Tucows (NASDAQ:TCX) reported higher second-quarter revenue and gross profit, supported by a sharp improvement at its Ting fiber business, while adjusted EBITDA declined modestly from a year earlier amid higher professional fees, weaker Wavelo profitability and continued pressure from its legacy mobile operations.
Consolidated revenue for the quarter ended June 30 rose 2% year over year to $100.6 million and increased 4% sequentially. Gross profit increased 17% from the prior-year period to $25.8 million. Adjusted EBITDA was $12.3 million, down 2% from $12.6 million a year earlier but up 5% from the first quarter.
The company generated $1.9 million of cash flow from operating activities during the quarter, its second consecutive quarter of positive operating cash flow. Operating cash flow totaled $5.5 million for the first half of 2026, compared with an outflow of $4.7 million in the first half of 2025.
Ting Reaches Positive Adjusted EBITDA
Ting delivered the largest operational improvement among Tucows’ segments. Revenue increased 32% year over year to $21.6 million, including $17.5 million in fiber internet services revenue and $4.1 million in construction services revenue associated with the Laguna Woods Village homeowners association.
Internet subscribers under management ended the quarter at approximately 60,500, up about 8,500 from a year earlier. Ting added roughly 3,700 subscribers in the quarter, largely from Laguna Woods Village, compared with approximately 400 additions in the prior-year quarter.
Ting generated gross profit after network expenses of $2.5 million, compared with a loss of $3.2 million in the first quarter. The first-quarter result included a $2.7 million non-cash lease accounting adjustment in cost of goods sold. Ting’s adjusted EBITDA improved to positive $1.5 million, from a loss of $3.7 million a year ago and a loss of $0.4 million in the first quarter.
President and CEO David Woroch said this marked Ting’s first quarter of positive adjusted EBITDA since Tucows began reporting results by segment. He attributed the improvement to subscriber growth, construction activity and operating-cost discipline.
Woroch said the company continues to assess Ting markets based on economics, capital requirements and their potential to contribute to long-term value. The company’s strategic process for Ting remains a priority, although he said it has taken longer than expected because of interdependencies needed for an efficient transaction.
Domains Margin Holds Despite Volume Decline
Tucows Domains revenue declined 4% year over year to $65 million, as a large reseller’s transition of lower-margin domains in-house continued to affect results. Domains under management fell to 21.3 million from 24 million a year earlier.
Despite lower revenue and volume, gross profit after network expenses was essentially unchanged at $19.3 million. Ivanov said strong expiry sales, a full quarter of revenue from a new registry customer and resilient reseller and retail unit economics helped offset the volume decline.
Wholesale revenue decreased 4% to $55.1 million, while retail revenue was $9.9 million, down from $10.3 million a year earlier. Value-added services revenue rose 9% to $6.3 million, supported by expiry sales. Domains adjusted EBITDA was $11.9 million, compared with $12.5 million in the prior-year period, mainly due to higher general and administrative expenses.
Woroch said the reseller insourcing activity has “mostly wound down” and that domain volumes are expected to be stable going forward. He also cited registry services and higher-margin complementary products as contributors to the segment’s performance.
Wavelo Declines as Company Maintains Sales Investment
Wavelo revenue fell 7% year over year to $11.8 million, reflecting less bundled professional-services revenue recognized during the period. Gross profit after network expenses declined to $6.6 million from $8.6 million, while adjusted EBITDA fell to $2.8 million from $5.4 million.
The company said results also reflected incremental personnel costs associated with bundled professional services and continued sales-and-marketing investment. Wavelo’s sales pipeline remains active among telecommunications providers in multiple markets, though Woroch noted that conversion timing can be uneven with large telecom customers.
He said further investment in Wavelo will depend on demonstrated execution and measurable progress in converting its pipeline into recurring revenue.
Capital Structure Actions and Mobile Headwinds
During the period, Tucows amended and extended its syndicated credit facility and retired all outstanding Series A preferred units in Ting Fiber. Woroch said the preferred-unit retirement removed an obligation valued at approximately $150 million, including cumulative dividends. The credit facility extension moved the maturity of all but one lender commitment from September 2027 to July 2029, while key pricing and financial covenants remained substantially unchanged.
Tucows also acquired a Ting-owned data center primarily used by its Domains and Wavelo businesses. Woroch said the move protects critical infrastructure and places the asset outside potential outcomes of the Ting strategic process.
At quarter-end, the company held $60.2 million in cash, cash equivalents and restricted cash, while corporate debt under the syndicated facility stood at approximately $190.4 million. Tucows reported compliance with its financial covenants, including a leverage ratio of 3.72 times and interest coverage of 3.75 times.
Corporate results continued to be affected by professional fees and losses in the remaining mobile business. Ivanov said mobile profitability was hurt by unfavorable per-subscriber economics, changes in customer-plan and usage mix, and about $1.3 million of long-distance charges tied to an isolated instance of unauthorized traffic. Tucows was responsible for the charges under a carrier agreement, though the company said the activity was contained and additional monitoring and usage controls have been implemented.
Woroch said Tucows is actively seeking a resolution to the mobile business’s economics while working to build a simpler, more focused and capital-efficient company.
About Tucows (NASDAQ:TCX)
Tucows Inc (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.
