TUCOWS INC /PA/

Previous wording

This Quarterly Report on Form 10-Q contains, in addition to historical information, forward-looking statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” and other similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this report include statements regarding, among other things, the competition we expect to encounter as our business develops and competes in a broader range of Internet services, the Company's foreign currency requirements, specifically for the Canadian dollar and Euro; Wavelo, and Ting subscriber growth and retention rates; the number of new, renewed and transferred-in domain names we register as our business develops and competes; the effect of a potential generic top level domain (“gTLD”) expansion by the Internet Corporation for Assigned Names and Numbers (“ICANN”) on the number of domains we register and the impact it may have on related revenues; our belief regarding the underlying platform for our domain services; our expectation regarding the trend of sales of domain names; our belief that, by increasing the number of services we offer, we will be able to generate higher revenues; our expectation regarding litigation; the potential impact of current and pending claims on our business; our valuations of certain deferred tax assets; our expectation to collect our outstanding receivables, net of our allowance for doubtful accounts; our expectation regarding fluctuations in certain expense and cost categories; our expectations to obtain additional financing to further accelerate the Ting Internet footprint while sustaining liquidity; our expectations regarding our unrecognized tax; our expectations regarding cash from operations to fund our business; the timing, implementation and impact of the capital efficiency plan; the impact of cancellations of or amendments to market development fund programs under which we receive funds; our expectation regarding our ability to manage realized gains/losses from foreign currency contracts; our partnership with an affiliate of Generate; and general business conditions and economic uncertainty. These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Many factors affect our ability to achieve our objectives and to successfully develop and commercialize our services including:

Current wording

This Quarterly Report on Form 10-Q contains, in addition to historical information, forward-looking statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” and other similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this report include statements regarding, among other things, the competition we expect to encounter as our business develops and competes in a broader range of Internet services, the Company's foreign currency requirements, specifically for the Canadian dollar and Euro; Wavelo, and Ting subscriber growth and retention rates; the number of new, renewed and transferred-in domain names we register as our business develops and competes; the effect of a potential generic top level domain (“gTLD”) expansion by the Internet Corporation for Assigned Names and Numbers (“ICANN”) on the number of domains we register and the impact it may have on related revenues; our belief regarding the underlying platform for our domain services; our expectation regarding the trend of sales of domain names; our belief that, by increasing the number of services we offer, we will be able to generate higher revenues; our expectation regarding litigation; the potential impact of current and pending claims on our business; our valuations of certain deferred tax assets; our expectation to collect our outstanding receivables, net of our allowance for doubtful accounts; our expectation regarding fluctuations in certain expense and cost categories; our expectations to obtain additional financing to further accelerate the Ting Internet footprint while sustaining liquidity; our expectations regarding the evaluation of our strategic alternatives for Ting; our expectations regarding our unrecognized tax; our expectations regarding cash from operations to fund our business; the timing, implementation and impact of the capital efficiency plan; the impact of cancellations of or amendments to market development fund programs under which we receive funds; our expectation regarding our ability to manage realized gains/losses from foreign currency contracts; our partnership with an affiliate of Generate; and general business conditions and economic uncertainty. These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Many factors affect our ability to achieve our objectives and to successfully develop and commercialize our services including:

Previous wording

Our Chief Executive Officer ("CEO"), who is also our chief operating decision maker, regularly reviews the operating results of Ting, Wavelo and Tucows Domains as three distinct segments in order to make key operating decisions as well as evaluate segment performance. Certain revenues and expenses disclosed under the Corporate category are excluded from segment adjusted earnings before interest, tax, depreciation and amortization ("Segment Adjusted EBITDA") results as they are centrally managed and not monitored by or reported to our CEO by segment, including mobile retail services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate Information Technology ("IT") shared services.

Current wording

Our Chief Executive Officer ("CEO"), who is also our chief operating decision maker, regularly reviews the operating results of Ting, Wavelo and Tucows Domains as three distinct segments in order to make key operating decisions as well as evaluate segment performance. Certain revenues and expenses disclosed under the Corporate category are excluded from segment adjusted earnings before interest, tax, depreciation and amortization ("Segment Adjusted EBITDA") results as they are centrally managed and not monitored by or reported to our CEO by segment, including mobile retail services, eliminations of intersegment transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate Information Technology ("IT") shared services.

Previous wording

For the three months ended June 30, 2025 and June 30, 2024, we reported net revenue of $98.5 million and $89.4 million, respectively.

Current wording

For the three months ended September 30, 2025 and September 30, 2024, we reported net revenue of $98.6 million and $92.3 million, respectively.

Previous wording

For the six months ended June 30, 2025 and June 30, 2024, we reported net revenue of $193.1 million and $176.9 million, respectively.

Current wording

For the nine months ended September 30, 2025 and September 30, 2024, we reported net revenue of $291.6 million and $269.2 million, respectively.

Previous wording

As of June 30, 2025, Ting Internet had access to 132,000 owned infrastructure serviceable addresses, 66,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management; compared to having access to 128,000 owned infrastructure serviceable addresses, 36,000 partner infrastructure serviceable addresses and 48,000 active subscribers under its management as of June 30, 2024. These figures exclude any changes in serviceable addresses and accounts attributable to Simply Bits.

Current wording

As of September 30, 2025, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 88,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management; compared to having access to 132,000 owned infrastructure serviceable addresses, 41,000 partner infrastructure serviceable addresses and 50,000 active subscribers under its management as of September 30, 2024. These figures exclude any changes in serviceable addresses and accounts attributable to Simply Bits.

Previous wording

On February 7, 2024 Ting committed to the February 2024 Workforce Reduction, which aimed to realign the Company's operational structure within the Ting operating segment and reduce Ting's workforce by 13%, or 7% of the Company’s total workforce, to better support strategic objectives. The February 2024 Workforce Reduction was designed to streamline operations and reduce operating expenses within the Ting operating segment. Substantially all of the employees impacted by the workforce reduction were notified on February 7, 2024 and have since exited the Company. The Company incurred non-recurring charges of approximately $3.2 million in the first quarter of fiscal 2024 in connection with the workforce reduction, primarily consisting of severance payments, notice pay, employee benefits contributions and outplacement costs.

Current wording

On February 7, 2024 Ting committed to the February 2024 Workforce Reduction, which aimed to realign the Company's operational structure within the Ting operating segment and reduce Ting's workforce by 13%, or 7% of the Company’s total workforce, to better support strategic objectives. The February 2024 Workforce Reduction was designed to streamline operations and reduce operating expenses within the Ting operating segment. Substantially all of the employees impacted by the workforce reduction were notified on February 7, 2024 and have since exited the Company. The Company incurred non-recurring charges of approximately $3.2 million in the first quarter of its prior fiscal year, which ended December 31, 2024 ("Fiscal 2024") in connection with the workforce reduction, primarily consisting of severance payments, notice pay, employee benefits contributions and outplacement costs.

Previous wording

The February 2024 Workforce Reduction and 2024 Capital Efficiency Plan realized personnel and related expense (net of capitalization) savings with the majority of the savings in sales and marketing, including related network support functions, followed by smaller impacts in technical operations and development, direct cost of revenues, network, general and administrative, and other costs. In the prior fiscal year ended December 31, 2024 ("Fiscal 2024") the realized savings were partially offset by costs associated with both plans. These costs referenced above were classified as transitional and were excluded in our Adjusted EBITDA, which is a non-GAAP financial measure. Please see discussion of Adjusted EBITDA as well as the Adjusted EBITDA reconciliation to net income in the Results of Operations section below. The 2024 Capital Efficiency Plan has also translated into reduced capital expenditures related to growth and expansion of new markets, as Ting shifted focus to completing builds in existing markets.

Current wording

The February 2024 Workforce Reduction and 2024 Capital Efficiency Plan realized personnel and related expense (net of capitalization) savings with the majority of the savings in sales and marketing, including related network support functions, followed by smaller impacts in technical operations and development, direct cost of revenues, network, general and administrative, and other costs. In Fiscal 2024 the realized savings were partially offset by costs associated with both plans. These costs referenced above were classified as transitional and were excluded in our Adjusted EBITDA, which is a non-GAAP financial measure. Please see discussion of Adjusted EBITDA as well as the Adjusted EBITDA reconciliation to net income in the Results of Operations section below. The 2024 Capital Efficiency Plan has also translated into reduced capital expenditures related to growth and expansion of new markets, as Ting shifted focus to completing builds in existing markets.

Previous wording

Wholesale, primarily branded as OpenSRS, eNom, EPAG and Ascio, derives revenue from its domain name registration service. Together the OpenSRS, eNom, EPAG and Ascio Domain Services manage 24.0 million domain names under the Tucows, eNom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management have decreased slightly by 0.4 million since June 30, 2024.

Current wording

Wholesale, primarily branded as OpenSRS, eNom, EPAG and Ascio, derives revenue from its domain name registration service. Together the OpenSRS, eNom, EPAG and Ascio Domain Services manage 22.3 million domain names under the Tucows, eNom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management have decreased by 2.3 million since September 30, 2024.

Previous wording

As an ISP, we have invested and expect to continue to invest in selective fiber to the home (“FTTH”) deployments in select markets in the United States. The investments are a reflection of our ongoing efforts to build FTTH networks via public-private partnerships in communities we identify as having strong, unmet demand for FTTH services. Given the significant upfront build and operational investments for these FTTH deployments, there is risk that future technological and regulatory changes as well as competitive responses from incumbent local providers, may result in us not fully recovering these investments.

Current wording

As an ISP, we have invested and expect to continue to invest in selective fiber to the home (“FTTH”) deployments in select markets in the United States. The investments are a reflection of our ongoing efforts to build FTTH networks via public-private partnerships in communities we identify as having strong, unmet demand for FTTH services. Given the significant upfront build and operational investments for these FTTH deployments, there is risk that we may not fully recover these investments as a result of future technological and regulatory changes, competitive responses from incumbent local providers, and slower than expected market penetration or otherwise.

Previous wording

The Company is entitled to a long-term payment stream that is a function of the margin generated by the transferred subscribers over the 10-year term of the EchoStar Purchase Agreement executed in the fiscal year ended December 31, 2020 (“Fiscal 2020”). This consideration structure may not prove to be successful or profitable in the long-term to us if the existing subscriber base churns at an above average rate. Additionally, given EchoStar controls the revenues and costs incurred associated with the acquired subscribers, there could arise a situation where profitability for the subscriber base is diminished either by lower price points or cost inflation. Additionally, as part of the EchoStar Purchase Agreement, the Company retained a small number of customer accounts associated with one MNO agreement that was not reassigned to EchoStar at time of sale. We continue to be subject to the minimum revenue commitments previously agreed to with this excluded MNO agreement. The Company is able to continue adding customers under the excluded MNO network in order to meet the commitment. However, with no direct ability to change customer pricing and limited ability to renegotiate contract costs or significant terms, the Company may be unable to meet the minimum commitments with this MNO partner and could incur significant and recurring penalties until such a time that the contract is complete. These penalties would negatively impact our operational performance and financial results if enforced by the MNO. As at June 30, 2025, the Company has accrued $1.1 million** **of penalties associated with the minimum commitment shortfall. The Company expects to incur penalties throughout 2025 and thereafter until the contract expires.

Current wording

The Company is entitled to a long-term payment stream that is a function of the margin generated by the transferred subscribers over the 10-year term of the EchoStar Purchase Agreement executed in the fiscal year ended December 31, 2020 (“Fiscal 2020”). This consideration structure may not prove to be successful or profitable in the long-term to us if the existing subscriber base churns at an above average rate. Additionally, given EchoStar controls the revenues and costs incurred associated with the acquired subscribers, there could arise a situation where profitability for the subscriber base is diminished either by lower price points or cost inflation. Additionally, as part of the EchoStar Purchase Agreement, the Company retained a small number of customer accounts associated with one MNO agreement that was not reassigned to EchoStar at time of sale. We continue to be subject to the minimum revenue commitments previously agreed to with this excluded MNO agreement. The Company is able to continue adding customers under the excluded MNO network in order to meet the commitment. However, with no direct ability to change customer pricing and limited ability to renegotiate contract costs or significant terms, the Company may be unable to meet the minimum commitments with this MNO partner and could incur significant and recurring penalties until such a time that the contract is complete. These penalties would negatively impact our operational performance and financial results if enforced by the MNO. As at September 30, 2025, the Company has accrued $1.3 million** **of penalties associated with the minimum commitment shortfall. The Company expects to incur penalties throughout 2025 and thereafter until the contract expires.

Previous wording

The preparation of our consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience, available market information, as applicable, and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Under different assumptions or conditions, the actual results will differ, potentially materially, from those previously estimated. Many of the conditions impacting these assumptions and estimates are outside of the Company's control. Management evaluates its estimates on an on-going basis. There have been no material changes to the critical accounting estimates as previously disclosed in Part II, Item 8 of our 2024 Annual Report as of the reporting date.

Current wording

The preparation of our Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience, available market information, as applicable, and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Under different assumptions or conditions, the actual results will differ, potentially materially, from those previously estimated. Many of the conditions impacting these assumptions and estimates are outside of the Company's control. Management evaluates its estimates on an on-going basis. There have been no material changes to the critical accounting estimates as previously disclosed in Part II, Item 8 of our 2024 Annual Report as of the reporting date.

Previous wording

RESULTS OF OPERATIONS FOR THE three and six months ended June 30, 2025 AS COMPARED TO THE three and six months ended June 30, 2024

Current wording

RESULTS OF OPERATIONS FOR THE three and nine months ended September 30, 2025 AS COMPARED TO THE three and nine months ended September 30, 2024

Previous wording

Total net revenues for the three months ended June 30, 2025 increased by $9.1 million, or 10%, to $98.5 million when compared to the three months ended June 30, 2024. The increase in net revenue was driven by Tucows Domains, Wavelo, and Ting; partially offset by a decline in revenues from Mobile Services and eliminations. The Tucows Domains segment increased $5.2 million primarily driven by passthrough pricing increases and strong expiry auction revenue performance. The Wavelo segment increased $2.2 million in the current period primarily driven by increased revenues from both existing and new customers. The Ting segment increased $1.8 million in the current period as a result of subscriber growth on our Fiber network across the United States. Mobile Services and eliminations decreased by $0.2 million attributable to decreased telephony services and decreased transitional services revenues, as well as a slight increase in intercompany revenues.

Current wording

Total net revenues for the three months ended September 30, 2025 increased by $6.3 million, or 7%, to $98.6 million when compared to the three months ended September 30, 2024. The increase in net revenue was driven by Tucows Domains, Wavelo, and Ting; partially offset by a decline in revenues from Mobile Services and eliminations. The Tucows Domains segment increased $3.1 million primarily driven by passthrough pricing increases and strong expiry auction revenue performance. The Wavelo segment increased $1.8 million in the current period primarily driven by increased revenues from both existing and new customers. The Ting segment increased $1.7 million in the current period as a result of subscriber growth on our Fiber network across the United States. Mobile Services and eliminations decreased by $0.3 million attributable to decreased telephony services and decreased transitional services revenues, as well as a slight increase in inter-segment revenues.

Previous wording

Total net revenues for the six months ended June 30, 2025 increased by $16.2 million, or 9%, to $193.1 million when compared to the six months ended June 30, 2024. The increase in net revenue was driven by Tucows Domains, Wavelo, and Ting; partially offset by a decline in revenues from Mobile Services and eliminations. The Tucows Domains segment increased $8.6 million primarily driven by passthrough pricing increases and strong expiry auction revenue performance. The Wavelo segment increased $4.2 million in the current period primarily driven by increased revenues from both existing and new customers. The Ting segment increased $4.1 million in the current period as a result of subscriber growth on our Fiber network across the United States. Mobile Services and eliminations decreased by $0.6 million attributable to decreased telephony services and decreased transitional services revenues, as well as a slight increase in intercompany revenues.

Current wording

Total net revenues for the nine months ended September 30, 2025 increased by $22.4 million, or 8%, to $291.6 million when compared to the nine months ended September 30, 2024. The increase in net revenue was driven by Tucows Domains, Wavelo, and Ting; partially offset by a decline in revenues from Mobile Services and eliminations. The Tucows Domains segment increased $11.7 million primarily driven by passthrough pricing increases and strong expiry auction revenue performance. The Wavelo segment increased $5.9 million in the current period primarily driven by increased revenues from both existing and new customers. The Ting segment increased $5.7 million in the current period as a result of subscriber growth on our Fiber network across the United States. Mobile Services and eliminations decreased by $0.9 million attributable to decreased telephony services and decreased transitional services revenues, as well as a slight increase in inter-segment revenues.

Previous wording

Deferred revenue at June 30, 2025, increased by $5.9 million to $162.7 million from $156.8 million at December 31, 2024. This was driven by Ting construction mobilization in a new partner market and furthered by an increase in Tucows Domains current period billings for domain name registrations and service renewals, characteristic of the seasonal renewal pattern we see during the beginning of a Fiscal Year, as well as the increase in pricing through the current period being passed through from select registry cost increases. This was slightly offset by a decrease in Wavelo as bundled professional services expired and were recognized into revenue.

Current wording

Contract liabilities at September 30, 2025, increased by $1.9 million to $158.7 million from $156.8 million at December 31, 2024. This was primarily driven by Ting construction mobilization in a new partner market. This was partially offset by a decrease in Tucows Domains and by lower billings due to a decrease in domain names under management, as well as a decrease in Wavelo as bundled professional services available in select customer contracts expired and were recognized into revenue.

Previous wording

During both the three and six months ended June 30, 2025, a customer, EchoStar, within our Wavelo segment accounted for 12% and 12% of total net revenues, respectively. As of June 30, 2025, EchoStar also represented 56% of total accounts receivable. As of December 31, 2024 EchoStar represented 56% of accounts receivable. Though a significant portion of the Company’s domain services revenues are prepaid by our customers, where the Company does collect receivables, management judgment is required at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing basis, we assess the ability of our customers to make required payments. Our allowance for doubtful accounts was $1.1 million as of June 30, 2025 and $0.9 million as of December 31, 2024, respectively. Based on this assessment, we expect the carrying amount of our outstanding receivables, net of allowance for doubtful accounts, to be fully collected.

Current wording

During both the three and nine months ended September 30, 2025, a customer, EchoStar, within our Wavelo segment accounted for 12% and 12% of total net revenues, respectively. As of September 30, 2025, EchoStar also represented 51% of total accounts receivable. As of December 31, 2024 EchoStar represented 56% of accounts receivable. Though a significant portion of the Company’s domain services revenues are prepaid by our customers, where the Company does collect receivables, management judgment is required at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing basis, we assess the ability of our customers to make required payments. Our allowance for doubtful accounts was $1.0 million as of September 30, 2025 and $0.9 million as of December 31, 2024, respectively. Based on this assessment, we expect the carrying amount of our outstanding receivables, net of allowance for doubtful accounts, to be fully collected.

Previous wording

Ting generated $16.4 million in net revenue during the three months ended June 30, 2025, up $1.8 million, or 13%, compared to the three months ended June 30, 2024. This growth is driven by subscriber growth across our Fiber network and small increases in average revenue per user ("ARPU") relative to the three months ended June 30, 2024, as well as the continued expansion of our Ting Internet footprint to new Ting towns throughout the United States.

Current wording

Ting generated $17.0 million in net revenue during the three months ended September 30, 2025, up $1.7 million, or 11%, compared to the three months ended September 30, 2024. This growth is driven by subscriber growth across our Fiber network and small increases in average revenue per user ("ARPU") relative to the three months ended September 30, 2024, as well as from the continued growth of available serviceable addresses in Ting towns throughout the United States.

Previous wording

Ting generated $32.7 million in net revenue during the six months ended June 30, 2025, up $4.0 million, or 14%, compared to the six months ended June 30, 2024. This growth is driven by subscriber growth across our Fiber network and small increases in average revenue per user ("ARPU") relative to the six months ended June 30, 2024, as well as the continued expansion of our Ting Internet footprint to new Ting towns throughout the United States.

Current wording

Ting generated $49.7 million in net revenue during the nine months ended September 30, 2025, up $5.7 million, or 13%, compared to the nine months ended September 30, 2024. This growth is driven by subscriber growth across our Fiber network and small increases in ARPU relative to the nine months ended September 30, 2024, as well as from the continued growth of available serviceable addresses in Ting towns throughout the United States.

Previous wording

As of June 30, 2025, Ting Internet had access to 132,000 owned infrastructure serviceable addresses, 66,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management; compared to having access to 128,000 owned infrastructure serviceable addresses, 36,000 partner infrastructure serviceable addresses and 48,000 active subscribers under its management as of June 30, 2024. These figures exclude any changes in serviceable addresses and accounts attributable to the Simply Bits acquisition.

Current wording

As of September 30, 2025, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 88,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management; compared to having access to 132,000 owned infrastructure serviceable addresses, 41,000 partner infrastructure serviceable addresses and 50,000 active subscribers under its management as of September 30, 2024. These figures exclude any changes in serviceable addresses and accounts attributable to the Simply Bits acquisition.

Previous wording

Net revenues from Wavelo Platform Services for the three months ended June 30, 2025, increased by $2.2 million, or 21%, to $12.7 million as compared to the three months ended June 30, 2024. The increase in net revenue is driven by incremental revenues from existing customers, EchoStar following contract renewal, Ting, as well as new customers. Wavelo revenues continue to benefit from our customer's own subscriber growth. Intercompany revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and other - Mobile Services and Eliminations.

Current wording

Net revenues from Wavelo Platform Services for the three months ended September 30, 2025, increased by $1.8 million, or 18%, to $11.9 million as compared to the three months ended September 30, 2024. The increase in net revenue is driven by incremental revenues from existing customers, EchoStar following contract renewal, Ting, as well as new customers. Wavelo revenues continue to benefit from our customer's own subscriber growth. Intersegment revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and other - Mobile Services and Eliminations.

Previous wording

Net revenues from Wavelo Platform Services for the six months ended June 30, 2025, increased by $4.2 million, or 21%, to $24.1 million as compared to the six months ended June 30, 2024. The increase in net revenue is driven by incremental revenues from existing customers, EchoStar following contract renewal, Ting, as well as new customers. Wavelo revenues continue to benefit from our customer's own subscriber growth. Intercompany revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and all other - Mobile Services and Eliminations.

Current wording

Net revenues from Wavelo Platform Services for the nine months ended September 30, 2025, increased by $6.0 million, or 20%, to $35.9 million as compared to the nine months ended September 30, 2024. The increase in net revenue is driven by incremental revenues from existing customers, EchoStar following contract renewal, Ting, as well as new customers. Wavelo revenues continue to benefit from our customer's own subscriber growth. Intersegment revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and all other - Mobile Services and Eliminations.

Previous wording

Net revenues from Other Professional Services for the six months ended June 30, 2025 decreased from less than $0.1 million in the six months ended June 30, 2024 to NIL million in the current period. These revenues related to the provision of standalone technology services development work for our CSP customers and are non-recurring and often one-time in nature, and expectantly can fluctuate period over period. These revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers.

Current wording

Net revenues from Other Professional Services for the nine months ended September 30, 2025 decreased from less than $0.1 million in the nine months ended September 30, 2024 to NIL million in the current period. These revenues related to the provision of standalone technology services development work for our CSP customers and are non-recurring and often one-time in nature, and expectantly can fluctuate period over period. These revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers.

Previous wording

During the three months ended June 30, 2025, Wholesale domain services net revenue increased by $3.1 million, or 6%, to $51.6 million as compared to the three months ended June 30, 2024. Increases from Wholesale domain registrations were driven by various passthrough price increases from select registry cost increases since June 30, 2024.

Current wording

During the three months ended September 30, 2025, Wholesale domain services net revenue increased by $2.0 million, or 4%, to $51.9 million as compared to the three months ended September 30, 2024. Increases from Wholesale domain registrations were driven by various passthrough price increases from select registry cost increases since September 30, 2024, as well as increased recognition of revenue previously deferred, offsetting the lower billings from the decrease in domain names under management.

Previous wording

During the six months ended June 30, 2025, Wholesale domain services net revenue increased by $4.9 million, or 5%, to $101.6 million as compared to the six months ended June 30, 2024. Increases from Wholesale domain registrations were driven by various passthrough price increases from select registry cost increases since June 30, 2024.

Current wording

During the nine months ended September 30, 2025, Wholesale domain services net revenue increased by $6.9 million, or 5%, to $153.4 million as compared to the nine months ended September 30, 2024. Increases from Wholesale domain registrations were driven by various passthrough price increases from select registry cost increases since September 30, 2024, as well as increased recognition of revenue previously deferred, offsetting the lower billings from the decrease in domain names under management.

Previous wording

As of June 30, 2025, together, the OpenSRS, eNom, EPAG, and Ascio Domain Services manage 24.0 million domain names under the Tucows, eNom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management was down by 0.5 million domain names compared to June 30, 2024.

Current wording

As of September 30, 2025, together, the OpenSRS, eNom, EPAG, and Ascio Domain Services manage 22.3 million domain names under the Tucows, eNom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management was down by 2.3 million domain names compared to September 30, 2024.

Previous wording

During the three months ended June 30, 2025, value-added services net revenue increased by $1.3 million, or 29%, to $5.8 million as compared to the three months ended June 30, 2024. The increase in value-added service revenue was driven by strong expiry auction sales in the current period, slightly offset by a small decrease in certificates sales.

Current wording

During the three months ended September 30, 2025, value-added services net revenue increased by $0.9 million, or 17%, to $6.1 million as compared to the three months ended September 30, 2024. The increase in value-added service revenue was driven by strong expiry auction sales in the current period, slightly offset by a small decrease in certificates sales.

Previous wording

During the six months ended June 30, 2025, value-added services net revenue increased by $2.5 million, or 27%, to $11.7 million as compared to the six months ended June 30, 2024. The increase in value-added service revenue was driven by strong expiry auction sales in the current period, slightly offset by a small decrease in certificates sales.

Current wording

During the nine months ended September 30, 2025, value-added services net revenue increased by $3.4 million, or 24%, to $17.8 million as compared to the nine months ended September 30, 2024. The increase in value-added service revenue was driven by strong expiry auction sales in the current period, slightly offset by a small decrease in certificates sales.

Previous wording

During the three months ended June 30, 2025, retail domain services net revenue increased by $1.0 million, or 11%, to $10.3 million as compared to the three months ended June 30, 2024. This was driven by increased portfolio names sales and retail names sales in the current period.

Current wording

During the three months ended September 30, 2025, retail domain services net revenue increased by $0.1 million, or 1%, to $9.8 million as compared to the three months ended September 30, 2024. This was driven by increased retail names sales in the current period due to passthrough price increases, slightly offset by a decrease in portfolio sales.

Previous wording

During the six months ended June 30, 2025, retail domain services net revenue increased by $1.2 million, or 7%, to $19.6 million as compared to the six months ended June 30, 2024. This was primarily driven by price increases across domain name registrations and RealNames products in the current period, as well as an increase in portfolio names sales.

Current wording

During the nine months ended September 30, 2025, retail domain services net revenue increased by $1.5 million, or 5%, to $29.5 million as compared to the nine months ended September 30, 2024. This was primarily driven by passthrough price increases across domain name registrations and RealNames products in the current period, as well as an increase in portfolio names sales.

Previous wording

Net revenues from Mobile Services and eliminations for the three months ended June 30, 2025 decreased by $0.2 million or 10%, to $1.8 million as compared to the three months ended June 30, 2024. This was driven byan increase in intercompany corporate eliminations of $0.1 million, primarily a result of increased revenues associated with platform billing between Wavelo and Ting. This was also furthered by decreased transitional services of $0.1 million, from a decreased level of dedicated support services provided to EchoStar in connection with the legacy Ting Mobile customer base, as expected.

Current wording

Net revenues from Mobile Services and eliminations for the three months ended September 30, 2025 decreased by $0.3 million or 14%, to $1.9 million as compared to the three months ended September 30, 2024. This was driven byan increase in inter-segment corporate eliminations of $0.2 million, primarily a result of increased revenues associated with platform billing between Wavelo and Ting. This was also furthered by decreased transitional services of $0.1 million, from a decreased level of dedicated support services provided to EchoStar in connection with the legacy Ting Mobile customer base, as expected.

Previous wording

Net revenues from Mobile Services and eliminations for the six months ended June 30, 2025 decreased by $0.7 million or 17%, to $3.4 million as compared to the six months ended June 30, 2024. This was driven byan increase in intercompany corporate eliminations of $0.3 million, primarily a result of increased revenues associated with platform billing between Wavelo and Ting. This was also furthered by decreased transitional services of $0.2 million, from a decreased level of dedicated support services provided to EchoStar in connection with the legacy Ting Mobile customer base, as expected. Furthermore, there wasdecreased revenues of $0.1 million associated with the mobile telephony services and device revenues from the small group of customers retained by the Company as part of the EchoStar Purchase Agreement primarily as a result of limited subscriber growth and plan mix shifting towards lower price point rate plans compared to the six months ended June 30, 2024.

Current wording

Net revenues from Mobile Services and eliminations for the nine months ended September 30, 2025 decreased by $1.0 million or 16%, to $5.3 million as compared to the nine months ended September 30, 2024. This was driven byan increase in inter-segment corporate eliminations of $0.5 million, primarily a result of increased revenues associated with platform billing between Wavelo and Ting. This was also furthered by decreased transitional services of $0.3 million, from a decreased level of dedicated support services provided to EchoStar in connection with the legacy Ting Mobile customer base, as expected. Furthermore, there wasdecreased revenues of $0.1 million associated with the mobile telephony services and device revenues from the small group of customers retained by the Company as part of the EchoStar Purchase Agreement primarily as a result of limited subscriber growth and plan mix shifting towards lower price point rate plans compared to the nine months ended September 30, 2024.

Previous wording

Total cost of revenues for the three months ended June 30, 2025, increased by $7.7 million or 11%, to $76.4 million from $68.6 million in the three months ended June 30, 2024. The three-month increase in cost of revenues was driven by increases across Ting, Tucows Domains, and Mobile Service and eliminations of $3.9 million, $2.5 million, and $1.5 million, respectively. The increase in Ting of $3.9 million was primarily driven by a $3.0 million one-time Ting lease accounting adjustment, with the remaining variance driven by costs of revenues associated with growth in active subscribers. The increase in Tucows Domains of $2.5 million was primarily a result of cost increases from select registries through the current period. The increase in Mobile Services and eliminations of $1.5 million was primarily a result of higher mobile telephony services costs due to MNO penalties and plan mix changes impacting usage in the current period. These increases were partially offset by a decrease in Wavelo of $0.2 million driven by the absence of the amortization of previously capitalized costs associated with EchoStar contract. Costs in Network Expenses remained flat by value and decreased as a percentage of total cost of revenues by 3%.

Current wording

Total cost of revenues for the three months ended September 30, 2025, increased by $4.3 million or 6%, to $74.4 million from $70.1 million in the three months ended September 30, 2024. The three-month increase in cost of revenues was driven by increases across Ting, Tucows Domains, Mobile Service and eliminations, and Wavelo of $2.2 million, $1.7 million, $1.3 million, and less than $0.1 million, respectively. The increase in Ting of $2.2 million was aligned with growth in active subscribers. The increase in Tucows Domains of $1.7 million was primarily a result of cost increases from select registries through the current period. The increase in Mobile Services and eliminations of $1.3 million was primarily a result of higher mobile telephony services costs due to MNO minimums and plan mix changes impacting usage in the current period. The increase in Wavelo of less than $0.1 million was primarily driven by slight increases in cloud hosting costs. These increases were partially offset by a decrease in Network Expenses of $0.9 million, driven by decreased people costs following the 2024 Capital Efficiency Plan and other restructuring efforts, as well as a decrease in impairment charges within the Ting segment compared to the three months ended September 30, 2024.

Previous wording

Total cost of revenues for the six months ended June 30, 2025, increased by $9.6 million or 7%, to $147.4 million from $137.8 million in the six months ended June 30, 2024. The six-month increase in cost of revenues was driven by increases across Ting, Tucows Domains, and Mobile Service and eliminations of $4.4 million, $4.3 million, and $2.9 million, respectively. The increase in Ting of $4.4 million was primarily driven by a $3.0 million one-time Ting lease accounting adjustment, with the remaining variance driven by costs of revenues associated with growth in active subscribers. The increase in Tucows Domains of $4.3 million was primarily a result of cost increases from select registries through the current period. The increase in Mobile Services and eliminations of $2.9 million was primarily a result of higher mobile telephony services costs due to MNO penalties and plan mix changes in the current period. These increases were partially offset by decreases across Network Expenses and Wavelo of $1.4 million and $0.4 million, respectively. The decrease in Network Expenses of $1.4 million was primarily driven by decreased people and software costs following the execution of the 2024 Capital Efficiency Plan in October 2024. The decrease in Wavelo of $0.4 million was driven by the absence of the amortization of previously capitalized costs associated with EchoStar contract.

Current wording

Total cost of revenues for the nine months ended September 30, 2025, increased by $13.9 million or 7%, to $221.8 million from $207.9 million in the nine months ended September 30, 2024. The nine-month increase in cost of revenues was driven by increases across Ting, Tucows Domains, and Mobile Service and eliminations of $6.6 million, $6.0 million, and $4.2 million, respectively. The increase in Ting of $6.6 million was primarily driven by a $3.0 million one-time Ting lease accounting adjustment, with the remaining variance driven by costs of revenues associated with growth in active subscribers. The increase in Tucows Domains of $6.0 million was primarily a result of cost increases from select registries through the current period. The increase in Mobile Services and eliminations of $4.2 million was primarily a result of higher mobile telephony services costs due to MNO minimums and plan mix changes in the current period. These increases were partially offset by decreases across Network Expenses and Wavelo of $2.4 million and $0.4 million, respectively. The decrease in Network Expenses of $2.4 million was primarily driven by decreased people costs following the 2024 Capital Efficiency Plan and other restructuring efforts, as well as a decrease in colocation fees following the closure of one data center. The decrease in Wavelo of $0.4 million was driven by the absence of the amortization of previously capitalized costs associated with EchoStar contract, partially offset by increases in cloud hosting costs.

Previous wording

Deferred costs of fulfillment as of June 30, 2025, increased by $2.0 million, or 2%, to $119.0 million from $117.0 million at December 31, 2024. This was primarily driven by Tucows Domains with an increase of $1.8 million from the increase in current period billings for domain name registrations and service renewals, characteristic of the seasonal renewal pattern we see during the beginning of a Fiscal Year as well as the increase in registry costs through the current period, consistent with the increase in deferred revenues discussed above. This increase was furthered by Ting with an increase of $0.2 million related to Laguna Woods Village, California, United States construction mobilization.

Current wording

Deferred costs of fulfillment as of September 30, 2025, decreased by $0.7 million, or 1%, to $116.3 million from $117.0 million at December 31, 2024. This was primarily driven by Tucows Domains with a decrease of $1.5 million from the decrease in current period billings due to a decrease in domain names under management, consistent with the decrease in contract liabilities discussed above. This was partially offset by an increase in Ting of $0.7 million related to Laguna Woods Village, California, United States construction mobilization.

Previous wording

During the six months ended June 30, 2025, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $4.4 million, or 44%, to $14.5 million as compared to the six months ended June 30, 2024. This was primarily driven by a $3.0 million one-time Ting lease accounting adjustment to true up lease expense for three partner network leases, with the remaining variance driven by the subscriber growth across our Fiber network, consistent with the discussion in the Net Revenue section above.

Current wording

During the three months ended September 30, 2025, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $2.2 million, or 51%, to $6.5 million as compared to the three months ended September 30, 2024. This is aligned with the subscriber and serviceable address growth across our Fiber network, consistent with the discussion in the Net Revenue section above.

Previous wording

During the three months ended June 30, 2025, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $3.9 million, or 81%, to $8.7 million as compared to the three months ended June 30, 2024. This was primarily driven by a $3.0 million one-time Ting lease accounting adjustment to true up lease expense for three partner network leases, with the remaining variance driven by the subscriber growth across our Fiber network, consistent with the discussion in the Net Revenue section above.

Current wording

During the nine months ended September 30, 2025, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $6.6 million, or 46%, to $21.0 million as compared to the nine months ended September 30, 2024. This was primarily driven by a $3.0 million one-time Ting lease accounting adjustment to true up lease expense for three partner network leases, with the remaining variance driven by the subscriber and serviceable address growth across our Fiber network, consistent with the discussion in the Net Revenue section above.

Previous wording

Cost of revenues from Wavelo Platform Services for the six months ended June 30, 2025 decreased by $0.4 million, or 65%, to $0.2 million as compared to the six months ended June 30, 2024. This was driven by the absence of the amortization of previously capitalized costs incurred to fulfill the EchoStar Master Services Agreement ("MSA") over the term of the original agreement, as the initial term ended in July 2024. There were no comparable costs on renewal in January 2025.

Current wording

Cost of revenues from Wavelo Platform Services for the nine months ended September 30, 2025 decreased by $0.4 million, or 56%, to $0.3 million as compared to the nine months ended September 30, 2024. This was driven by the absence of the amortization of previously capitalized costs incurred to fulfill the EchoStar Master Services Agreement ("MSA") over the term of the original agreement, as the initial term ended in July 2024. There were no comparable costs on renewal in January 2025. This decrease was partially offset by increases in cloud hosting costs.

Previous wording

Cost of revenues from Other Professional Services for the six months ended June 30, 2025 decreased from less than $0.1 million for the six months ended June 30, 2024 to NIL million in the current period. Costs of revenues to provide other professional services change depending on the nature and scope of work we are engaged to perform for our customers for select statements of work. These cost of revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers. The decrease is aligned to the decrease in net revenues from other professional services discussed above.

Current wording

Cost of revenues from Other Professional Services for the nine months ended September 30, 2025 decreased from less than $0.1 million for the nine months ended September 30, 2024 to NIL million in the current period. Costs of revenues to provide other professional services change depending on the nature and scope of work we are engaged to perform for our customers for select statements of work. These cost of revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers. The decrease is aligned to the decrease in net revenues from other professional services discussed above.

Previous wording

Costs for Wholesale domain services for the three months ended June 30, 2025, increased by $2.3 million, or 6%, to $41.2 million, as compared to $38.9 million for the three months ended June 30, 2024. Increases from Wholesale domain registrations were primarily driven by various registry gTLD cost increases since June 30, 2024. The increase is aligned to the increase in Net Revenues discussed above.

Current wording

Costs for Wholesale domain services for the three months ended September 30, 2025, increased by $1.6 million, or 4%, to $41.8 million, as compared to $40.2 million for the three months ended September 30, 2024. Increases from Wholesale domain registrations were primarily driven by various registry gTLD cost increases since September 30, 2024, as well as increased recognition of costs previously deferred, driven by lower billings due to a decrease in domain names under management. The increase is aligned to the increase in Net Revenues discussed above.

Previous wording

Costs for Wholesale domain services for the six months ended June 30, 2025, increased by $4.0 million, or 5%, to $81.6 million, as compared to $77.6 million for the six months ended June 30, 2024. Increases from Wholesale domain registrations were primarily driven by various registry gTLD cost increases since June 30, 2024. The increase is aligned to the increase in Net Revenues discussed above.

Current wording

Costs for Wholesale domain services for the nine months ended September 30, 2025, increased by $5.6 million, or 5%, to $123.4 million, as compared to $117.8 million for the nine months ended September 30, 2024. Increases from Wholesale domain registrations were primarily driven by various registry gTLD cost increases since September 30, 2024, as well as increased recognition of costs previously deferred, driven by lower billings due to a decrease in domain names under management. The increase is aligned to the increase in Net Revenues discussed above.