Earnings Labs

Tucows Inc. (TCX)

Q1 2023 Earnings Call· Mon, May 29, 2023

$16.34

-1.39%

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Transcript

Monica Webb

Operator

Welcome to Tucows' question-and-answer dialogue for Q1 2023. Elliot Noss, President and Chief Executive Officer, will be responding to your questions. For your convenience, this audio file is also available as a transcript in the Investors section of our website, along with our Q1 2023 financial results and updated reports. I would also like to remind investors that if you would like to receive our quarterly reports and Q&A via e-mail, please make the request to ir@tucows.com. 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-Q and 10-K. The company urges you to read its security filings for a full description of the risk factors applicable for its business. Today's commentary includes responses to questions submitted to us following the prerecorded management remarks regarding the quarter and outlook for the company. We are grouping similar questions into categories that we feel are addressing common queries. If your questions reach a certain threshold or volume, we may ask you to schedule a call instead to ensure we can address the full body of your questions. And if you feel that the recorded questions and/or any direct e-mail you may receive do not address the full meat of your questions, please let us know. Go ahead, Elliot.

Elliot Noss

Analyst

Thank you, Monica, and welcome to our Q&A for our first quarter 2023 financial results. It was great to see so many of you in person and on the live stream for our recent Investor Day. As a result of that opportunity to dive more deeply into our business assumptions and operations, we have a lighter Q&A this quarter. We have a couple of small clarifications on TCX, A couple of questions on Ting and nothing more on Tucows' domains or Wavelo, although I will say that we had positive feedback on both these businesses as investors were able to dig a little deeper on Investor Day. With Tucows, I have a few questions on the overall business that I'll address first. We talked about 2023 guidance for adjusted EBITDA in our Q4 management remarks and Q&A, and I'd like to reiterate our expectations for each business segment. For Tucows domains, which achieved $44.8 million in adjusted EBITDA in 2022, guidance is in the same $45 million range. For Wavelo, which did $3.8 million in adjusted EBITDA in 2022, we have guidance of $4 million to $6 million in EBITDA, which is an update from the $2 million to $4 million we provided in the Q4 Q&A. In 2022, a larger portion of Wavelo's revenues came from onetime professional services from DISH, whereas in 2023, the revenue stream is transitioning towards the long-term subscriber-based revenue model. For Ting, which had an adjusted EBITDA loss of $21.6 million in 2022 as we continue to ramp investment into building fiber, guidance for 2023 is around a $40 million adjusted EBITDA loss. And for the Corporate segment, which in 2022, did $10.4 million in adjusted EBITDA, we are giving guidance of $5 million for 2023, reflecting a lower expected mobile contribution and increased…