Tucows Q3 2025 Earnings Call - Ting Divestiture Shapes Strategic Focus and Growth Outlook
Summary
In his first Q&A as CEO, Dave Woroch laid out a disciplined and clear-eyed path for Tucows amid a critical transition period. The ongoing Ting divestiture is front and center, expected to take multiple quarters to resolve and fundamentally dictating the company’s flexibility and reinvestment potential in Domains and Wavelo. Woroch emphasized operational efficiency, deleveraging, and revenue momentum while signaling that full 2026 guidance including growth outlooks will arrive with the Q4 report. The new CEO anchored his tenure on continuity, discipline, and readiness to pivot once Ting’s fate is sealed, underscored by a deeply engaged board and a strategic focus on maximizing shareholder value.
Key Takeaways
- Dave Woroch’s first Q&A as CEO marks a leadership transition with emphasis on continuity and alignment, as formalized by a four-year fixed-term contract disclosed in next year’s 10K.
- The Ting divestiture process is ongoing, complex, and expected to take several quarters to resolve, with full divestiture trailing that timeline.
- Financial specifics and valuations related to Ting cannot be disclosed until the process concludes and terms are finalized.
- Ting remains the top strategic priority, its outcome directly influencing reinvestment capacity and growth trajectories for Domains and Wavelo.
- Multiple pathways are being evaluated to maximize shareholder value, signaling strategic flexibility dependent on Ting’s conclusion.
- 2026 guidance for Tucows’ core businesses will be provided in the Q4 earnings update in early February, offering visibility into growth prospects.
- Operational discipline is a clear focus, including efficiency gains, deleveraging efforts, and building on recent momentum in revenue, margins, and adjusted EBITDA.
- The board features broad cap table representation and skills tailored to the current transformational phase, actively supporting leadership and operational goals.
- Investors are encouraged to continue engagement, with open channels for questions via email and the promise of transparency around material developments.
- The company is preparing reinvestment initiatives to act swiftly post-Ting, reflecting proactive strategic planning despite current uncertainties.
Full Transcript
Monica, Investor Relations, Tucows: Welcome to Tucows Question and Answer Dialogue for Q3 2025. Dave Woroch, President and Chief Executive Officer of Tucows and Tucows Domains, will be responding to your questions. For your convenience, this audio file is also available as a transcript in the investor section of our website, along with our Q3 2025 financial results and updated reports. I would also like to remind investors that if you would like to receive our quarterly results and Q&A via email, please make the request to [email protected]. Please note that the following discussion may include forward-looking statements, which 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 10Q and 10K.
The company urges you to read its security filings for a full description of the risk factors applicable to its business. Today’s commentary includes responses to questions submitted to us following the pre-recorded 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. If you feel that the recorded questions and/or any direct email you may receive do not address the full scope of your questions, please let us know. Go ahead, Dave.
Dave Woroch, President and Chief Executive Officer, Tucows: Thank you, Monica, and thank you to everyone joining us today. This is my first Q&A in the role of CEO, and I want to start by saying how honored I am to lead this team and to continue building on the foundation Tucows has laid over many years. As you saw in our Q3 results and announcements, it’s been a meaningful quarter, both in terms of business progress and leadership transition. Naturally, many of your questions this quarter are focused on our strategic direction going forward and the ongoing Ting process. I’m looking forward to addressing those today and sharing how we’re thinking about the road ahead across Domains, Wavelo, and Tucows as a whole. A few investors have asked for further detail on the Ting process, including when they could expect a resolution. The activity surrounding Ting remains ongoing and, as expected, is complex.
While it remains a critical priority for us, we anticipate that reaching a resolution could take a couple of quarters, with full divestiture likely taking a few quarters beyond that. At this stage, we are not able to comment on valuations until the process is complete and final terms are in place. We’ll continue to keep investors informed of any material developments as they occur. Another shareholder asks that with Ting in transition, how should we think about the growth outlook for Domains and Wavelo? I understand the increased interest in our core businesses as we focus on resolving Ting, and I can assure investors we are looking at multiple paths to maximize shareholder value with a clear-eyed view.
We will be providing 2026 guidance for each of our businesses in our Q4 earnings update in early February, and that will include visibility into how we’re thinking about growth in both segments. There was also a question about my employment contract as the new President and CEO. The contract is a four-year fixed-term employment agreement. The structure and term ensures predictability, continuity, and alignment for both Tucows shareholders and me. The full contract will be disclosed in our 10K to be filed in March 2026. We had one investor ask about my strategic vision as the new CEO, and another asked about our near-term priorities. I’ll start by saying that my focus is clear. Completing the Ting process remains our top priority. The outcome of that process will directly shape our flexibility to reinvest in Domains and Wavelo and will guide the next phase of our growth strategy.
At the same time, we’re actively preparing for what comes next. We’re evaluating reinvestment opportunities so we’re ready to move with focus and speed once the time is right. Operationally, we’re staying disciplined, driving efficiency, continuing to deleverage, and building on our momentum across revenue, margin, and adjusted EBITDA. Our board, with broad representation of our cap table and with highly relevant skills to the tasks at hand, is deeply engaged with leadership in transforming Tucows. There is much work to do, and I’m grateful to have a deep bench in our board, our leadership, and our teams to drive and support that effort. I look forward to sharing more about our plans in the upcoming quarters.
Monica, Investor Relations, Tucows: Thank you for listening to our Q&A for Q3. If you feel that the recorded answers or any direct email you received do not address your questions, please follow up with us at [email protected].
