Tucows Inc.
Q1 2021 Earnings Call Transcript

Published: 9 May 2021

[Monica Webb:]

Welcome to Tucows First Quarter 2021 Management Commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the company. A Tucows-generated transcripts of these remarks with relevant links is also available on the company's website. In lieu of a live question-and-answer period following the remarks, shareholders, analysts and prospective investors are invited to submit their questions to Tucows' Management via email at [e-mail] until Tuesday, May 11. Management will address your questions directly or in a recorded audio response and transcript that will be posted to the Tucows' website on Tuesday, May 18 at approximately 4

[Elliot Noss:]

Thanks, Monica. The first quarter was a very solid start to 2021. In our Domains business, the underlying consistency of that business benefited from the accelerated transition to online driven by the pandemic. In Mobile Services, the new iteration of our business is moving forward on plan with our legacy customer base performing as expected and DISH's Mobile business also progressing nicely. And with Ting fiber, we set new records across all of our key metrics, most notably, by far our largest quarterly CapEx investment, as well as our highest ever growth and serviceable addresses. Turning to our financial results. I will again remind you that for comparative purposes, our reported revenue and gross margin do not include results from our legacy mobile customers. But almost all of that revenue and much of the expenses associated with the Mobile business now subsumed in other income. Those looking for a refresher on the details can refer to our Q3 2020 management remarks. Net income for the first quarter was $2.1 million or $0.20 a share, compared with $2.8 million or $0.27 a share, driven primarily by higher depreciation through our continued fiber network build and a slightly higher effective tax rate. Cash flow from operations was essentially unchanged from Q1 last year at $14.1 million and adjusted EBITDA for Q1 was just over $12.7 million, up very slightly from Q1 of last year. Total revenue for Q1 was $70.9 million versus $84 million for Q1 last year and total gross margin was $17.5 million compared with $25.2 million last year, with the decreases reflecting the shift in our Mobile business to the MSE model. Excluding the impact of the change in how our mobile results flow through the P&L. Q1 revenue for just the domains and internet operations was up 4% year-over-year to $66.6 million and gross margin was up 13% to $23.2 million.

[Dave Singh:]

Thanks, Elliot. Before I get into the numbers, as a reminder, we have reorganized our reporting structure into three operating and reportable segments

[Elliot Noss:]

I would like to start my closing remarks by tidying up some unfinished business for last quarter

[Q -:]