Tucows Inc.

Welcome to the 2COWS Second Quarter 2026 Management Commentary. We have pre-recorded 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 and business segment commentary from David Woroch, President and CEO of 2COWS and 2COWS Domains, followed by Ivan Ivanov, Tucao's CFO and Ting's CEO, who will discuss our financial results in detail, and we will finish with closing remarks from David Woroch. In lieu of a live question and answer period following these remarks, shareholders, analysts, and prospective investors are invited to submit questions to Tucao's management. Please submit questions via email to ir at tucaos.com until Thursday, August 13th. Management will either address your questions directly or provide a recorded audio response and transcript that will be posted to the 2Cals website on Wednesday, August 19th at approximately 5 p.m. Eastern Time. We would also like to advise that the updated investor presentation and the 2Cals quarterly KPI summary, which provides key metrics for all of our businesses for the last six quarters, as well as for full years 2024, 2025, and 2026 year-to-date, and also includes historical financial results, is available in the Investors section of the website. Now for Management's prepared remarks. On Thursday, August 6th, 2CAS issued a news release reporting its financial results for the second quarter ended June 30th, 2026. That news release and the company's financial statements are available on the company's website at 2CAS.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 TUCA's President and Chief Executive Officer, David Woroch. Go ahead, Dave.

Thank you, Monica. We've made measurable progress in several of the areas we have identified as priorities for 2026. On improving our balance sheet and streamlining our capital structure, we recently announced an amendment and extension of our syndicated credit facility and the retirement of the preferred equity in Ting. This removes a significant financial overhang for Ting and maintains our credit flexibility. We also reported our second consecutive quarter of positive operating cash flow of $1.9 million for Q2, taking us to $5.5 million year-to-date. Ting had a significant operating improvement this quarter, helping to grow consolidated revenue and gross profit year-over-year and sequentially. Adjusted EBITDA improved from the first quarter but was down slightly year-over-year, primarily from headwinds in our legacy mobile business. Across the organization, we remain focused on disciplined execution, improving cash generation, moving toward a capital light business, and making decisions that support durable value creation. 2Cals Domain's second quarter performance continued to demonstrate the resilience of our mature, cash-generative core business supported by a growing contribution from higher-margin services. Gross margin remained essentially flat year-over-year, while revenue and adjusted EBITDA declined modestly as domains under management decreased to $21.3 million. We expect domain volumes to be stable going forward as the insourcing by the previously discussed customer has mostly wound down. Sequentially, revenue, gross margin and adjusted EBITDA all improved, supported by continued strength in expiry sales and an increased contribution from our registry services business.

Gross margin across wholesale and retail remained consistent.