Tucows Inc.

Welcome to 2COWS Third Quarter 2025 Management Commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the company. A 2COWS-generated transcript of these remarks with relevant links is also available on the company's website. We will begin with opening remarks from Elliot Noss, President and CEO of 2COWS & Ting, followed by business remarks from David Warwick, CEO of 2COWS Domains, Justin Riley, CEO of Wavelow, Elliot Noss on Ting, Ivan Ivanov, 2COW's CFO, who will discuss our financial results in detail, and we will finish with closing remarks from Elliot Noss. In lieu of a live question and answer period following these remarks, shareholders, analysts, and prospective investors are invited to submit questions to 2COW's management. Please submit questions via email to ir2cows.com until Thursday, November 13th. Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the 2Cows website on Tuesday, November 25th at approximately 5 p.m. Eastern Time. We would also like to advise that the updated investor presentation and the 2COWS quarterly KPI summary, providing key metrics for all of our businesses for the last seven quarters, as well as for full years 2023, 2024, and 2025 year to date, along with historical financial results, are available in the Investors section of the website. Now for management's prepared remarks. On Thursday, November 6th, 2Cows issued a news release reporting its financial results for the third quarter ended September 30th, 2025. That news release and the company's financial statements are available on the company's website at 2cows.com under the Investors section. Please note, 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 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable to its business. Now I would like to turn the call over to 2COW's President and Chief Executive Officer, Elliot Noss. Go ahead, Elliot.

Thank you, Monica. 2COW's top-line growth momentum of the last four fiscal years and year-to-date continues in Q3, with 7% growth year-over-year. Gross profit expanded 9% year-over-year, and adjusted EBITDA increased 53% to $13.3 million in Q3 and to $39.5 million year-to-date. This puts us well on track to meet our full-year adjusted EBITDA guidance of $47 million. Outperformance in both domains and Wavelow drove the upside, along with significantly improved adjusted EBITDA losses from Ting. We paid down a further $2.5 million on our syndicated bank loan. Corporate net debt now stands at 189.6 million, marking a sixth straight quarterly decline and bringing net leverage under three with interest coverage at 4.2 times, comfortably within our covenants. And with that, I'll turn it over to Dave Warrick, CEO of Two Cows Domains.

Thanks, Elliot. 2COW's domains delivered another solid financial quarter in Q3, with revenue, gross margin, and adjusted EBITDA each increasing year over year. The gains continue the year-to-date performance that is lifting our adjusted EBITDA slightly ahead of pace for our 2025 guidance. Revenue for Q3 grew 5% year-over-year, accompanied by a 7% increase in gross margin. Adjusted EBITDA was $12.1 million for the quarter, up 5% from the prior year. bringing year-to-date adjusted EBITDA to $36.2 million. Within our segments, our wholesale business continued its strong growth year-over-year, driven by consistent reseller demand and particularly by higher margin value-added services. Q3 revenue for the wholesale channel rose 5% year-over-year to $58 million compared to $55 million for Q3 of last year. Wholesale gross margin increased 10% to $15.8 million from $14.4 million last year. Within the wholesale channel, Domain Services delivered $10.1 million of gross margin, up 4% from $9.7 million in Q3 2024. Value Added Services had another exceptional quarter, generating $5.7 million in gross margin for a year-over-year gain of 21%, driven by strong sales from our expiry stream. The retail segment posted a modest revenue increase of 2% year-over-year to $9.8 million, and gross margin was flat at $5.5 million. Total domains under management and transaction volumes declined at 9% and 10% year-over-year, respectively, reflecting the impact of one wholesale customer migrating the bulk of its portfolio in-house. We've discussed this transaction over the past two quarters and expect its effects on domains under management to conclude in Q4. with the year-over-year impact on domain transactions continuing through next year when the full annual renewal cycle completes. Importantly, despite this transitional reduction in domains and transactions, which we have experienced from time to time in our 25-year history, our diversified reseller base continues to drive stable and growing gross margin for the business. Net of some atypical registration activity Our renewal rate for Q3 was approximately 74% across all TLDs for the Two Cows Domains brands. And while in the lower end, it remains within our historical range and above the industry average. Also worth noting, a slightly lower renewal rate does translate into more names expiring, which feeds into our expiry stream auction and sales. Turning to our registry services business, we have now been operating the registry platform for Nixie, the National Internet Exchange of India, and registry operator of the .in Country Code TLD for six months. Our partnership is going well, and we have recently started to explore new and interesting initiatives to expand our collaboration with Nixie. Our engagement with Radix remains equally strong, and although the migration has been postponed to early 2026, our teams and systems are ready and fully prepared to onboard and migrate more than 10 million domains across the Radix TLDs when the process starts. As mentioned last quarter, these two partnerships together position the 2CAS registry segment to manage nearly 17 million domains. 2CAS Domains continues to deliver consistent revenue and margin expansion, highlighting our solid fundamentals and strength of our global platform. We're well positioned for Q4 and into 2026. Thanks for listening. And now over to Justin Riley, CEO of Wavelow.