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Tucows reported higher revenue and gross profit in the first quarter of 2026, but losses widened as sales and marketing spending increased and legacy mobile obligations weighed on results, according to management commentary accompanying the company’s quarterly report.
Chief Executive Officer David Woroch said the quarter showed “continued progress against the priorities in each of our business segments,” pointing to steady performance in Domains, growth at Ting Internet and ongoing investment at Wavelo.
Consolidated net revenue rose 2% to $96.7 million from $94.6 million in the first quarter of 2025, Chief Financial Officer Ivan Ivanov said. Gross profit increased 2.5% to $24.1 million, supported by margin expansion in Domains and Ting and moderated network costs, partially offset by headwinds from the company’s legacy mobile business.
Adjusted EBITDA declined 15% to $11.7 million from $13.7 million a year earlier. Tucows reported a GAAP net loss of $18.1 million, or $1.63 per share, compared with a net loss of $15.1 million, or $1.37 per share, in the prior-year quarter. On a non-GAAP adjusted basis, the company posted a net loss of $16.9 million, or $1.51 per share, compared with an adjusted net loss of $14.9 million, or $1.35 per share, a year earlier.
Tucows Domains revenue declined 2% year over year to $64.1 million from $65.3 million. Gross profit after network expenses increased 2% to $18.6 million from $18.3 million.
Adjusted EBITDA for the segment was $11.6 million, up modestly from the prior year. Woroch said Domains benefited from a favorable mix of higher-margin product sales, customer composition and “prudent expense management.” He said domain services remained the primary driver of profitability, while value-added services contributed less than in the prior-year period due to more modest expiry stream sales.
Within Domains, wholesale revenue fell 3% to $54.3 million from $55.9 million. Ivanov said the decline reflected “the tail end of the impact from a large customer moving low margin domains in-house.” Wholesale gross margin net of network expenses rose 1%, supported by the higher-margin sales mix.
Domain services gross margin increased 4% to $10.0 million, while value-added services declined 5% to $5.1 million. Retail revenue increased 5% to $9.8 million, and retail gross margin rose 8% to $5.6 million.
Woroch also said the company completed the migration of the Radix Registry portfolio in mid-March, with the full quarterly benefit expected in the wholesale segment in the second quarter.
Wavelo revenue was $11.6 million in the first quarter, representing a slight increase from the year-earlier period. Gross profit declined to $7.0 million from $7.8 million, and adjusted EBITDA decreased to $3.6 million from $4.4 million.
Management attributed the lower gross profit and adjusted EBITDA primarily to continued investment in Wavelo’s sales and marketing efforts, which began in the second quarter of 2025. Woroch said the company is investing “thoughtfully and selectively in go-to-market capacity while maintaining a lean operating model.”
Ivanov noted the year-over-year comparison was affected by Wavelo’s strong prior-year period, when the business benefited from both a rate card increase and subscriber growth. He said the rate contribution has now leveled off, creating a tougher comparison.
Ting Internet revenue increased 19% year over year to $19.4 million. Ivanov said the gain was driven primarily by construction revenue related to Ting’s contract with a senior living community, as well as continued subscriber growth.
Ting’s gross profit improved to $1.7 million from a negligible amount in the first quarter of 2025. Adjusted EBITDA improved to a loss of $0.4 million from a loss of $0.8 million a year earlier.
Woroch said Ting’s results marked “important progress,” with subscriber growth and revenue both accelerating and adjusted EBITDA improving by 50% from the prior-year quarter. He said Ting’s partner footprint continues to expand, supporting what he described as a more capital-efficient path to growth.
Woroch also said the company continues to work on Ting’s strategic process, calling it a top priority for management and the board, though he said Tucows was not in a position to provide a substantive update.
Corporate revenue was flat year over year at $1.6 million, while gross profit was negative $3.2 million compared with negative $2.6 million a year earlier. Corporate adjusted EBITDA was negative $3.1 million, compared with negative $1.5 million in the first quarter of 2025.
Ivanov said reduced profitability in the Corporate segment was primarily impacted by mobile contract obligations and lower revenue from the legacy mobile business. He said profitability from remaining legacy mobile arrangements continues to be challenged on both the revenue and cost sides.
Woroch said the Corporate segment—specifically mobile obligations and professional fees—was the area that weighed most on the quarter. “Those headwinds were real but represent costs that are not expected to recur indefinitely and that we're working to eliminate,” he said.
Consolidated cash flow from operating activities was $3.5 million in the first quarter, compared with negative $11.3 million in the prior-year period. Ivanov said Domains, Wavelo and Corporate generated $7.2 million in operating cash flow combined, while Ting had a $3.7 million outflow, mainly from ABS interest paid.
Tucows invested $3.6 million in Ting capital expenditures during the quarter and $1.9 million in Domains and Wavelo combined. The company ended the quarter with cash and restricted cash of $34.6 million for Ting and cash of $27.4 million excluding Ting.
Corporate net debt excluding Ting was $162.2 million as of quarter-end, net of deferred financing costs. Ivanov said Tucows remained in compliance with its covenants under the TCX syndicated facility, with a leverage ratio of 3.29 times and interest coverage of 4.12 times. Ting’s net debt was $417.8 million, consisting of ABS notes and preferred shares.
Woroch said his priorities for the rest of 2026 remain to generate free cash flow, improve capital flexibility and make the company “simpler, more focused, more disciplined.”
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