail about each. With Tucows Domains, it has been a solid cash generator since it launched in 2000. It has funded a number of acquisitions in the Domains business, and it has funded every other business we launched from Ting Mobile to Ting Internet to Wavelo. This business has incredibly reliable cash flows, and other than acquisitions, is not easy to grow, low alpha, very low beta. It is also a mature business that has had to be efficient on a net margin basis in order to successfully compete. Historically, we view our operating efficiency…