Ting Report on 11-05-2015 Before Earnings Report Released

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Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows."
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
In 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting provides its own customer service, billing support systems, marketing, and sales personnel.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
An MVNO is a wireless communications services provider that does not own the wireless network infrastructure over which the MVNO provides services to its customers but enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently. In Tucows case, the wireless service provider is Sprint. While Sprint provides the wireless network, Ting provides its own customer service, billing support systems, marketing, and sales personnel.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

A Financial Model of Ting

by Hugh Pickens

Article begun November 13, 2014

I am long term investor who owns stock in Tucows. The purpose of this web site is to provide a comprehensive overview of Tucows (TCX) that documents and explains the company's business strategy and monitors the execution of that strategy with particular emphasis on Tucows' MVNO, Ting. Information about Tucows has been compiled in this report from news releases, earnings reports, earnings conferences calls, and independent reporting on Tucows and Ting.

A financial model shows Ting's past performance and predicts how Ting will perform in the future under different growth scenarios.

Contents of This Report

Executive Summary

  • Tucows consists of two separate business segments: Ting, a mobile virtual network operator (MVNO), is the high growth, high margin business segment of Tucows. The domain services business segment has steady earnings but low margins and low growth.
  • Ting began service in 2012 and up until the 4th quarter of 2014 Ting has contributed modestly to Tucows' bottom line.
  • Since launching Ting in 2012, Tucows (TCX) stock price has risen 676% through August 7, 2015.
  • Our financial model of Ting's past growth predicts that Ting will overtake domain services by Q4 2015 to become the prime driver for Tucows' future growth.


Contents

Overview of Tucows and Ting

Chart 1: Stock Price Chart for TCX from January 1, 2012 through August 7, 2015. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 676% since January 1, 2012. The S&P 500 has risen 62% over the same period.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Chart 2: Incremental Contribution from Domain Services (Before Taxes and Other Expenses)
Chart 3: Incremental Contribution from Ting (Before Taxes and Other Expenses)
Chart 4: Number of Ting Mobile Customers Note: Ting started in February 2012. Prior to the earnings report for 2013:Q4 Tucows did not break out the number of customers or devices so the number of customers in Q1 through Q3 for 2013 is estimated.

Financial Analysis of Tucows and a Financial Model of Ting

by Hugh Pickens

Article begun November 13, 2014

The purpose of this web site is to provide a comprehensive overview of Tucows (TCX) that documents and explains the company's business strategy and monitors the execution of that strategy with particular emphasis on Tucows' MVNO, Ting. Information about Tucows has been compiled in this report from news releases, earnings reports, earnings conferences calls, and independent reporting on Tucows and Ting.

A financial model shows Ting's past performance and predicts how Ting will perform in the future under different growth scenarios.

Contents of This Report

Executive Summary

  • Tucows consists of two separate business segments: Ting, a mobile virtual network operator (MVNO), is the high growth, high margin business segment of Tucows. The domain services business segment has steady earnings but low margins and low growth.
  • Ting began service in 2012 and up until the 4th quarter of 2014 Ting has contributed modestly to Tucows' bottom line.
  • Since launching Ting in 2012, Tucows (TCX) stock price has risen 676% through August 7, 2015.
  • Our financial model of Ting's past growth predicts that Ting will overtake domain services by Q4 2015 to become the prime driver for Tucows' future growth.

Original Article

The original article is available at: Ting Model and Tucows Analysis

Purpose of This Report

The purpose of this report is to:

  • Explain the rise in Tucows stock price and Ting's contribution to the increase
  • Model the contribution that Ting makes to Tucows bottom line

Disclaimer

I am long term investor who owns stock in Tucows. The purpose of this web site is to monitor Tucows so I can understand how my investment is performing. I compile information about Tucows from news releases, earnings reports, earnings conferences calls, press releases, and independent reporting on Tucows and Ting. I have built a financial earnings model to monitor Ting's past performance and to make predictions on how Ting will perform in the future under different growth scenarios. One of that attractions of reporting on Tucows is that Ting's business strategy is relatively straightforward and easy to model with a limited number of inputs. For another example of a company I own stock in and follow closely, go to my report on Phillips 66 (PSX), a much larger and more complex company.

There are three reasons I am making this information available publicly. First, I find I am more careful in my work and systematic in my approach to stock valuations when I know other people are looking at my work. Second, I would like readers of this article to send their comments, appraisals, and criticisms of my work to hughpickens at gmaildotcom so I can incorporate their ideas into my approach and improve my financial model. Third, Tucows is a small cap with a market cap of just over $300 million that is thinly traded and only being followed by three analysts. I would like the stock to become better known because I think Tucows' value will rise in a more efficient and liquid market.

This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in the company and uses this web site to follow the company. All information on this web site comes from publicly available sources. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Tucows Business Analysis

Other sections of this report on Tucows include:

Background

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993 to provide users with downloads of freeware and trial versions of shareware. The name originally was an acronym for "The Ultimate Collection Of Winsock Software". The Tucows logo is two cow heads, a play on the homophone "two cows."

In February 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). An MVNO is a wireless communications services provider that does not own the wireless network infrastructure over which the MVNO provides services to its customers. The MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently. In Tucows case, the wireless service provider is Sprint. While Sprint provides the wireless network, Ting provides customer service, billing support systems, marketing, and sales personnel. Consumer Reports reported in November, 2014 that Ting is the highest rated small mobile service provider with the best customer service of any MVNO. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”[1]

Ting's launch coincided with a rise in Tucows (TCX) stock price and since Ting's launch, Tucows (TCX) stock price has more than quintupled.

Business Segments

The most important single fact about Tucows is that the company operates two different business segments:

  • A predictable, steady, low growth, low margin wholesale domain name registrar business (Tucows is the third largest ICANN-accredited registrar in the world and the company is the largest publicly traded registrar) and
  • A high margin, high growth mobile telco business that is attempting to disrupt a huge industry with large, entrenched incumbents.

The first business is as a wholesale reseller of domain names with over 8 million domain names under management. The domain service business segment of Tucows has a large volume but modest profit margins. The domain name business is a mature business with low margins, large cash flow, steady profits and slow growth.. The business is extraordinarily "sticky." Once someone buys a domain name from the retail side of Tucows or from one of Tucows' resellers, they almost never change providers because it is a lot of trouble to transfer a domain name to a new domain name company.

The MVNO side of the business is very different from the domain name side. The MVNO business generates high profits with gross margins of 45 percent. The MVNO business is also high growth with a customer base that increases by 10 to 15 percent every quarter. Although Tucows MVNO business is only in their third year of operation, it is already a significant contributor to the company's bottom line. There are many competitors but no single company dominates the MVNO business space. MVNOs are experimenting to find the best way to target customers, advertise their plans, acquire new business, provide customer service, and bill customers to become a profitable enterprise.

One thing that Ting has in common with Tucows' domain services business segment is that both segments provide world class telephone based customer service. Tucows has been able to transfer their experience in telephone based customer service from the domain name business segment to their MVNO business where customer service has become Tucows' prime differentiator from its competitors.

Consumer Reports reported in November, 2014 that Ting is the best small mobile service provider with the best customer service of any MVNO. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”[2]

Incremental Contributions From Tucows Domain Services and Ting

The following is historical data taken from Tucows financial reports since Q1 in 2013 when Tucows began breaking out financial results from Ting. The spreadsheet shows the incremental contributions from Tucows' Domain Services and Ting. The information in this spreadsheet is the source for Charts 2 and 3 (above):[3][4][5][6]

Spreadsheet 1: 08-08-2015 2013: Q1 2013: Q2 2013: Q3 2013:Q4 2014: Q1 2014: Q2 2014: Q3 2014: Q4 2015: Q1 2015: Q2
Net Revenue All Domain Services $27,637,000 $27,439,000 $30,919,000 $33,139,000 $27,690,000 $27,328,000 $29,125,000 $27,636,000 $27,541,000 $27,471,000
Cost of Revenue All Domain Services $19,968,000 $20,068,000 $20,672,000 $24,901,000 $20,035,000 $19,696,000 $20,192,000 $20,067,000 $19,464,000 $19,752,000
Incremental Contribution from Tucows Domain Services (Before Taxes and Other Expenses) $7,669,000 $7,371,000 $10,247,000 $8,238,000 $7,655,000 $7,632,000 $8,933,000 $7,569,000 $8,077,000 $7,719,000
Net Revenue Ting $2,348,000 $3,734,000 $4,718,000 $5,729,000 $6,712,000 $8,260,000 $9,749,000 $11,166,000 $12,927,000 $15,418,000
Cost of Revenue Ting $2,110,000 $2,940,000 $3,597,000 $3,975,000 $4,281,000 $5,040,000 $5,794,000 $6,755,000 $7,345,000 $8,499,000
Incremental Contribution from Ting (Before Taxes and Other Expenses) $238,000 $794,000 $1,121,000 $1,754,000 $2,431,000 $3,220,000 $3,955,000 $4,411,000 $5,582,000 $6,919,000
Incremental Contribution from Ting and Domain Services $7,907,000 $8,165,000 $11,368,000 $8,238,000 $10,086,000 $10,852,000 $12,888,000 $11,980,000 $13,659,000 $14,638,000

Notes

Note 1: Incremental earnings reflect the contribution of the business segment before taxes and other expenses.

Note 2: All information in this table compiled from the following Tucows' earnings results:

Tucows Foreign Exchange Strategy

Five Year Chart of Canadian Dollars/ US Dollars through August 7, 2015. Up until the end of 2014 the Canadian Dollar was strong against the US Dollar so the company engaged in foreign exchange hedging to provide certainty around future costs. Tucows CEO Elliot Noss said on November 20, 2014 during the 2014 Q3 conference call that with the strengthening of the US Dollar, Tucows foreign exchange strategy will change and Tucows will go unhedged starting in 2015 to take advantage of the favorable exchange rates. "If the foreign exchange rate stays more or less in its current range, EBITDA could benefit by as much as $1 million to $1.5 million in 2015 relative to this year," said Noss.

Tucows is a Canadian company that earns most of its revenue in U.S. dollars, while most of their operating expenses including labor costs, rent, and utilities are in Canadian dollars. Up until the end of 2014 the Canadian Dollar was strong against the US Dollar so the company engaged in foreign exchange hedging to provide certainty around future costs. Tucows CEO Elliot Noss said on November 20, 2014 during the 2014 Q3 conference call that with the strengthening of the US Dollar, Tucows foreign exchange strategy will change and Tucows will go unhedged starting in 2015 to take advantage of the favorable exchange rates. "The appreciation of the Canadian dollar has been a bit of a headwind really over the last decade or so, as our expenses were that much higher relative to our revenues. You see that reflective in our 2014 numbers and our guidance. However, with the recent weakening of the Canadian dollar, we now have a bit of a tailwind. We have typically hedged out 18 months or so, but are now only hedged through the end of 2014. Thus, if the foreign exchange rate stays more or less in its current range, EBITDA could benefit by as much as $1 million to $1.5 million in 2015 relative to this year."[7]

Max Lukenbach reported on January 18, 2015 in a comment to an article about Tucows in Seeking Alpha that since Noss' announcement, the Canadian Dollar has weakened further and that this will be even more beneficial for Tucows and could "add $2,000,000 to EBITDA" during 2015.[8]

Tony Redondo wrote in Exchange Rates' on January 3, 2015 that "the majority of analysts are predicting further US Dollar strength in 2015 on the back of the strong recovery in the US economy and the monetary tightening policy embarked upon by the US Federal Reserve.[9]

Ting Financial Model

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows."
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.


Other sections of this report on Tucows include:




Profitability of Ting Mobile Through Present Quarter

Spreadsheet 2: 10-06-2015 2013:Q4 2014: Q1 2014: Q2 2014: Q3 2014: Q4 2015:Q1 2015:Q2
Number of Customers at End of This Quarter 48,000 61,000 73,000 82,000 94,000 103,000 113,000
Customers Net Additions This Quarter to Arrive at Total Customers 10,000 13,000 12,000 11,000 12,000 11,000 11,000
Quarterly Churn Rate (Monthly X3) 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%
Churned Customers 3,600 4,575 5,475 6,150 7,050 7,725 8,475
Average Customer Phone Bill per Quarter $105 $105 $105 $105 $105 $105 $105
Gross Margin 45% 45% 45% 45% 45% 45% 45%
Acquisition Costs per New Customer $100 $100 $100 $100 $100 $100 $100
Gross Income in This Quarter $5,040,000 $5,482,313 $6,747,563 $7,919,625 $8,869,875 $10,041,938 $10,947,563
Cost of Goods Sold in This Quarter $2,772,000 $3,015,272 $3,711,159 $4,355,794 $4,878,431 $5,523,066 $6,021,159
Cost to Acquire New Customers $1,360,000 $1,757,500 $1,747,500 $1,715,000 $1,905,000 $1,872,500 $1,947,500
Incremental Contribution from Ting (Before Taxes and Other Expenses) $908,000 $2,467,041 $3,036,403 $3,563,831 $3,991,444 $4,518,872 $4,926,403
Incremental Contribution from Ting per Share (Before Taxes and Other Expenses) $0.08 $0.22 $0.27 $0.31 $0.35 $0.40 $0.44

Notes and Assumptions

Note 1: Ting started in February 2012. The model goes back to Q3 in 2013. Prior to the earnings report Q3 in 2013 Tucows did not break out the number of customers or devices.[10]

Note 2: There is a discrepancy of 2,000 customers in the number of customers added for 2014:Q3 due to an new method that Ting used for counting customers. "This is the result of a one-time change in how we measure active accounts."[11]

Note 3: The number of churned customers is calculated by multiplying the monthly churn rate (2.5%) times three months per quarter times the number of customers at the end of the previous quarter. Noss said in the 2014:Q2 earnings conference that "It is also worth mentioning that after 30 days of service when customers tend to determine whether they are getting sufficient network coverage, our churn rate drops comfortably below 2% per month."

Note 4: Elliot Noss stated in the November, 2014 conference call that Ting had 82,000 customers at the end of Q3 and in the February, 2015 call that Ting had 94,000 customers at the end of Q4 for an increase of 12,000. Noss also stated they had added 11,000 net customers. The discrepancy is a rounding error.

Note 5: The "Gross Income" is calculated by multiplying the "Average Customer Phone per Quarter" times the number of customers in the previous quarter plus one half the new customers gained minus one half the lost (chruned) in the present quarter. The factor of one-half is used because it is assumed that customers are added in a steady stream so that on average the new customers added will contribute to the gross income only one half of the quarter.

Note 6: The "Cost of Goods Sold" is calculated by taking the "Gross Income" and subtracting from it the "Gross Income" times the "Gross Margin".

Note 7: The "Cost to Acquire New Customers" is calculated by mulitplying the "New Customers Added During This Quarter to Arrive at Total Customers" plus the "Churned Customers" and multiplying this times the "Acquisition Costs per New Customer".

Note 8: The "Incremental Contribution from Ting (Before Taxes and Other Expenses)" is calculated from the "Gross Income in This Quarter" and subtracting both the "Cost of Goods Sold in This Quarter" and the "Cost to Acquire New Customers".

Note 9: The "Incremental Contribution from Ting (Before Taxes and Other Expenses)" does not include taxes and other expenses which are spread over both the domain services portion to Tucows and the Ting portion of Tucows. This will be factored in at the last step of the process.

Note 10: The "Incremental Contribution from Ting per Share (Before Taxes and Other Expenses)" is calculated by dividing the "Net Income for This Quarter (before Taxes and Other Expenses)" by the 11,321,175 outstanding shares of Tucows.


Prediction of Profitability of Ting Mobile Through the Next Quarter

Spreadsheet 2: 10-06-2015 2013:Q4 2014: Q1 2014: Q2 2014: Q3 2014: Q4 2015:Q1 2015:Q2 2015:Q3
Number of Customers at End of This Quarter 48,000 61,000 73,000 82,000 94,000 103,000 113,000 123,000
Customers Net Additions This Quarter to Arrive at Total Customers 10,000 13,000 12,000 11,000 12,000 11,000 11,000 11,000
Quarterly Churn Rate (Monthly X3) 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%
Churned Customers 3,600 4,575 5,475 6,150 7,050 7,725 8,475 9,225
Average Customer Phone Bill per Quarter $105 $105 $105 $105 $105 $105 $105 $105
Gross Margin 45% 45% 45% 45% 45% 45% 45% 45%
Acquisition Costs per New Customer $100 $100 $100 $100 $100 $100 $100 $100
Gross Income in This Quarter $5,040,000 $5,482,313 $6,747,563 $7,919,625 $8,869,875 $10,041,938 $10,947,563 $11,958,188
Cost of Goods Sold in This Quarter $2,772,000 $3,015,272 $3,711,159 $4,355,794 $4,878,431 $5,523,066 $6,021,159 $6,577,003
Cost to Acquire New Customers $1,360,000 $1,757,500 $1,747,500 $1,715,000 $1,905,000 $1,872,500 $1,947,500 $2,022,500
Incremental Contribution from Ting (Before Taxes and Other Expenses) $908,000 $2,467,041 $3,036,403 $3,563,831 $3,991,444 $4,518,872 $4,926,403 $5,381,184
Incremental Contribution from Ting per Share (Before Taxes and Other Expenses) $0.08 $0.22 $0.27 $0.31 $0.35 $0.40 $0.44 $0.48

Notes

Note 1: Tucows CEO Elliot Noss stated during the Q2 2015 Conference Call on August 6, 2015 that he expected the net adds to be about the same for Q3 as in Q2.

Latest News about Tucows and Ting

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows." In 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting provides its own customer service, billing support systems, marketing, and sales personnel.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Other sections of this report on Tucows include:

October 22, 2015: CenturyLink Responds to Ting's Gigabit Launch in Holly Springs With Phantom Gigabit Service

Karl Bode reported in DSL Reports on October 22, 2015 that Ting's announcement of gigabit service in Hollys Springs has already nudged CenturyLink to begin offering gigabit service of its own in the area. "Just a day after I let Karl know that Ting is launching FTTH service here in Holly Springs NC, I get an email from CenturyLink announcing 1Gpbs service as well," notes DSLReports.com reader Shaun (see his e-mail, left). "Before this, there was zero mention that they were going to upgrade to Gbps. I currently have CenturyLink 100/50 FTTH service." However upon further inquiry CenturyLink reps admitted that the service is a bit over-marketed, and his address can't actually get gigabit service after all. According to DSL Reports CenturyLink had to apologize to Seattle residents earlier this year after the company's marketing for gigabit service wasn't reflective of actual gigabit service availability.[12]

October 20, 2015: Holly Springs is Set to be the Next Ting Internet Town

Ting announced on October 21, 2015 that Holly Springs, NC will be the next town to get symmetrical gigabit (1,000 Mbps download and upload speed) “crazy fast fiber Internet.” Holly Springs will join Charlottesville, VA and Westminster, MD where Ting Internet is already available. Demand assessment will begin in Holly Springs in the last quarter of 2015. That demand will guide construction, which could then begin as soon as the first half of 2016.[13]

Michael Goldstein wrote on the Ting Blog on October 20, 2015 that Ting is grateful for the reception and the partnership they have established with the folks in city hall in Holly Springs, NC (population 24,661) and know that it will be a productive relationship and that citizens of Holly Springs will relish faster Internet and better service. "An important first step in the buildout and delivery of Ting Internet service will be gauging where there is greatest interest." writes Goldstein. "So please take a moment to leave us your contact information here (and even pre-order when that option is available) so that we can potentially count you as raring to go and keep you posted on our progress."[14]

“We’re very happy that Ting chose Holly Springs as the next place to bring crazy fast fiber Internet. In the past 25 years, Holly Springs has grown over 2,600%. Young families with school-aged children are driving that growth. World-class Internet access will help us continue our forward progress and inspire the next generation of great ideas,” said Mayor Dick Sears. “The need for faster, more reliable Internet access across the US has been recognized by the highest levels of government,” said Tucows CEO Elliot Noss. “The problem of slow, expensive and unreliable Internet access is national but agreements like the one reached with Holly Springs further demonstrate that the solution is local.” “While Google Fiber and other providers race to get started in big cities, we’re finding that there’s also a lot of interest from, and opportunity in, smaller cities and towns that might otherwise get passed over,” Noss said.[15]

October 20, 2015: Tucows Offers New Three Day Promotion to Bring ATT Customers to Ting

Marketwatch reported on October 20, 2015 that for three days running through October 22, AT&T customers are invited to check their active phones, one per customer, at ting.com/byod_coffee to see if they are Ting compatible and for each phone checked, whether they prove to be compatible or not, Ting will provide a unique promo code worth $5 at any Starbucks location. "If you can bring your phone to Ting, the calculation gets very simple. You are going to have a better customer experience and you are likely going to spend less," explained Michael Goldstein, Ting VP of Sales and Marketing. "But sometime people need a more immediate incentive to take that first step. Until a better incentive comes along, we're going to stick with coffee."[16]

October 18, 2015: Baltimore Sun Highlights Ting Fiber in Westchester

Scott Dance published a front page story in the Baltimore Sun on October 18, 2015 on fiber initiatives around the Baltimore area highlighting how Westminster is joining a growing number of communities investing in networks capable of carrying a gigabit of data each second, an accomplishment that Baltimore appears eager to follow. "It was clear nobody else was going to do it for us," said Dr. Robert Wack, City Council president for Westminster, which lit up a fiber-optic network it has begun building for its residents and businesses this summer. According to Dance, Westminster's decision to invest in a fiber network was not an easy sell. "It took us a while to get traction because, frankly, we couldn't get people to take it seriously," said Wack, the City Council president. But now, the most frequent question and concern about the gigabit service — which costs residents $89 a month plus a one-time $399 installation fee — is, "Can't you get to my house sooner?" said Valerie Bortz, Westminster manager for Ting, a Canadian company that is leasing the fiber from the city. The city has spent $1.6 million to build the first 7 percent of the network, connecting about 400 homes and businesses. Officials secured a $21 million bond to cover the rest, Wack said, with strong support from city leaders and residents. "At the end of the day, it's just like any other infrastructure project we undertake," Wack said. "I think that's how every municipality and local government should approach this. This is just another type of infrastructure in the 21st century."[17]

October 8, 2015: Short Interest Increases in Tucows

Nasdaq's biweekly report on short interest shows that Tucows short interest increased to 718,536 shares on September 15, 2015 from 573,265 one month before, an increase of 25%.[18]

See also: *Nasdaq: Short Interest in Tucows

Settlement Date Short Interest Avg Daily Share Volume Days To Cover
09/15/15 718,536 80,635 8.910969
08/31/15 648,746 150,047 4.323619
08/14/15 573,265 215,356 2.661941
07/31/15 510,134 142,961 3.568344
07/15/15 459,756 132,057 3.481497
06/30/15 283,367 144,477 1.961329
06/15/15 218,845 157,296 1.391294

September 25, 2015: Two Tucows Insiders Sell Shares

Insider Trading Report reported on September 25, 2015 that David John Woroch , EVP Wholesale sold 2,000 shares on September 25, 2015 at $24.21 per share for a total value of $48,414.60.[19] Insider Trading Report reported on September 15, 2015 that Tucows CFO Michael Cooperman sold 30,279 shares on Sep 11, 2015 at $25.06 per share for a total value of $758,782.19.[20]

September 8, 2015: Tucows Holds Annual Shareholders Meeting

Tucows filed Form 8-K on September 9, 2015 confirming that they had held their annual shareholders meeting on September 8, 2015. Three matters were addressed at the annual meeting:

  • The Company's shareholders re-elected Allen Karp, Elliot Noss, Erez Gissin, Jeffery Schwartz, Joichi Ito, Rawleigh Ralls, and Robin Chase to serve on the Company's Board of Directors for a term of one year expiring at the 2016 Annual Meeting of Shareholders.
  • Shareholders gave their approval to amend and restate the 2006 Equity Compensation Plan
  • Shareholders voted upon and ratified the appointment of KPMG LLP as the independent auditors of the Company and its subsidiaries for the fiscal year ending December 31, 2015[21]

September 8, 2015: Ting Fiber Announces Roll-Out Plans for Charlottesville

Ting Fiber plans to cover as much ground as possible during 2015 in North Downtown, Belmont, Martha Jefferson and Locust Grove.

The Ting Blog reported on September 8, 2015 that from now until the end of 2015, Ting Fiber plans to cover as much ground as possible in North Downtown, Belmont, Martha Jefferson and Locust Grove. In the coming months, Ting Fiber will be unveiling a tool to help gauge interest in gigabit Internet in other neighborhoods.[22]

August 31, 2015: Michael Goldstein Writes About the Difference Between the Ting Mobile and the Ting Fiber Markets

Michael Goldstein, Executive Vice-President for Marketing at Tucows, wrote on the Ting Blog on August 31, 2015 that some folks have understandably questioned what seems to be a contradiction between Ting's mobile offering and Ting's Internet offering: On Ting Mobile, customers save hundreds of dollars a year because they pay just for what they use while with Ting Fiber customers pay a fixed price for unlimited high speed data.

"We never thought of Ting as the “pay for what you use” company. We think of ourselves as providing services that make sense. We offer what we believe is sorely lacking in a market. We look for situations where people are in some way underserved by the incumbents. Maybe they are underserved because there is a lack of competition. Maybe it’s because there isn’t enough money to be made for larger companies. Maybe it’s because everybody has been solving a problem one way for so long that they had stopped considering others."

"In mobile, the problem we saw was that too many people were just paying too much for service. Carriers had fixed costs and wanted to pile as much revenue as they could on existing networks so they pushed everyone to unnecessarily large amounts of usage at unnecessary prices."

"On fixed Internet for homes and small businesses, the problem we see is that existing networks are inadequate for the amazing things people can do online now and the speed at which people want to do them. These existing networks were never meant to stream video, upload and download huge files to the cloud or host meetings. But the incumbents are generating so much revenue on those existing networks and face so little competition, there really is no incentive for them to invest in anything new."

Goldstein writes that his own life fits with exactly the sort of usage our two services provide. "I use my phone quite tactically, enjoying some streaming music here and there, navigating on Google maps when I need to and checking my email and our real-time website analytics way too often. But I am generally between Internet at home and Internet at the office. I am very willing to do smart little things to keep my cellphone usage down," says Goldstein. "At home, on the other hand, I want to swim in a sea of Sonos, Rdio, Netflix, Skype, iTunes, Dropbox, ESPN3 and other glorious services." Goldstein concludes that the one thing Ting Mobile and Ting Fiber have in common is that they are both solving a problem and are not aiming to please everyone. "Of course, I am also confident that any service we offer at any price brings with it our unique ethic and our unique commitment to fairness, honesty and customer satisfaction. We are desperate to make people happy, which will always be our greatest point of difference."[23]

August 25, 2015: Three Tucows Insiders Sell Shares

Marketbeat reported on August 25, 2015 that Tucows Director Erez Gissin sold 18,750 shares on August 25, 2015 Ar $22.29 for a total value of $417,937.[24] Insider Trading Report reported on August 21, 2015 that Elliot Noss, Chief Executive Officer of Tucows sold 50,000 shares on August 20, 2015 for a total value of $1,247,765.00.[25] Insider Trading Report reported on August 20, 2015 that Tucows Director Joichi Ito sold 6,250 shares on Aug 19, 2015 at $25.52 per share for a total value of $159,533.75.[26]

August 18, 2015: Sprint to Phase Out Two-Year Contracts

CNN reported on August 18, 2015 that Sprint has announced that it will phase out two-year contracts for its customers by the end of the year joining Verizon who abandoned its contract program this week, and T-Mobile who stopped more than two years ago. Sprint customers will either have to pay full price for their smartphones upfront, pay off the phone over the course of two years, or lease their phone from Sprint. The new no-contract plans lets customers comparison-shop more easily as they're no longer locked into a long-term deal.[27]

Abraham Seidmann says at Motley Fool that forcing people to pay for phones upfront could have unintended consequences for the carriers. "In the long run, we do wonder though, since users will have to pay for their phone outright, will providers (Sprint, AT&T, or Verizon) be forced to stop locking their phones so users can move them to other carriers," says Seidmann. "It will be the next logical step after providing for phone numbers portability about 15 years ago." According to Seidmann, no contracts and unlocked phones would be good for consumers, but it creates extreme volatility for the carriers because customers would be able to switch on a whim between providers that their phone is compatible with and there would be nothing stopping them from jumping from deal to deal. Seidmann says the rise of MVNOs is forcing lower monthly prices on an industry that has been able to avoid that for so long. As that is happening consumers are becoming used to the idea that those lower recurring fees come with a catch -- you must pay for your phone upfront.[28]

August 17, 2015: Ting Internet Is Now Available in Westminster, MD

Jesse Simms writes on the Ting Blog that Ting's gigabit fiber is now officially available in Westminster MD. According to Simms, Ting has been busy since the fiber lighting ceremony on June 26, 2015 installing all the necessary equipment to light up the whole network and bring fast fiber Internet all across town. "If you live in the City of Westminster and are looking to get connected, simply run your address at the top of the Ting Westminster page," writes Simms. "If we haven’t yet made it to your home or business, don’t worry, we’re coming. Just hit the “Sign up for updates” button and we’ll keep you in the loop."[29]

August 11, 2015: Short Interest in Tucows up 11% in Last Two Weeks

Nasdaq reported on August 11, 2015 that short interest in Tucows increased from 459,756 shares on July 15, 2015 to 510,134 shares on July 31, 2015, and increase of 11%.[30]

See also: *Nasdaq: Short Interest in Tucows

Settlement Date Short Interest Avg Daily Share Volume Days To Cover
7/31/2015 510,134 142,961 3.568344
7/15/2015 459,756 132,057 3.481497
6/30/2015 283,367 144,477 1.961329
6/15/2015 218,845 157,296 1.391294
5/29/2015 123,846 180,110 1.000000
5/15/2015 17,266 64,995 1.000000
4/30/2015 17,900 24,705 1.000000

August 6, 2015: Tucows Announces Strong Growth in Second Quarter

See also:

Net Revenue Increased 21% YOY

Tucows announced on August 6, 2015 that net revenue for the second quarter of 2015 increased 21% to $42.9 million from $35.6 million for the second quarter of 2014. Adjusted EBITDA for the second quarter of 2015 increased 64% to $5.4 million from $3.3 million for the second quarter of 2014.[31]

Net Profit Increased 77% YOY

Tucows announced on August 6, 2015 that net income for the second quarter of 2015 increased to $2.3 million, or $0.21 per share, compared with $1.3 million, or $0.12 per share, for the second quarter of 2014.[32]

Adjusted EBITDA Increased 64% YOY

Elliot Noss reported in the second quarter earnings report conference call that "adjusted EBITDA of Q2 increasing 64% year-over-year to 5.4 million bringing our total for the year-to-date to 12.3 million."[33]

Tucows Increases Guidance for Adjusted EBITDA from $20 million to $25 million

Elliot Noss reported in the second quarter earnings report conference call that Tucows "had a strong first half and now feel it appropriate to increase guidance for 2015 from $20 million of EBITDA to $25 million of EBITDA. This is a strong performance and one that bodes well for the future. In many ways their current performance reminds of 2012 - 2013 when we were investing in Ting Mobile. We were able to continue to grow the business well investing in and launching a completely new revenue stream in a way that made the investment seem invisible and painless to investors."[34]

Tucows Generated $2.2 million in Cash Flow

Tucows announced on August 6, 2015 that cash and cash equivalents at the end of the second quarter of 2015 were $15.3 million, up from $8.3 million at the end of the fourth quarter of 2014 and $14.2 million at the end of the second quarter of 2014. During the second quarter of 2015, Tucows generated cash flow from operating activities of $2.2 million.[35]

Tucows Invested $1.1 million, Primarily in Ting Fiber

Tucows announced on August 6, 2015 that the company invested $1.1 million to acquire additional property and equipment, primarily investing $0.8 million in expanding Ting Internet’s fiber footprint.[36]

Tucows Repurchased 25,000 Shares in Q2

Tucows announced on August 6, 2015 that the Company used $0.5 million in cash to repurchase 25,413 shares of its common stock under its ongoing share buyback program.[37]

August 6, 2015: Ting Mobile Continues to Grow

Ting Mobile Added 10,000 Accounts and 16,000 Devices in the 2nd Quarter

Elliot Noss reported in the second quarter earnings report conference call that "Ting Mobile saw continued growth in Q2 and a bit of rebound, averaging over 10,000 accounts and 15,000 devices bring our total at the end of the quarter to more than 113,000 accounts and a 178,000 devices" compared to 9,000 additional accounts in Q1.[38]

Ting's Churn Rate is 2.5%, Average Monthly Customer Spend is $35, Gross Margins Are at 50%, and Acquisition Costs are Under $100 Per Customer

Elliot Noss reported in the second quarter earnings report conference call that "the key metrics of the Ting Mobile business remained consistent." According to Noss, churn is about 2.5% of Ting's base each month, customers spend about $35 a month, gross margins are around 50% and cost per acquisition continue at under a $100.[39]

Ting Mobile is Still Recovering from the Sprint FED Issues

Elliot Noss reported in the second quarter earnings report conference call that "we’re still not at levels that we are satisfied with" after the issues with the Sprint FED in the first quarter. "Coming into the second half of this year, we have a great opportunity with Ting Mobile to get additional returns on incremental operational improvement. We have clear consistent requirements and processes now for Sprint devices to come to the service. It is more complicated than it was, [but] at least it is settled. We have a choice of two nationwide networks and we can now accept a far greater of a percentage of owned devices."

"We have a much better handle on the drivers of customer support interactions with the redesign of the business processes and we have a staffing plan to keep us out in front of it. Perhaps most importantly we now have a greater abundance of prospects to convert. In our first three years just about any improvement we made to our offering or our conversion produced relatively small returns while very few people knew who we were."

In answer to a question from Hubert Mak of Cormark Securities Noss added that "hold times are too long [so] the customer service experience is not what we want it to be and we think that impacts conversion and referrals. So we think that’s still a drag and that’s primarily because the changes that we have had to make to both the changes in the Sprint supply chain and new policies with the introduction of GSM have changed our customer service ratios. We had to internalize a lot more of the supply chain and it's just changed the customer service ratios and the amount of customer service we have to put into conversion."[40]

Ting Mobile Has Turned Marketing Back on

Elliot Noss reported in the second quarter earnings report conference call that in Q1 Ting Mobile's customer support team was struggling to keep up with call volume and shut down all marketing and promotional activities until Tucows could get back to the level of service that has defined and propelled the Ting brand. However Noss added that Ting Mobile has now caught up sufficiently to the increased demand brought up by changes in Sprint and that by the end of May "we started marketing the service again and by the beginning of June we’re at full throttle."

"With the Consumer Reports rating in December, the interest in our fiber initiative over the past couple of months, and a growing customer base spreading the word to their friends every day, we appear to have muscled our way into millions of daily discussions of cell phone providers. We see it in our website traffic and our support interactions both of which reached all-time highs in Q2. What that means to us is that we can get significant returns on improvements to our user experience, before, during and after activation. We have a long backlog of screws to be tightened on our website, in our programs that generate leads, and in our sales and support processes and we see those as ways to turn more of this demand into customers."[41]

Ting Mobile Expects to Add 10,000 New Customers in the 3rd Quarter and Quarters Ahead

Elliot Noss reported in the second quarter earnings report conference call that "June was our second largest month of gross adds ever following this past December, it brought us back over the 10,000 net add benchmark that we had slipped below briefly with the events of Q1 and hope to stay above in quarters' ahead."

In answer to a question from Hubert Mak of Cormark Securities Noss added that "right now Q3 probably looks similar to in the range of Q2. Q4 is always a funny one because it's got the Christmas season in it. We’re still dealing with changes in the way we have had to do business that have caused the customer service performance to not be what it was. So yes there was a chunk of Q2 where we weren't marketing and yes we have started to turn it back on but if you gave me a choice between no marketing and customer service where we want it to be or full marketing and customer service performing at a mediocre level I will take the former over the latter. Ting is very, very driven by the customer experience and so we’re pretty heads down around that and so until we see that come clean, we’re not trying to push too hard."[42]

GSM Is Now a Solid Part of Business But Ting Mobile Does Not Plan to Break Out Sprint versus GSM Service

Elliot Noss reported in the second quarter earnings report conference call that Tucows is signing up a lot of people on the GSM side, but "we’re making a conscious decision not to provide break outs between the two services but I'm comfortable saying that GSM is a lot of what people thinking about."

"GSM is now just a solid part of the business. If you go through our purchase path you will see that we really let the choice of the phone that you have in your hand drive which network you’re using for that phone. Over time we may start to see geography figure into some of that as our customers help get smarter in particular markets." Noss added that Tucows is not yet seeing a willingness from either of our partners to let Ting Mobile do some of the things that Google is doing but "we will keep pushing."[43]

August 6, 2015: Ting Fiber is Growing

Ting Fiber Launched in Charlottesville and Costs Are in Line With Assumptions

Elliot Noss reported in the second quarter earnings report conference call that Ting Fiber's costs so far seem to be in-line with assumptions and "we’re increasingly confident that we can scale this service."

"Ting Internet launched in Q2 in Charlottesville, Virginia. We lit up our first beta gigabit customers in May allowing customers to start signing themselves in early June and they are operating at or near capacity ever since. Meanwhile we’re rapidly building up fiber network to cover the entire city and have already reached over 3000 serviceable addresses. In our other launch market Westminster, Maryland where the city is building the network and playing the dual roles of network operator and service provider, we co-hosted a fiber lighting ceremony in late June and expect to start signing up customers in mid-August. We continue to receive praise for our unique public private partnerships there, the National Association of Telecommunications Officers and Advisors or NATOA recently recognized Westminster and Ting as innovative partnership of the year as part of their 2015 community broadband awards. At this stage our focus is on optimizing our processes from network build-out in Charlottesville to scheduling and reforming a high volume of customer installs to tracking and managing customers actual internet usage. We’re also identifying opportunities to improve the user experience and minimize support. All of that is going well."[44]

The Right Way to Look at Ting Fiber is That They Are Nice Small Profitable Businesses

Elliot Noss reported in the second quarter earnings report conference call that the right way to look at Ting Fiber in Charlotesville and Westminster is they are nice profitable small businesses, each in and of themselves. "So if we can pull 1 million, 2 million, 3 million, 4 million in EBITDA a year out of the market we think that’s fantastic and it's fantastic relative to the investments, relative to the effort." The financial models for these businesses look good. The small population markets in Charlottesville and Westminster are in the sweet spot of our population size and each of those markets will be profitable on their own.[45]

Tucows Is Experimenting with Ting Fiber and is Comfortable Looking at Smaller Markets

Elliot Noss reported in the second quarter earnings report conference call that Ting Fiber is "very comfortable looking at smaller markets than Google is." According to Noss, Tucows thinks there are potentially some very interesting opportunities in smaller towns and cities and is testing some core assumptions and experimenting. One of the things Ting Giber wants to do is experiment with how small we can feasibly operate. "If we can take on small bites of profitability that’s just a fantastic opportunity both from a competitive standpoint and from a sort of number of opportunity standpoint."

"One of the things that fundamentally separates us from Google is that we are willing to work with cities in a number of different ways, across a different models and cities like that. They like to be able to be able to consider a public private partnership but I can tell you that the cities that have gotten excited for Google and we have subsequently spoken to they have been well primed and the discussions tend to be a little bit smoother."[46]

Tucows Wants to Grow Ting Fiber in a Measured Way While Limiting Downside Risk

Elliot Noss reported in the second quarter earnings report conference call that by the end of 2016 Ting Fiber could be in up to 7 to 8 fiber markets. According to Noss, Ting Fiber's limiting factor is not finding cities that want to work with us and have us come and build fiber or build fiber themselves and partner with us but our limiting factor is that we want to continue to crawl, walk, and run as we learn how to run this business profitably. "This business is a complicated business so that feels like the right size of ramp and in addition the right amount of capital to deploy as we’re starting to put some bones on what 2016 might look like. We don’t want to go from a current level of capital deployment and just all of a sudden start spending like crazy. We want to do this in a measured way and one of the things we’re very attentive to is downside risk." According to Noss that's something that’s very important to Tucows "because as you know we pride ourselves around capital allocation and return on equity."[47]

August 6, 2015: Domain Business is Steady and In-Line With Expectations

Elliot Noss reported in the second quarter earnings report conference call that the domain services side of the business performance was in-line with expectations solidly in Q2 especially outside of the declining expiring stream business with particularly promising results in email[48]

Hover Shows Strong Growth

Elliot Noss reported in the second quarter earnings report conference call that Hover continues to show "strong growth with increases in both revenue and gross margin of over 18% year-over-year and growth from the customer base of 14%. We launched an exciting new initiative in Q2 called Hover Connect that will enhance the customer experience and has the potential to ultimately drive more customer acquisitions through partnerships. Hover Connect allows our users to easily connect their Hover domains to their favorite web services without DNS modifications, the users simply choose it's which site building service he is using or she is using from a menu of popular choices of Hover and Hover automatically points the domain to the appropriate website. It highlights one of Hover's greatest competitive advantages that we do not attempt to lock users into our own site building or hosting service. It also simplifies the trickiest aspect of the domain name experience, the link to the webhost. In addition to improving the Hover experience we’re hopeful this feature will be appealing to the site building services as they consistently identify connecting with domain registration as perhaps their greatest pain point."[49]

OpenSRS Shows Flat Growth

Elliot Noss reported in the second quarter earnings report conference call that "registration on OpenSRS were up 2% driven by an outstanding renewal rate of 79%, once again our highest renewal rate outdoor [ph]. Perhaps even more impressive that included a 70% of new gTLDs with a large percentage in their first year of renewal. We added 52 more gTLDs in Q2 and by the end of the quarter 2100 resellers had registered at least one new gTLD up from 1900 at the end of Q1 and in addition to the promise of incremental revenue from these resellers this adoption across more services ultimately fosters key relationships and secures the revenue on our core gTLDs. OpenSRS continue to find growth in all corners of the world in Q2, new registrations from outside North America and Western Europe were up 16% year-over-year and represented a new high of 25% of all new registrations in the quarter."[50]

Tucows Has an Opportunity for Growth in email Services

Elliot Noss reported in the second quarter earnings report conference call that there is "some growth coming back to our email business primarily the result of Google no longer supplying Gmail to ISPs. Long time investors will remember that years ago we lost big pieces of business to Google as they got into this market. They have now effectively exited."[51]

July 31, 2015: Ting Fiber Looking at Five or Six New Markets for 2016

Triangle Business Journals reported on July 31, 2015 that Ting Fiber plans to expand its high-speed fiber Internet as Elliot Noss hinted in an interview that North Carolina's Research Triangle could be under consideration for Ting expansion. “I think the safest thing to say is that we are interested, we are in the process of working through our 2016 pipeline,” says Noss. “We’re looking at where we’re going to bring fiber in 2016. We are probably looking at going forward with five or six markets, and North Carolina is one of the leaders in the country in fiber to the home. I think that’s been true since Wilson in the early days, and now Google coming to a couple of markets and AT&T is responding, so there’s certainly a lot happening." Ting is looking to move on its fiber expansion quickly, and a decision on the pipeline for 2016 should happen “in the next few months,” says Noss.

“The first thing we look for when we’re engaging with a city or town is an understanding that this is something they deeply want to do,” says Noss. “We don’t take meetings with cities who want to hear about why they should have fiber or gigabit connectivity.” “North Carolina might be the first state in the union that has moved from where cities and towns are looking at fiber as a way to differentiate and to lead,” adds Noss. “(North Carolina) is seeing it almost defensively: We need it for our survival because we’re surrounded by it.”[52]

July 15, 2015: Short Interest in Tucows Doubles in Last Thirty Days

Nasdaq reported on July 15, 2015 that short interest in Tucows doubled from 218,845 shares on June 15, 2015 to 459,756 shares on July 15, 2015.[53]

See also: *Nasdaq: Short Interest in Tucows

Settlement Date Short Interest Average Daily Volume Days to Cover
07/15/15 459,756 132,057 3.48
06/30/15 283,367 144,477 1.96
06/15/15 218,845 157,296 1.39
05/29/15 123,846 180,110 1.00
05/15/15 17,266 64,995 1.00
04/30/15 17,900 24,705 1.00
04/15/15 22,660 23,076 1.00
03/31/15 22,813 28,070 1.00
03/13/15 21,644 31,106 1.00
02/27/15 5,555 24,936 1.00
02/13/15 8,584 41,265 1.00
01/30/15 8,777 34,167 1.00
01/15/15 14,421 34,980 1.00
12/31/14 8,903 47,205 1.00
12/15/14 7,602 23,796 1.00
11/28/14 5,877 45,592 1.00
11/14/14 9,055 24,857 1.00
10/31/14 17,927 20,120 1.00
10/15/14 32,537 28,828 1.13
09/30/14 41,433 29,234 1.42
09/15/14 31,630 20,791 1.52
08/29/14 35,647 16,929 2.11

July 23, 2015: Tucows is Hiring in Toronto

YongeStreet reported on July 23, 2015 that Tucows is adding developers to its team. "According to Tucows' job posting, the majority of the position involves the design and development of backend applications. Given that, knowledge of coding languages like PHP, Perl and Python is considered an asset. Check out the company's posting on the Ladies Learning Code job board for more information. The company is also hiring a senior user experience designer."[54]

June 27, 2015: Short Interest Increases on Tucows Stock

The Daily rover reported on June 27, 2015 that short interest in Tucows stock (TCX) on June 15, 2015 is at 218,845 shares, 2.4% of floated shares. This is an increase of 94,999 shares from the short interest on May 29, 2015. With a average daily trading of 157,296 shares, the days to cover are between 1 and 2.[55] According to Investopedia, short interest provides one measure of whether there is weaknesses in a stock price "that the market may not have discounted yet or a company that is simply overvalued."[56] "Short interest gives you a sense of how pessimistic, or "bearish," the market is toward a particular stock's price. Investors who think the price of a stock is going to fall can bet money on their belief, and short interest tells you the extent to which they have done so."[57]

See also: *Nasdaq: Short Interest in Tucows

June 15, 2015: Ting Fiber Network Now Available to Thousands of Charlottesville Homes

Tucows announced on June 15, 2015 that starting last week thousands of Charlottesville, Virginia residents signed up for Gigabit Internet service putting Charlottesville on par with other pioneering US cities with Gigabit Internet service like Chattanooga, Tennessee and Lafayette, Louisiana, along with world-leading cities like Seoul, Stockholm and Tokyo. According to Tucows gigabit service creates a huge competitive advantage for Charlottesville businesses allowing every member of a Charlottesville household to be streaming, gaming, video conferencing and browsing at the same timeand facilitating healthcare and fosters education. Ting's network now reaches about 3,000 homes and businesses, with a plan to cover the neighborhoods of North Downtown, Martha Jefferson, Locust Grove and Belmont in 2015 and the entire City in 2016. The service is available at ting.com/internet for $89/month. "I estimate that fewer than 50 of the nearly 20,000 towns and cities in the country currently have an affordable gig available to a reasonable amount of residents," says Christopher Mitchell, Community Broadband Networks Director, Institute for Local Self-Reliance.

“I am thrilled with how the network and the service are coming along and delighted for the people of Charlottesville, but I am not at all pleased with the timing of this press release,” grumbled Elliot Noss, CEO of Tucows and Ting. “AT&T and Comcast have managed to get press releases out years before their Gigabit services have come to market. Ours comes over a week after launch. We clearly need to pick it up a notch.”[58]

May 29, 2015: Tucows Breaks the MicroCap Barrier

According to Tucows 10-K as of March 6, 2015 the number of shares outstanding of Tucows common stock was 11,081,390. Using this number and the closing prices for TCX, Tucows Market Cap exceeded $300 Million for the first time on May 29, 2015.

Date Closing Price Shares Outstanding Market Cap
May 26, 2015 25.42 11,081,390 281,688,934
May 27, 2015 26.37 11,081,390 292,216,254
May 28, 2015 26.75 11,081,390 296,427,183
May 29, 2015 27.26 11,081,390 302,078,691
June 1, 2015 27.68 11,081,390 306,732,875

The term microcap stock (also micro-cap) refers to the stock of public companies in the United States which have a market capitalization of roughly $50 million to $300 million.[59]

May 7, 2015: Tucows Announces First Quarter Financial Results

On May 7, 2015 Tucows reported strong financial results for the first quarter of 2015. “Continuing our momentum of last year, the first quarter was an excellent start to 2015,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “With each quarter, the growth in Ting Mobile is having a greater impact on our financial results as we benefit from the operating leverage in our business. That impact is evident in the continued expansion of our gross margin percentage, which grew to 28%² from 24%² for the same quarter last year, while Adjusted EBITDA more than doubled to $6.9 million positioning us to come in comfortably above our previous guidance of $20 million for the full year. We look forward to continued growth in Ting Mobile alongside solid performance from our domains business as we ramp towards the launch of Ting Internet, our fiber-to-the-home initiative, later this year.”[60]

May 7, 2015: Tucows Announces Growth in Ting Mobile

Ting Mobile is Becoming the Engine for Growth at Tucows

Elliot Noss reported in the first quarter earnings report conference call that it is clear that "Ting Mobile is providing the financial leverage we had hoped and expected. The additional cash generation combined with the consistent contribution of the Domains business, should make for continued strong results."

"With each quarter, the growth in the Ting Mobile business is having a greater impact on our financial results as we benefit from the operating leverage in the business as a whole."[61]

Ting's Average Monthly Customer Spend is $35, Gross Margins Are at 50%, and Acquisition Costs are Under $100 Per Customer

Elliot Noss reported in the first quarter earnings report conference call that "the financial results are as healthy as ever, with customers spending about $35 a month, gross margins at around 50% and cost per customer acquisition under $100."[62]

Ting's Churn Rate is Just Above 2%

Elliot Noss reported in the first quarter earnings report conference call that Ting's churn rate "has dropped to just above 2%, our lowest level since tracking and reporting that metric."

"Most importantly, our customers have stuck by us through a difficult time. Our forums and social media are filled with appreciation for our effort and honesty in addressing the issues, and our customer satisfaction surveys reinforce that approval."[63]

Note: This is a big improvement over previous quarters where the churn rate has been reported as 2.5%.

Ting Added 9,000 Customers and 16,000 Devices in the First Quarter

Elliot Noss reported in the first quarter earnings report conference call that "Ting Mobile added over 9,000 accounts and almost 16,000 devices in Q1, bringing us to 103,000 active accounts and 163,000 active devices."[64]

Growth in Number of Customers Was Disappointing As the Result of a One Time Event

Elliot Noss reported in the first quarter earnings report conference call that "while that represents an impressive 10% growth in our base, it is disappointing, compared to the 10,000 to 12,000 accounts and 16,000 to 18,000 devices, we've added over each of the last several quarters. The good news that it's the result of a single lamentable but addressable event. On February 15th, Sprint changed the criteria for devices that are eligible to activate with Ting Mobile and other Sprint MVNO's. The intent was to deny devices that are tied to an obligation to Sprint. While we were told that the change was coming, neither we nor our customers were given visibility to which devices or how many devices would be rejected until the moment the change went live. When it did, an alarming 70% of devices that people were trying to activate on Ting Mobile were rejected, including many devices that were perfectly eligible by all stated criteria. We worked hard with sprint over the next several weeks to identify errors in the process and correct them, leading to the number of rejections falling to 30%. There are still a couple of outstanding issues and we continue to work with sprint to address them."[65]

Ting Moved Quickly to Address the Problem

Elliot Noss reported in the first quarter earnings report conference call that Tucows "quickly moved to procure both temporary and permanent to address the volume. We quietly launched our GSM service on March 1st to give customers another option to activate devices. Meanwhile, we shut down all marketing and promotional activities until we could give every prospect and customer that reaches out to us the outstanding level of services that has defined the Ting brand as this continues to be how we expect to win long term, both in mobile and fixed internet."

"We had to bring people in to step up around a bit of a crisis and there is both with what we went through with some of the financial eligibility stuff and the launch of GSM, there's been a bit of a change in the sort of in the level of support that's needed and nothing there that long term fusses us, in terms of the cost model. In fact, I'd say, at a sort of all-in costs perspective, I was quite pleased at how we've been able to scale both from an operational perspective and from a cost perspective and that's not to say this wasn't a real bump. There's no question that it was. We've put our customer satisfaction it's the most important thing in the building. We were unhappy with what went on, but I really was quite pleased with the way we were able to come through."[66]

Ting is Getting Back to Acceptable Service Levels and Conversion Rates

Elliot Noss reported in the first quarter earnings report conference call that Tucows is "just getting back to those acceptable service levels and back to acceptable conversion rates on our activation process and we are cautiously just starting to trumpet the Ting Mobile service again, and there was plenty to trumpet about our service and our business. Our GSM offering has made it more appealing, affordable and convenient than ever to give Ting Mobile a try. Customers are popping Ting GSM SIM cards into unlocked iPhone 6s, new mid-range Android devices, like the OnePlus One and every imaginable used market device that they already had or bought in the secondary market. Our net device ads per account in Q1 were the highest we've ever had, as our efforts to core families and businesses appear to be bearing fruit, and our GSM offering makes it easier than ever to bring multiple devices or add more."[67]

Ting Has Not Yet Turned Marketing Back On and the Marketing Team is Chomping at the Bit

Elliot Noss reported in the first quarter earnings report conference call that Ting has not yet turned back on marketing. "We hope that as we turn marketing back on, we'll start to see some pick up there. We don't know what the lag is going to be like and that's one of the things that'll be interesting to learn through this process and we're also and have been working on improving the process around GSM. So, we certainly felt that when we launched it, it was a little sub-optimal. We've been refining it and we think we'll see some pickups going forward, but all of that, so sort of the impact of re-launching the marketing, the impact of reworking around GSM, it'll all be things I'll be able to talk about in a lot more detail next quarter."

"I've got a marketing team that's kind of chomping at the bit right now and, as you can imagine, they've had both refinements on it with the good thing marketing and new ideas to play around with. So, I mean, I'm always encouraging them to conduct intelligent experiments and I don't mind them having those experiments cost money."

"There's some portion of the marketing effort that I would describe as steady state. It's the podcast sponsorships, the YouTube sponsorships, the referral fees, the coupon codes. The stuff we generally do from Facebook, AdWords et cetera and then you're going to have other things we're trying. Now, you can have two very different types of efforts. We could be experimenting with television and then contrast that with experimenting with some channel efforts, one is very cash intensive, the other costs almost nothing. So, they'll have very different profiles. So, it's almost going to depend more on the nature of the experimentation in that quarter."[68]

Ting Is Not Seeing More Aggressive Pricing from Competitors

In answer to a question from Hubert Mak of Cormark Securities, Elliot Noss reported in the first quarter earnings report conference call that Ting is not seeing more agressive pricing from competitors and that the launch of Google's MVNO has actually brought awareness to Ting. "In the quarter, we haven't seen anything new. So, it's as it was. I mean, my reset on that, which I think, I'd spoken some length about last quarter is it's a lot more competitive now than it was a year or two years ago, but we saw nothing change in the quarter, and I'd include in that, is the launch of Google which actually brought some awareness to us and we think it's a very interesting for a couple of reasons primarily around what they've done with multi-home SIMs and global roaming, we think those are just sort of positive impacts on the industry as a whole and we think that, it's a creative offering, but not one that we're much worried about competitively."[69]

Ting Is Not Worried About Google

In answer to a question from Alex Rackwitz of Samphire about what percentage of Ting customers have Nexus 5 and Nexus 6 phones, Elliot Noss reported in the first quarter earnings report conference call that "at its peak, the Nexus 5, was kind of 15%, 17% of our adds. The Nexus 6 is a lot more expensive of a phone. So, we're seeing Nexus 6 way below that. And that was in a run rate basis."

"By the way, if you're looking at sort of -- if you're worried about Google -- Nexus 5 does not currently work with Google. So, I know there's some talk that they could turn it on for the 5, knowing what I think they want to accomplish strategically, I don't know that they'll do that, but in any event, combined, boy those will comfortably be sub-10%. Michael Goldstein who runs acquisition is sitting here. He was guessing 8, I would probably guess, but it's really that more 5%, 6% and that's 5 and 6 combined with the majority of that being 5."[70]

May 7, 2015: Ting Internet Is Just Getting Started

Elliot Noss reported in the first quarter earnings report conference call that "Ting Internet now enters the stage where there is a lot to do and not a lot to report. In Westminster, Maryland the town is building out the fiber network, starting with four core neighbourhoods. In Charlottesville, Virginia where we acquired local internet service provider, Blue Ridge InternetWorks, we have integrated those people into the broader company and are now working together to leverage, upgrade and expand the fiber network there."

"At the same time, we've been developing the Ting Internet service that will provide access to these networks, including an eligibility check to determine whether an address is serviceable and processes for sign-up, installation, activation and monthly billing. Both the product and customer support will be deeply integrated with our mobile service, leveraging the same interfaces, processes and people."

"You're not going to see the Ting Internet business get to even a portfolio level of revenue this year. We're going to keep you apprised because we think obviously long term strategically very important business. So, we want to be thoughtful about the operating metrics we put out and allow you to follow along and home as we always like to do, but in terms of meaningful for this year, I wouldn't think twice about it."[71]

May 7, 2015: Domain Services Continues to Perform Well

Elliot Noss reported in the first quarter earnings report conference call that domain services continues to perform well. "On OpenSRS, domain transactions were flat year-over-year, yet our Domain gross margin grew by over 6%. In fact, our gross margin for Domain here in Q1 was the highest it's been in seven years. The results of a continual shift in mix towards higher margin products including country code TLDs and new generic TLDs. The contribution of this business after expenses is up even more year-over-year, as we continue to be more efficient and effective. We also continue to be more focussed on servicing the unique need for webhosting companies and ISPs all over the world than any of our competition. We added another 32 new gTLDs to our offering in Q1. More than 1,900 resellers have registered at least one new gTLD by the end of the quarter, up from 1,700 at the end of 2014."

"OpenSRS also produced a remarkable renewal rate of 77% in Q1, our highest renewal rate ever. That is well above the 73.5% that Verisign has predicted for all of.Com/.Net in Q1. We hope to get a chance to compare to that of GoDaddy when they report their Q1 earnings next week. This speaks to the inherent quality of our resellers end users. The biggest retail services tend to have a larger segment of customers that never use the domains they register and thus let them go upon expiration. Our domains are more consistently attached to hosting and other Internet services. They're powering businesses and organizations that are built to last."[72]

May 7, 2015: Tucows Repurchased 408,000 shares in Q1

Elliot Noss reported in the first quarter earnings report conference call that Tucows repurchased a total of just over 408,000 shares for a total spend of $7.7 million. "At the time of our last call in mid-February we announced the renewal of our open market stock buyback programs, under which we have the ability to repurchase up to 20 million of our common shares until February 15th of next year. As Mike had noted, we were quite active with the program during the first quarter, repurchasing 214,089 shares for a total of $4.1 million. This is in addition to the approximately 194,000 shares we repurchased under the modified Dutch tender that closed in early January for just under $3.6 million."[73]

May 7, 2015: Tucows Maintains Guidance of $20 Million in Adjusted EBITDA for 2015

Elliot Noss reported in the first quarter earnings report conference call that "we said last quarter that we expected adjusted EBITDA for this year to be in the $20 million. With the first quarter now in the books, it does look like we will be comfortably above that number."

"I wanted to take a moment to provide some clarity around our adjusted EBITDA metric. We have long relationships with a majority of our shareholders and it's been some time since we've provided a definition of adjusted EBITDA. As some of those shareholders have to varying degrees taken some of the profits off the table, we've seen new shareholders come into the stock, who've asked about how this metric is calculated. We have thus included a reconciliation of adjusted EBITDA to net income in the financial statements attached to our news release this quarter. We use this metric because we believe, adjusting for certain non-cash and other items enhances understanding of the performance of the business. The primary measure that we use for planning and budgeting purposes, incentive compensation and to monitor and evaluate our financial and operating results. It's the metric we use when we think about ourselves as owners of the business."[74]

April 23, 2015: Google MVNO Announcement Coincides with Highest Traffic in Months to Ting Site

Michael Goldstein wrote on the Ting Blog on April 23, 2015 that Google's announcement of a new mobile service coincided with the most traffic Ting has had in months to their site. Every web site in the world covered the Google news but "Ting customers commented under half those stories that “Ting did (this or that) first” or “I’m only spending $23 a month” or “The best part about Ting is their customer service," writes Goldstein. "So the opportunity for us just mathematically dwarfs the threat."

Goldstein says that Google's entry into the MVNO space with Sprint and T-Mobile as partners will also benefit Ting because Google will push "our mutual carrier partners to develop all sorts of wholesale capabilities that we will now swoop in and leverage." "In many ways, Google (with their buying clout) offers a great hint of benefits that more providers and end users should soon enjoy. International roaming rates should keep getting lower for all of us. VoIP functions and features (originating with the carriers) should keep getting better."

According to Goldstein, Google has offered a great vision for network agnosticism but you have to buy a $649 phone to use the service while Ting might be the only provider that is absolutely indifferent between networks, operating systems, devices and activities that you perform on your device. "Ting offers complete unimpeded choice. For Ting customers, that often means activating a three-year old smartphone that they bought off their brother-in-law for a song. It also means that when we eventually launch an integrated VoIP solution (with what we need at the carrier level), it will be one that Ting customers can use on absolutely any phone they want. That’s simply our vision and we’re sticking to it."[75]

April 8, 2015: Things Are Getting Back to Normal at Ting After Problems with Sprint's FED

Andrew Moore-Crispin wrote on the Ting Blog that after the problems with Sprint’s financial eligibility date (FED) check that was announced on February 15, 2015, the situation at Ting is coming under control and customer service at Ting is starting to get back to normal.
Sprint’s financial eligibility date (FED) check put a serious crimp in the bring your own device to Ting program and pushed a lot of people to call us to find out what was going on. We pushed the Ting on a GSM network beta release up a little in order to offer some different options. The end result was us breaking our promise of no hold customer service. Marketing went into stealth mode while we sorted things out. We stopped most of the things we do to try to get new customers and instead jumped into the ticket and email queue to lend a hand there. The ship has been righted and it’s just about anchors aweigh. In keeping with the nautical theme, it will soon be steady as she goes.[76]

Financial Eligibility Date Check

"When FED first hit, around 70% of devices that tried to come to Ting were being blocked by Sprint and only 30% made it past the gatekeeper. FED was casting too wide a net and catching devices it shouldn’t. Nexus and iPhone devices purchased directly from Google or Apple without any kind of carrier subsidy, for example," writes Moore-Crispin. "We’ve been working closely with Sprint to narrow FED’s focus and now, the numbers are reversed. 70% of devices that people attempt to activate on Ting pass FED check and 30% fail."[77]

Ting on a GSM Network

"Ting on a GSM network is ready for prime-time," writes Moore-Crispin. "The beta label will be pulled off Ting on a GSM network soon. Ting on a GSM network is now ready for primetime."[78]

Customer Service

"We broke our promise of no hold customer service. If you called us and didn’t get a real person on the line right away, we’re sorry. We take our customer service promises very seriously. We are on the road to recovery," writes Moore-Crispin. "Call volumes spiked to a level higher than we predicted in even our most dire of predictions as a result. Add to that the launch of Ting on a GSM network into open beta (in large part, an attempt to stop people getting rejected by FED from being left in the lurch) and the customer experience team was overrun."[79]

Ting Plans to Soon Begin to Actively Recruit New Users

"We slowed down to fix the issues that lead to this broken promise and to mitigate the risk of it happening again. We stopped any initiatives to get new people in the door until we’re sure we’re meeting this promise once more," writes Moore-Crispin. "Very soon, we’ll be in a position to start turning the tap back on full blast, inviting and welcoming new people to Ting. We’re looking forward to looking forward."[80]

March 11, 2015: Tucows Files 10-K for FY2014

See also: * Tucows 10-K Filing for FY2014 March 11, 2015

Tucows Paid $3.6 Million for Their 70% Interest in BRI

"On February 24, 2015, Ting Fiber, Inc., one of our wholly owned subsidiaries, acquired a controlling ownership interest in the newly formed Ting Virginia, LLC and its acquired subsidiaries, Blue Ridge Websoft, LLC (doing business as Blue Ridge InternetWorks), Fiber Roads, LLC and Navigator Network Services, LLC (the BRI Group) for a consideration of approximately $3.6 million. Ting Virginia, LLC is an independent Internet service provider in Charlottesville, Virginia, doing business primarily as Blue Ridge InternetWorks. The BRI Group provides high speed internet access, Internet hosting and network consulting services to over 3,000 customers in central Virginia. We will satisfy the purchase price through an advance under our 2012 DLR Loan facility."

"In January 2015, we borrowed $3.5 million under our Amended Credit Facility in order to fund the acquisition of a controlling ownership in Ting Virginia, LLC. This borrowing is subject to the terms and conditions described in note 8 to the Consolidated Financial Statements."[81]

Tucows Has Repurchased 108,605 Shares Since February 16, 2015 Buyback Program Was Announced

"On February 11, 2015, we announced that our Board of Directors had approved a stock buyback program to repurchase up to $20 million of our common stock in the open market and privately negotiated transactions. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 16, 2015 and will terminate on or before February 15, 2016. As of March 6, 2015, we have spent a total of $2.0 million to repurchase 108,605 shares under this stock buyback program, and therefore, the remaining repurchase authorization is $18.0 million. All shares purchased by us under the stock buyback program will be retired and returned to treasury."[82]

Tucows Has $26.2 Million Of Outstanding Foreign Exchange Forward Contracts Which Will Convert To CDN $29.3 Million

"As of December 31, 2014 the Company has $26.2 million of outstanding foreign exchange forward contracts which will convert to CDN $29.3 million. Of these contracts, $22.3 million met the requirements for hedge accounting. As of December 31, 2013 the Company had $26.5 million of outstanding foreign exchange forward contracts which will convert to CDN $27.8 million. Of these contracts, $20.6 million met the requirements for hedge accounting."

"We have performed a sensitivity analysis model for foreign exchange exposure over the year ended December 31, 2014. The analysis used a modeling technique that compares the U.S. dollar equivalent of all expenses incurred in Canadian dollars, at the actual exchange rate, to a hypothetical 10% adverse movement in the foreign currency exchange rates against the U.S. dollar, with all other variables held constant. Foreign currency exchange rates used were based on the market rates in effect during the year ended December 31, 2014. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a decrease in net income for the year ended December 31, 2014 of approximately $2.4 million. There can be no assurances that the above projected exchange rate decrease will materialize. Fluctuations of exchange rates are beyond our control. We will continue to monitor and assess the risk associated with these exposures and may take additional actions in the future to hedge or mitigate these risks."[83]

Beneficial Ownership of Tucows Stock by Officers and Board Members at Tucows

Tucows Officers and Directors Transaction Type Last Price Elliot Noss (CEO) Michael Cooperman (CFO) David Woroch (EVP, Sales and Support) Allen Karp (Co-Chair Board of Directors) Rawleigh Ralls (Co-Chair Board of Directors) Robin Chase (Director) Erez Gissin (Director) Joichi Ito (Director) Jeffrey Schwartz (Director) Carla Ann Goetz (EVP Human Resources) Kenneth Derrick Schafer (EVP Retail) Michael Goldstein (VP Marketing)
Shares Beneficially Owned per 10-K Filing on March 5, 2015 NA NA 764,833 325,831 173,250 69,375 513,750 4,375 50,000 13,750 60,625 21,275 25 12,913

Salary, Bonus, Stock Owned, and Stock Options of Tucows' Major Officers

Major Officers Salary Bonus Total Shares of Common Stock Owned Exercisable Stock Options Unexercisable Stock Options
Elliot Noss – President and CEO 343,589 182,754 526,343 702,146 62,687 21,563
Michael Cooperman - Chief Financial Officer 269,206 128,121 397,327 260,082 65,749 13,751
David Woroch – Vice President, Sales 224,143 134,834 358,977 110,001 63,249 13,751

March 3, 2015: Sprint's New Financial Eligibility Date (FED) is Frustrating for New Ting Users

Andrew Moore-Crispin reported on the Ting Blog that the Ting support team is overrun due to circumstances outside of their control and there are several things happening all at once that are driving call volumes higher than anyone could have anticipated. Sprint’s new “financial eligibility date” (FED) check is driving the majority of the calls. "We still don’t have all the answers yet and so our project and development teams can’t design around it. As it stands, it’s a real pain point. We know all too well how frustrating it is and we sincerely apologize," writes Moore-Crispin. "The sheer volume of calls coming in is the root cause of us not picking up the phone as quickly as we want to. Our customer service team doesn’t follow a script and instead works on the mandate of helping people find actual solutions to problems. This as compared with the customer support norm of trying to get people off the phone as quickly as possible. That’s an exacerbating factor. To be clear, though, that mandate doesn’t change, even in times of stress like this."

"For the past couple of weeks it has been all hands to the pump. The various other Ting teams are helping the support team whenever we can. We’re jumping in to answer help requests as they come in. We’re not jumping in on the call queue and getting on the phones because we’d probably end up more a hinderance than a help," concludes Moore-Crispin. "This temporary spike in calls is just that, temporary. We just need to dig out from under the pile of calls and emails before we’re back to delivering on our promise of no hold customer service. In the interim, though, we’re very sorry if you get put on hold. This isn’t something we’re about to make a habit of."[84]

February 24, 2015: Ting's GSM Offering Now in Open Beta

The Ting Blog announced on February 24, 2015 that Ting on a GSM network is now in open beta so anyone with a Ting GSM SIM card can activate it, slip it into an unlocked phone and get started with Ting. The biggest things that are missing on GSM at this point are international roaming and international long distance.[85]

February 18, 2015: New Sprint Handset Policy Tangles Up 'Bring Your Own Device' Program

Phil Goldstein reported on Fierce Wireless that some customers are experiencing difficulties in bringing their phones over to Ting and other Sprint MVNOs because of Sprint's new policy that Sprint will block your device from being reactivated until they check if a customer still owes the carrier money.[86] "The bad news is that some devices that previously would have had no trouble coming to Ting are now being blocked from making the move, basically because the owner hasn’t paid his or her final bill… most likely because they haven’t actually received that final bill," writes Andrew Moore-Crispin at Tucows. "We strongly urge our customers not to interrupt their devices’ active state for the time being. There is a chance that only by deactivating your device would you / we learn that it is considered by Sprint to be “financially ineligible,” i.e. is connected in some way to an account that owes Sprint some money. If a device is considered “financially ineligible” by Sprint, they will block any attempt to reactivate it until any outstanding balance is cleared."[87]

February 11, 2015: Tucows Announces Fourth Quarter Financial Results

“The fourth quarter was a solid finish to a strong year for Tucows,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “The continuing growth in contribution from Ting Mobile, combined with steady performance of our Domains business, enabled us to deliver net earnings per share of $0.16 for the fourth quarter, bringing EPS for the year to a record $0.57, an increase of 43% over 2013. Importantly, we continue to realize the benefit from the operating leverage in our business as consolidated gross margin for the quarter grew to 26% from 23%, excluding the Portfolio Group, for the same period last year.”[88]

Tucows Beat EBITDA for 2014 with $15 Million

"We finished the year above the top end of our guidance of 14.5 million to 15 million in adjusted EBITDA," said Elliot Noss during the 4th quarter conference call.[89]

Tucows Expects EBITDA to rise in the Range of $20 Million for 2015

"We expect EBITDA to be in the $20 million range which is a fine outcome balancing growth in the business in short-term with creating greater opportunities for growth in the long-term," said Elliot Noss during the 4th quarter conference call.[90]

Tucow Expects Ting to Be Tucows Largest Contributor in 2015

"As we look out to 2015 we expect to see continued strong performance from Ting Mobile which will become the largest contributor to and drive the bulk of growth in adjusted EBITDA," said Elliot Noss during the 4th quarter conference call.[91]

There is Increased Price Competion in the Mobile Sector

"There is this headwind of increased price competition and frankly there is just a headwind of consistent churn on a growing base and then we have the tailwinds around the great customer experience, the strong order and performance in referral program, the scrappy marketing we do, the new opportunities that we uncover every quarter," said Elliot Noss during the 4th quarter conference call.[92]

February 11, 2015: Tucows Announces Growth in Ting

Ting has 94,000 Customers at the End of Q4 Adding 11,000 Net Customers

"We added just over 11,000 accounts and 17,000 devices in Q4, 43% of those in December," said Tucows CEO Elliot Noss. "In 2014 we added 47,000 accounts and 73,000 devices, almost exactly doubling our totals to 94,000 active accounts and 147,000 active devices. Those net ads include churn that remains in the range 2% to 2.5% monthly."[93]

Customers Spend $35 a Month on Their Phone Bills, Gross Margins are 45 to 50%, Acquisition Costs Are Under $100 Per Customer, and Churn is Between 2 and 2.5%

Customers spend about $35 a month on their phone bills, gross margins are still in the range of 45% to 50%, we spend under $100 to acquire a customer, we’re now adding about 18,000 new customers on a gross basis each quarter and continue to churn between 2% and 2.5% of our base each month.[94]

With GSM over 80% of Phones Will be Able to Come to Ting Up From 10% Previously

Elliot Noss said during the fourth quarter confrence call on February 11, 2015 that offering service on a GSM network will have a significant impact on device portability and choice because up until now only about 10% of existing phones could come to Ting. "Until now, only about 10% of existing phones could come to Ting. When we launched the GSM service, over 80% of phones will be able to come to Ting for just $9 investment in Ting’s new SIM card. For those wanting to bring a device of their own this just makes the total savings calculation that much more favorable, for those who wanting to buy a new device it greatly expands the options."[95]

February 11, 2015: Tucows Announces $20 Million Stock Buyback Program

CNN Money reported on February 11, 2015 that Tucows announced that its Board of Directors has approved a stock buyback program to repurchase up to $20 million of its common stock in the open market. The stock buyback program will commence February 16, 2015 and will terminate on or before February 15, 2016. All shares purchased by Tucows under the stock buyback program will be retired and returned to treasury.[96]

February 11, 2015: Ting No Longer Has to Wait for iPhone 6/6 plus on Sprint Network

9to5mac reported on February 11, 2015 that sources say Sprint is dropping a requirement that made the mobile virtual network operators (MVNOs) using its network—such as Ting, FreedomPop, Straight Talk, Boost, and Virgin—wait a certain period of time, usually at least a year, before offering support for the latest devices. For Ting, the moves comes just as it’s about to land support for almost all devices anyway as it makes a deal with T-Mobile to offer support for GSM devices on its network. In the past, Ting required customers to bring a Sprint supported, CDMA device when signing up with its plans, but in the coming weeks the carrier will also support GSM devices through the new deal with T-Mobile.[97]

January 21, 2015: Google to Start an MVNO?

Paul Lily writes at Hot Hardware that according to subscription site The Information and the "three people with knowledge of the plans," Google will soon tap into networks belonging to Sprint and T-Mobile for its new service, buying wholesale access to mobile voice and data in order to make itself a virtual network operator. According to Lily, Google's interested in expanding its business outside of its core to "spur broader industry change." "Google's already doing this with its Google Fiber initiative, and since it's already a major player in mobile, offering cellular service isn't exactly a stretch," writes Lily adding that the project will be known as "Nova," and is reportedly being led by Google's Nick Fox, a longtime executive with the company.[98] According to Mikey Campbell Google first reached out to Sprint over a potential MVNO partnership 18 months ago and employees have already beta tested the service. Campbell adds that the carriers have reportedly taken a wary approach to the proposed deal. Sprint, for example, is said to be inserting contract terms that trigger new negotiations if Google's customer base hits a certain level.[99]

Ting Welcomes Google to the Fray

Andrew Moore-Crispin wrote on the Ting Blog of January 22, 2015 that Ting welcomes Google to the fray. "There are more than enough disenfranchised customers of the major carriers to go around. With three years in the game, we’re available to chat—to hangout, as it were—but it seems only fair that you buy whatever drinks will be had when we do." Moore-Crispin says that Google’s entry into the market will be the first a lot of people will hear about “MVNOs” as an alternative to the majors and just adds more legitimacy and helps to dispel the myth that MVNO customers get second-rate service. "We’ll out odds on our approach of putting customers in control of their devices and ultimately, their bills and of having real, human beings pick up the phone when it rings."[100]

January 21, 2015: Ting Announces Beginning of GSM Rollout

Tucows announced on January 21, 2015 that Ting is on track to launch Ting on a GSM network in late February and is slowly inviting people into the early beta phases. "Our first batch of X1 SIM cards has arrived in Starkville, Mississippi. We’ve been testing Ting service across a wide array of devices since early December."[101]

January 13, 2015: Ting to Be Network Operator of Internet Service to City-Owned Fiber Optic Network in Westminister, Maryland

The Whir reported that Tucows announced on January 13, 2015 that Ting has been selected to be the network operator of the city-owned fiber optic network in Westminister, Maryland that will initially reach around 9,000 homes and 500 businesses. “They believed that superfast Internet could bring and grow businesses, create jobs, increase property values and improve the quality of life for all residents,” said Ting VP of marketing Michael Goldstein. “They also realized that infrastructure that is crucial to the city, and likely will be for the next hundred years, should rightly be owned by the city.” “If a smaller, more customer-focused company player like Ting can pull off a win-win in a community like Charlottesville, it bodes really well for small towns and providers all over the country," said Ting senior content manager Andrew Moore-Crispin. "For the record, we’re confident we can pull off just that, otherwise we wouldn’t start down the path."[102]

January 8, 2015: Tucows Dutch Auction Ends with Purchase of 193,907 shares at $18.50

Tucows announced in a press release on January 8, 2015 that their modified “Dutch auction” tender offer had ended with the purchase 193,907 shares of its common stock at a purchase price of $18.50 per share, for a total cost of $3,587,280, excluding fees and expenses related to the tender offer. The 193,907 shares accepted for purchase in the tender offer represent approximately 1.7% of Tucows’ currently issued and outstanding common stock. Following the payment Tucows will have approximately 11,135,825 shares issued and outstanding.[103]

December 16, 2014: Ting Acquires Majority Stake In Blue Ridge InternetWorks, an Independent Internet Service Provider

Tucows Launches Ting Fiber. In December, 2014 Tucows launched Ting Fiber, a wholly owned subsidiary of Tucows, announcing that Tucows had entered into an agreement to acquire 70% ownership of an independent Internet service provider in Charlottesville, Virginia doing business primarily as Blue Ridge InternetWorks, a company that provides high speed Internet access, Internet hosting and network consulting services to over 3,000 customers in Central Virginia. “The expansion from mobile to fixed access is almost obvious for us,” said Tucows CEO Elliot Noss. “The only customers in the world more starved for great service and fair pricing than mobile phone customers are cable customers." This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Tucows issued a press release on December 15, 2014 reported that Ting Fiber, a wholly owned subsidiary of Tucows, has entered into a definitive agreement to acquire 70% ownership of an independent Internet service provider in Charlottesville, Virginia doing business primarily as Blue Ridge InternetWorks, a company that provides high speed Internet access, Internet hosting and network consulting services to over 3,000 customers in Central Virginia. “The expansion from mobile to fixed access is almost obvious for us,” says Tucows CEO Elliot Noss. “The only customers in the world more starved for great service and fair pricing than mobile phone customers are cable customers. They deserve that. But we have an opportunity with BRI in Charlottesville to offer even more than great service at a low price. The step up to gigabit, or ultra high-speed, access is profound.” The founders of the BRI Group will remain with the company. The price and terms of the acquisition were not announced. The acquisition is subject to regulatory approvals and other customary closing conditions and is expected to close during the first quarter of 2015. “For shareholders, this is a rare opportunity," concluded Noss. "In one deal, we get customers, revenue, prospects, infrastructure and a wealth of fiber expertise. We get an inside track on a game changing technology.”[104]

December 15, 2014: eWeek Says Sprint Won't Seek T-Mobile Merger Again

Todd R. Weiss reported on eWeek on December 15, 2014 that Sprint's parent company, Japan's Softbank, is no longer considering a rumored second attempt to acquire T-Mobile U.S., less than four months after the first merger attempt was dropped in August. According to Weiss, following the aborted merger attempt, Sprint shook up its executive ranks by replacing its CEO, Dan Hesse, with Marcelo Claure, the founder and CEO of Brightstar, a subsidiary of Softbank. Then in December, Sprint Chief Financial Officer Joe Euteneuer announced at an investor conference that things have been getting back on track at Sprint with huge progress made in getting the company's wireless network updated. Sprint had been experiencing network problems and customer losses due to service dissatisfaction in the recent past, but the company's network build-out is now "substantially complete" and will help drive a push for more subscribers, Euteneuer said. Sprint has also started some serious attempts to increase its customer base, thanks to a half-price wireless service offer it made recently to existing customers of competitors Verizon Wireless and AT&T if they move their service to Sprint.[105]

December 9, 2014: Fiercewireless Says Ting Will Be Adding T-Mobile Support in February 2015

Phil Goldstein reported at Fiercemobile that Ting Director Scott Allan told FierceWireless that he could not say which GSM carrier Ting is working with due to contractual obligation however, a coverage map Ting provided to FierceWireless mirrors the national coverage footprint of T-Mobile. Customers will be able to bring unlocked GSM phones to Ting and purchase a GSM SIM card to work with the phone. Ting's GSM SIM cards will cost $9 or less, according to Allan. Allan said Ting only began discussing adding a GSM partner within the last six months but that the move fits with what Ting offers to customers. "It aligns with our brand," he said. "We want consumers to have choices. And we want consumers to have freedom. And we want to provide innovative services. GSM really ticks all those boxes for us."[106]

December 9, 2014: Ting Will Support Latest Devices Including iPhone 6 in February 2015

The Ting Blog reported on December 9, 2014 that when Ting on GSM is live in February 2015, there will be no more waiting for the latest iPhone or Android device to be allowed on Ting. If it can be purchased unlocked, or if it can be carrier unlocked, it can come. What’s more, better than 80% of smartphones made in the last couple of years will be compatible with Ting. That will include the unlocked iPhone 6 or iPhone 6 Plus.[107]

December 9, 2014: Ting to Add Service on a GSM Network

Tucows announced on December 9, 2014 that Ting has an agreement with a major US network provider to offer service on a GSM network that is slated to go live in February 2015 and will operate in concert with the existing CDMA service. Once live, CDMA and GSM devices can coexist under a single Ting account, sharing a single pool of minutes, messages and megabytes of data. “This is an industry first,” said Elliot Noss, CEO of Tucows and Ting. “Our goal has always been a mobile market where customers and their devices can move between carriers as they see fit. We think the power balance in the mobile industry is all off. Customers, not service providers, should hold the cards.”[108]

December 8, 2014: Tucows Announces Dutch Auction Tender Offer

Tucows announced on December 8, 2014 that that it is commencing its "modified Dutch auction Tender Offer" (the "Tender Offer") to repurchase a number of its common stock not to exceed an aggregate purchase price of $8.0 million. Under the Tender Offer, shareholders will have the opportunity to tender some or all of their shares at a price within the range of $16.50 to $18.50 per share. Assuming that the offer is fully subscribed, if the Purchase Price is determined to be $16.50 per share, the minimum Purchase Price under the Tender Offer, the approximate number of shares that will be purchased under the offer is 484,848. Assuming that the Tender Offer is fully subscribed, if the Purchase Price is determined to be $18.50 per share, the maximum Purchase Price under the offer, the approximate number of shares that will be purchased under the offer is 432,432. Shareholders whose shares are purchased in the offer will be paid the determined purchase price per share net in cash, without interest, after the expiration of the offer period at 5:00 P.M., New York City Time, on Wednesday, January 7, 2015. [109]

December 7, 2014: Brian Nichols writes: Is 2015 Make or Break for Sprint?

Brian Nichols writes in an opinion piece in Seeking Alpha that Sprint has consistently lost customers for several years because of the poor quality the Sprint Network which recently was rated worst of the big four large telecoms by a survey in Consumer Reports. Sprint has recently announced an aggressive price cuttting plan, vowing to cut AT&T and Verizon customers' bills in half, in exchange for their business in the hope that aggressive pricing will lead to renewed interest in the carrier's services.

"The problem is that Sprint has lost 336,000 and 181,000 post-paid subscribers in its last two quarters, respectively," writes Nichols. "Not to mention, Sprint was recently voted the worst carrier in the U.S. by Consumer Reports. This means Sprint has to overcome quite a bit of negative consumer sentiment in its attempt to grow its subscriber base larger." According to Nichols if Sprint fails to attract new customers with its price cutting plan, it's tough to find a scenario where Sprint comes out on top. "As a result, I think a share price below $3 by the end of next year is very possible, and that a long-term price target of $0 is not out of the question. Needless to say, I would not invest in Sprint at any price, as I see no value based on the most likely of scenarios."[110]

November 20, 2014: Consumer Reports Rates Ting Highest Among Wireless Providers

Consumer Reports Rates Ting Highest Among Wireless Providers. In Consumer Reports' annual cell-phone service comparison in November 2014, Ting came out on top as the best mobile wireless provider with a company rating of 91 out of 100 because of their excellent service and customer support. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”. This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Justin Diaz reported at Android Headlines on November 20, 2014 that as part of Consumer Reports annual cell-phone service comparison Ting came out on top as the best mobile wireless provider with a company rating of 91 out of 100 because of their excellent service and customer support. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”[111]

“If you haven’t heard of the company before, there’s a reason for that: The service’s parent company, Tucows, is a domain name registrar and has made a business decision to not spend a lot on Ting-related advertising, instead choosing to offer lower-priced services. Considering they received the top spot on value, it appears they are performing well here."[112]

November 20, 2014: Consumer Reports Rates Sprint as Worst Mobile Network

Brian Nichols reported at Motely Fool on December 1, 2014 that according to Consumer Reports. Sprint is the nation's worst cell phone service provider. Consumer Reports surveyed approximately 63,352 people across 26 major metropolitan areas. It found that Sprint received "dismal" marks in value, voice, text messaging, and 4G reliability. "That said, there are a few areas where Sprint's results may have been altered by consumer perception, rather than reality. For example, Sprint's wireless service plans are mostly all cheaper than the equivalent plans from AT&T and Verizon. So Sprint's "dismal" value ranking is a bit odd," writes Nichols. "Not to mention, Ting, a small carrier that ranked number one nationally in the survey actually uses Sprint's network. Ting is a mobile virtual network operator, further supporting the notion that consumer perception may be driving the results in this study."[113][114]

Consumer Reports reached out to several of the carriers in their survey for comment. Elliot Noss, CEO of Ting, was ecstatic. "What we do is actually sort of obvious," he said. "We offer fair, honest pricing that doesn't penalize customers for using too much or too little. Our customers seem to appreciate it and we certainly appreciate this recognition from them."[115]

According to Consumer Reports, Ting has perhaps the simplest plan of all—you pay a monthly fee for each device on the plan, then you are billed at the end of the month for the voice minutes and data that you use. The less you use, the less you pay. Both carriers scored high in our Ratings.[116]

November 12, 2014: Tucows Announces Third Quarter Results

"In the third quarter we again saw the growing contribution from Ting in our financial results as our Domain Services businesses continued to deliver consistent, reliable performance," said Elliot Noss, President and Chief Executive Officer, Tucows Inc. "We achieved net earnings of $0.24 per share, bringing net earnings for the year-to-date to $0.40 per share, surpassing our total for the entire 2013 year. Consolidated gross margin increased to 26% from 21% a year earlier, excluding the Portfolio group, which benefited from atypical contributions in both quarters."[117]

Ting has 82,000 Customers at the End of Q3 and Added 11,000 New Customers This Quarter

"I want to note, that while we added 11,000 accounts in Q3 we are now counting our total of active accounts at just over 82,000, which is only 9,000 more than the 73,000 we reported last quarter," said Tucows CEO Eliot Noss. "This is the result of a one-time change in how we measure active accounts."[118]

"Ting continued its strong customer growth in the third quarter. We had a roughly 11,000 accounts and 17,000 devices, that represents a 15% increase in our customer base in the quarter, healthy growth for just about any business. But for Ting, it is in fact a bit of a slowdown," said Tucows CEO Eliot Noss. "Absolute net adds were slightly below both Q2 of this year and Q3 of last year. This is partly above the success of the iPhone 6 and 6 Plus launches during the quarter, devices we do not yet support on Ting. It is also partly about the climbing perception of the Sprint network relative to other major networks. And it also appears to be about aggressive new price promotions for major carriers to retain and acquire customers. Looking ahead, we believe each of these areas, device, network and price bring more opportunities for Ting growth than threats."[119]

Ting Has 130,000 Devices at the End of Q3 and Added 17,000 New Devices This Quarter

"As I last quarter I will quickly summarize the Ting business for easy modeling. We finished the quarter at 82,000 customers with 130,000 devices," said Tucows CEO Eliot Noss. "Customers are spending about $35 a month on their phone bills. Growth margins are 45% to 50%. We spent under $100 to acquire a customer. We are adding about 16,000 new customers on growth basis each quarter and continue to churn about 2.5% of our base each month."[120]

"Ting continued its strong customer growth in the third quarter. We had a roughly 11,000 accounts and 17,000 devices, that represents a 15% increase in our customer base in the quarter, healthy growth for just about any business. But for Ting, it is in fact a bit of a slowdown," said Tucows CEO Eliot Noss. "Absolute net adds were slightly below both Q2 of this year and Q3 of last year. This is partly above the success of the iPhone 6 and 6 Plus launches during the quarter, devices we do not yet support on Ting. It is also partly about the climbing perception of the Sprint network relative to other major networks. And it also appears to be about aggressive new price promotions for major carriers to retain and acquire customers. Looking ahead, we believe each of these areas, device, network and price bring more opportunities for Ting growth than threats."[121]

Customers Are Spending About $35 a Month on Their Phone Bills

"Customers are spending about $35 a month on their phone bills," said Tucows CEO Eliot Noss.[122]

Gross Margins are 45% to 50%

Gross margins are 45% to 50%," said Tucows CEO Eliot Noss.[123]

Customer Acquisition Costs are under $100

We spent under $100 to acquire a customer.

Ting Expects to Add 16,000 New Customer Per Quarter

We are adding about 16,000 new customers on growth basis each quarter and continue to churn between 2.0 and 2.5% of our base each month.

Average Ting Customer Saves $60 per Month

"A recent audit of the Ting base revealed that our average customer has saved $37.57 per device a month since switching, that’s an average of nearly $60 per account," said Tucows CEO Eliot Noss. "Meanwhile McKinsey just completed an annual survey, revealing that for the second year in a row price is the number one consideration for customers changing mobile providers and the percentage for whom that is true has grown considerably."[124]

Ting is No Longer Appealing to Just Early Adapters

"For the past couple of years, we’ve been fighting for our share of a small population of early adopters that are just satisfied and venturous enough to look beyond the major carriers for savings," said Tucows CEO Eliot Noss. "We believe the most important trend over the next year, will be more and more people joining that population recognizing that they can be paying less, looking beyond the four major carriers and discovering services like ours."[125]

Survey Shows Price Is The Number One Consideration For Customers Changing Mobile Providers

Meanwhile McKinsey just completed an annual survey, revealing that for the second year in a row price is the number one consideration for customers changing mobile providers and the percentage for whom that is true has grown considerably," said Tucows CEO Eliot Noss. "That means price ranks above network coverage or device choice. And we know that last year was the first time that that was true in this McKinsey study.[126]

Ting Made a One Time Accounting Change in How Tucows Measures Active Accounts

"This is the result of a one-time change in how we measure active accounts," said Tucows CEO Eliot Noss. "Specifically we have now removed all accounts going back throughout our history that we proactively suspended for nonpayment.[127]

Tucows Will Go into 2015 Unhedged Against the US Dollar Which Could Add $1 to 1.5 Million Yearly EBITDA

"With the movement in the Canadian dollar over the past six or so months, I wanted to take this opportunity to provide an update on our hedging program. As a reminder, we generate revenue in U.S. dollars, but the majority of our operating expenses are in Canadian dollars and therefore, we engage in foreign exchange hedging to provide certainty around future costs. The appreciation of the Canadian dollar has been a bit of a headwind really over the last decade or so, as our expenses were that much higher relative to our revenues. You see that reflective in our 2014 numbers and our guidance. However, with the recent weakening of the Canadian dollar, we now have a bit of a tailwind. We have typically hedged out 18 months or so, but are now only hedged through the end of 2014. Thus, if the foreign exchange rate stays more or less in its current range, EBITDA could benefit by as much as $1 million to $1.5 million in 2015 relative to this year.[128]

November 12, 2014: Tucows Announces Intention to Commence Dutch Auction Tender Offer

Tucows announced on November 12, 2014 that it expects to commence within 30 days of this announcement a "modified Dutch auction" tender offer to repurchase a number of shares of its common stock not to exceed an aggregate purchase price of $8.0 million. Tucows will select the lowest single per-share purchase price that will allow it to buy up to $8.0 million of its outstanding common stock at completion of the Tender Offer. The specified range is yet to be determined but is expected to be in the range of $16.00 to $18.00 per share. [129]

August 12, 2014: Tucows Announces Second Quarter Results

Ting Added 12,000 Accounts and 18,000 Devices

"Q2 was another solid quarter of customer growth for Ting," said Tucows President Elliot Noss. "On our last call, we projected that Q2 net adds would land somewhere between those of Q3 and Q4 of last year, or between 11,000 and 12,000 accounts. We ended up matching Q4, adding just over 12,000 accounts and 18,000 devices. That represents a 20% growth in our customer base in total, bringing our totals to over 73,000 accounts and 112,000 devices."[130]

Ting Now Has 73,000 Accounts and 112,000 Devices

This has brouhgt "our totals to over 73,000 accounts and 112,000 device" said Noss.[131]

Churn Rate Was Between 2 and 2.5 Percent

"Churn for Q2, and in fact pretty consistently for the past year, was in the 2% to 2.5% range per month," said Tucows President Elliot Noss. "We provide this number for two main reasons. First, this is the number one data request from investors as they build out their financial models. We always try and provide as much transparency as possible in order to allow investors to track the business."[132]

Customers are Spending $35 Per Month on Their Phone Bill

"Customers are spending about $35 a month on their phone bills," said Tucows President Elliot Noss. "Gross margins are 45% to 50%. We spend under $100 to acquire a customer. We’ve added 15,000, 16,000 new customers on a gross basis each of the last three quarters and have churned between 2% and 2.5% of our base."[133]

Cost to Acquire a Customer if $100

We spend under $100 to acquire a customer," said Tucows President Elliot Noss.[134]

Gross Margins Are 45 to 50 Per Cent

Gross margins are 45% to 50%," said Tucows President Elliot Noss.[135]

Ting is the Primary Driver on Gross Margins

"Yes, but I think that the primary driver on gross margins will continue to be Ting’s percentage of the business," said Tucows President Elliot Noss. "So Ting is growing so much faster than the domain side of the business and has appreciably better margins. So that will be the primary impact. You’ll see margin continue to pick up, but slowly and on a decreasing percentage of the total business."[136]

May 14, 2014: Tucows Announces First Quarter Results

Ting Had 61,000 Accounts and 94,000 Devices at the End of the Quarter

"Q1 was another record quarter for customer loyalty," said Tucows President Elliot Noss. "We added nearly 13,000 in accounts net and more than 20,000 devices, bringing our totals to more than 61,000 accounts and 94,000 devices at the end of March."[137]

Ting Added 13,000 Accounts and 20,000 Devices

"Q1 was another record quarter for customer loyalty," said Tucows President Elliot Noss. "We added nearly 13,000 in accounts net and more than 20,000 devices, bringing our totals to more than 61,000 accounts and 94,000 devices at the end of March."[138]

Ting's Gross Margin is Between 45 and 50%

Importantly, even after lowering our data pricing in February, our gross margin percentage remained in our targeted 45% to 50% range," said Tucows CEO Elliot Noss.[139]

Churn Rate Was Not Given

"One, I'll be a lot more comfortable putting out a churn number when the Sprint network hopefully settled down in terms of having an impact over the next couple of quarters. I listened to their calls with great interest and I am looking forward to the call where they say, our network's no longer having an impact on churn because when impacts them, it impacts us," said Tucows CEO Elliot Noss.[140]

February 12, 2014: Tucows Announces Fourth Quarter Results

Ting Had 48,000 accounts and 74,000 devices at the End of the Quarter

Moving to Ting metrics, Q4 was another outstanding quarter. We added more than 12,000 accounts and more than 18,000 devices beating Q3’s record numbers and bringing our totals to 48,000 accounts and 74,000 devices at the end of December.[141]

Ting Added 12,000 accounts and 18,000 devices During the Quarter

Moving to Ting metrics, Q4 was another outstanding quarter. We added more than 12,000 accounts and more than 18,000 devices beating Q3’s record numbers and bringing our totals to 48,000 accounts and 74,000 devices at the end of December.[142]

Gross Margin and Churn Not Given for This Quarter

Importantly gross margin percentage, annual customer contribution and customer acquisition costs continue to be right where we would like them. Last quarter I talked about our rate of growth leveling off subsequent for the launch of iPhone 5C and 5S and iOS 7.[143]

What Analysts Say About Tucows and Ting

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. In 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting provides its own customer service, billing support systems, marketing, and sales personnel.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Other sections of this report on Tucows include:

November 3, 2015: Hugh Pickens Predicts 10,000 Net Additional Ting Customers during Q3 2015

Ahead of Tucows earnings release for Q3 2015 on November 5, 2015, Hugh Pickens predicted on November 3, 2015 that Ting will add 10,000 net additional customers for the third quarter. According to Pickens Ting added an average of 12,000 new customers during each of the four quarters in 2014 (Q1: 13,000, Q2: 12,000, Q3: 11,000, and Q4: 12,000) before dropping to 9,000 net adds during the first quarter of 2015 and 10,000 in the second quarter of 2015 after the disruption caused by the Sprint FED.

Pickens expects revenue from Tucows domain services to be essentially flat this quarter and does not expect any significant contribution from Ting Fiber until 2016. Pickens predicts that Tucows will maintain their guidance for Adjusted EBITDA at $25 million for 2015 and thinks the favorable Canadian exchange rate will help Tucows meet its financial goals for the year.

On May 7, 2015 Pickens predicted that Ting would have 8,000 net additional customers for Q1 2015. Tucows actual numbers released later that day came in at 9,000 net adds. On August 8, 2015 Pickens predicted 12,000 net adds for the second quarter. The actual number came in at 10,000.

Pickens also predicts that this quarter for the first time, Ting will because the largest contributor to Tucows bottom line with the Incremental Contribution from Ting (Before Taxes and Other Expenses) equalling or exceeding the Incremental Contribution from Tucows Domain Services (Before Taxes and Other Expenses) during Q3, 2015. The Incremental Contribution from Ting (Before Taxes and Other Expenses) in Q2, 2015 was $6,919,000 while the Incremental Contribution from Tucows Domain Services (Before Taxes and Other Expenses) was $7,719,000.

October 8, 2015: Zacks Lowers Tucows Stock Rating from 'Buy' to 'Hold'

Dakota Financial News reported on October 8, 2015 that Tucows was downgraded by Zacks from a “buy” rating to a “hold” rating in a research report issued to clients and investors on October 7, 2015.[144]

October 6, 2015: Zacks Reports Consensus Earnings for Tucows will be $1.10 for the Current Fiscal Year, $1.51 for Next Fiscal Year

Dakota Financial News reported on October 6, 2015 that equities analysts expect Tucows to report $0.29 earnings per share for the current fiscal quarter and full year earnings of $1.10 per share for the current financial year. Two analysts have provided estimates for Tucows’ earnings. The highest EPS estimate is $0.30 and the lowest is $0.28. For the next year, analysts expect that the company will report earnings of $1.51 per share, with EPS estimates ranging from $1.48 to $1.54. Zacks Investment Research’s EPS calculations are a mean average based on a survey of sell-side research firms that cover Tucows.[145]

September 14, 2015: The Globe and Mail Does Feature Story on Tucows

Toronto based newspaper The Globe and Mail is one of Canada's leading newspapers and with a weekly readership of approximately 950,000 in 2011 is considered "Canada's National Newspaper," the most authoritative print news source in Canada. The Globe and Mail published a feature story on Tucows on September 14, 2015 which profiled Tucows and gathered views about the company's future from different sources.[146]

On the positive side, the newspaper quoted Cantor Fitzgerald's recent coverage of Tucows that “Ting Mobile is the current growth engine of the company,” said analyst Scott Curtis, who recently initiated coverage of Tucows with a “buy” and $36 (U.S.) a share target price. That’s more than 40 per cent above its current price, around $25 on the Nasdaq. “Ting Internet is the sexy growth opportunity." The newspaper quoted Cormark Securities analyst Hubert Mak who has a $34 target for Tucows. "We like Tucows for its defensive quality coming from its market-leading Internet domain registrar business that provides it with a steady cash flow stream,” Mr. Mak said in a note. “Further, we believe its new Ting business continues to show traction that is adding to its recurring revenue base.”

On the negative side, the newspaper said that while Tucows has done well and is diversifying in the right direction, some portfolio managers still see it as too small or too expensive right now to add to their funds. “It’s a nice little business,” said Darren Sissons, managing director at Portfolio Management Corp. “In the tech space you have to be clever and figure out where you need to go next.” Stephen Takacsy, chief investment officer and portfolio manager at Lester Asset Management, said Tucows is generating good cash flow from its domain businesses but sees the new higher-growth Ting divisions as more risky and requiring more money for expansion. “The stock is ridiculously expensive,” Mr. Takacsy said, adding that Tucows is trading at 17 times forward earnings, which is above many of its peers in both the mobile and domain services sectors. “We are much more value driven. The Internet market isn’t somewhere we’re looking for investments, but they might do very well."[147]

August 25, 2015: Cantor Fitzgerald Initiates Coverage of Tucows with One-Year Price Target of $36

MFI reported on August 25, 2015 that brokerage firm Cantor Fitzgerald has initiated coverage of Tucows with a "Buy" rating and set a one year Price Target of $36 for shares of Tucows..[148] According to a post by investguy2000, Cantor Fitzgerald's investment thesis is based on Tucows' impressive leadership that has demonstrated their proven ability to grow in competitive markets; a stable business in domain names that delivers strong cash flow; growth and gross margin expansion in Ting Mobile; operating leverage from Ting's established customer interfacing platform that enhances infrastructure productivity; Tucows’ gigabit fiber initiative with a growing pipeline of opportunities; and a strong balance sheet and access to capital that will allow Tucows to aggressively pursue business development opportunities.

"Tucows’ share price has appreciated considerably over the last few years due to the rapid success of its Ting Mobile business; we continue to believe its mobile business will grow division sales at a pace greater than 50%. Ting Internet should begin to provide a material contribution in 2017 as its first two markets scale to a critical mass," says analyst Scott Curtis in his report on Tucows. "This 'get rich slow, for a long time' business behaves like a modern utility, providing recurring cash flow with high visibility." According to Cantor Fitzgerald their Discounted Cash Flow-based 12-month target of $36.00 implies 15x (2016E) and 12x (2017E) Expected Value/adjusted EBITDA using Cantor Fitzgerald's estimates.“Tucows,” writes Curtis, "is a growth story that is de-risked on many fronts.”[149][150]

Cantor Fitzgerald, L.P. is a financial services firm founded in 1945 that specialises in institutional equity, fixed income sales and trading, and serving the middle market with investment banking services, prime brokerage, and commercial real estate financing. The firm is also active in new businesses including advisory and asset management services, gaming technology, e-commerce, and other ventures. It has more than 5,000 institutional clients and is one of 22 primary dealers authorized to trade U.S. government securities with The Federal Reserve Bank of New York. Cantor Fitzgerald's 1,600 employees work in over 30 locations, including financial centers in the Americas, Europe, Asia/Pacific, and the Middle East.[151]

August 24, 2015: Dr. Hedge writes in Seeking Alpha that Tucows Remains Materially Undervalued With Price Target Between $33 and $41

Anonymous contributor "Dr. Hedge" wrote in Seeking Alpha on August 24, 2015 that Tucows management recently raised EBITDA guidance 20% from $20 mil to $25 mil for 2015, that the quality and depth of Tucows' management team is unmatched with the company’s top 4-5 executives having served with the company for over a decade, that Tucows added 10,000 subscribers in Q2 despite having a marketing disruption for two months during the quarter, that Tucows is currently on pace to grow revenue approximately 20% and EBITDA 60% plus in 2015, and that given Tucows' organic growth profile and increasing profitability the stock remains materially undervalued. "Tucows is a defensive growth company with recurring revenue, strong free cash flow generation, and increasing profitability with an excellent management team and board of directors that exhibits strong corporate governance," writes Dr. Hedge. "The CEO is aligned with investors and continues to own 6.5% plus of the company. At today's price levels we believe the stock provides a compelling investment opportunity to long term investors who want to be a part of a disruptive company run by an outstanding management team."

Dr. Hedge writes that assuming, conservatively, that Tucows growth rate is cut in half in 2016, the company would still do approximately $3.15 per share in EBITDA in 2016. "On these numbers the stock trades at less than 8x EV/EBITDA, which for a company with increasing profitability and a long runway for growth we see as being materially undervalued. If the stock were to trade in line with other companies exhibiting similar growth trajectories as Tucows we believe the stock should receive at least an 11x multiple, if not 12-13x multiple. Under these assumptions the stock would be worth somewhere between $33 and $41, again, excluding any share repurchases."[152]

August 10, 2015: Zacks Upgrades Tucows to 'Strong Buy' with $28 Price Target

American Banking and Market News reported on August 10, 2015 that Zacks had upgraded Tucows from 'Hold' rating to 'Strong Buy' with a $28 price target for the stock. According to Zacks, “Tucows Inc. is a pioneering provider of personalized information agents and Web sites. They deliver information over the Internet and other communications mediums such as email. Their sites provide users with relevant information they cannot conveniently locate in any one place elsewhere on the Internet."[153]

August 7, 2015: Comark Securities Reiterates Tucows 'Buy' with $34 Price Target

Investguy2000 reported on August 7, 2015 that Comark has reiterated their 'Buy' rating for Tucows and increased their price target from $22 to $34. "We continue to like Tucows for its Ting Mobile that is providing the company with outsized growth which is starting to provide another growing recurring cash flow base in addition to its defensive domain registrar which had been the source to enabling this disciplined Management team to consistently return capital to shareholders. On top of this, the company is now pushing into fixed Internet which given the economics and Management’s successful track record to date will more than likely result in another solid recurring cash flow base."[154]

August 6, 2015: Hugh Pickens Predicts 12,000 Net Additional Ting Customers during Q2 2015

Just ahead of Tucows earnings release for Q2 2015 analyst Hugh Pickens predicted on August 6, 2015 that Ting will add 12,000 net additional customers for the second quarter, up from the 9,000 net additional customers during the first quarter of 2015. According to Pickens Ting added an average of 12,000 new customers during each of the four quarters in 2014 (Q1: 13,000, Q2: 12,000, Q3: 11,000, and Q4: 12,000) before dropping to 9,000 net adds during the first quarter of 2015.

"I believe the drop to 9,000 net adds in the first quarter was due to a one time event when Sprint changed their criteria for devices that were eligible to activate with Ting Mobile and other Sprint MVNO's on February 15, 2015," says Pickens. "I believe Ting will recover this quarter as Tucows moved rapidly to address the issue by identifying errors in Sprint's process leading to the number of rejections falling from 70% to 30% in just a few weeks." Pickens also notes that Tucows launched their GSM service on March 1, 2015 giving customers another option to activate devices. "We are looking for a solid second quarter with 12,000 net new Ting customers and 18,000 new devices bringing Ting to 115,000 active accounts and 181,000 active devices," says Pickens. "It will be especially interesting to see the breakdown between new Sprint adds and new customers from Ting's GSM offering."

Pickens says he expects revenue from Tucows domain services to be essentially flat this quarter and does not expect any significant contribution from Ting Internet until 2016. Pickens predicts that Tucows will maintain their guidance for Adjusted EBITDA at $20 million for 2015 and also thinks the favorable Canadian exchange rate will help Tucows meet its financial goals for the year. "The Canadian exchange rate over the past three months has been very favorable to Canadian based companies like Tucows," says Pickens. "It could add up to $1.5 million to EBITDA this year."

On May 7, 2015 Pickens predicted that Ting would have 8,000 net additional customers for Q1 2015. Tucows actual numbers released later that day came in at 9,000 net adds.

August 4, 2015: Bowser Report Provides Case Study of Tucows

Tim Rice wrote at the Bowser Report on August 4, 2015 that when they originally recommended Tucows in January 2013 it was trading for an adjusted price of $6. Since that recommendation "Ting took off. The business introduced its Android application in April 2013, began offering Tri-Band LTE service and devices in December 2013, added the iPhone 5 to its list of compatible devices in March 2014," writes Rice. "Access revenues grew from $3,965,684 in fiscal 2012 (right after recommendation) to $35,887,005 in fiscal 2015—growing 805%!"[155]

August 3, 2015: Short Seller Sonya Colberg Makes the Bearish Case Against Tucows, Sets $13 Price Target

Revealing in an "Important Disclaimer" at the end of her analysis that Streetsweeper holds a short position in TCX and stand to profit on a decline in Tucows' stock price, Streetsweeper Senior Editor Sonya Colberg wrote on August 3, 2015 that she thinks that Tucows' market valuation will drop well below the current $293 million and sets a $13 price target for TCX. Colberg, who according to her bio at Streetsweeper was once a reporter at the "recent Warren Buffet acquisition," the Tulsa World[156], (Buffet acquired the Tulsa World in 2013.[157] Colberg left the Tulsa World in 2000.[158]) gives four reasons she thinks Tucows’ stock price is ready to drop:

  • According to Colberg, Tucows’ core Internet domain name business is flat and poised for further decline. On a yearly basis, revenue for domain name services fell to $111.78 million in 2014 from $113.40 million in 2013.
  • Although Ting's subscriber base grew in 2013 and 2014, Colberg says that growth is slowing and that a Sprint policy-change hurt Ting and promises long-term negative consequences even as wireless becomes commoditized. "We believe Sprint’s change in policy constitutes more than a temporary setback. Frustrated customers will throw up their hands over Ting Mobile. Word will spread," writes Colberg. "The time is right for well-heeled giants in the mobile phone and services field who will happily scoop up Ting’s old customers, as well as potential future customers."
  • Colberg says that Tucows lacks the multi-millions to build a fiber network and her research shows the Ting fiber business probably won’t ever produce meaningful revenue. "Despite Tucows’ braggadocio, AT&T and Comcast resources easily stomp Tucows’ resources into the dirt," writes Colberg. "Inadequate bucks means Tucows can’t develop significant fiber networks or market the service."
  • Colberg notes that with 26 sells in the last year including 14 in the last three months, company officers and directors have been selling their stock in Tucows. Co-chairman of the Board Rawleigh Ralls sold 65,000 shares in May alone.[159]

June 11, 2015: TheStreet Wire Highlights Tucows as "Under The Radar Stock Of The Day"

TheStreet Wire reported on Jun 11, 2015 that Trade-Ideas LLC identified Tucows ( TCX) as a strong and under the radar candidate. "The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TUCOWS INC increased its bottom line by earning $0.54 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.54)."[160]

June 4, 2015: Hugh Pickens Writes That Ting’s High Growth and High Margins Are Fueling the Increase in Share Price

Hugh Pickens wrote a comment to Andrew Alleman's story at Domain Name Wire on June 4, 2015 that he agrees with Alleman's reason 3. "I think that investors are realizing that Tucows is no longer just a low growth/low margin domain name wholesaler," wrote Pickens. "They are realizing that with Ting’s high growth, high margins and increasingly significant contribution to the bottom line, Tucows is deserving of a higher P/E."[161]

June 4, 2015: Andrew Alleman Says Tucows' Stock is on Fire

Andrew Alleman wrote at Domain Name Wire on June 4, 2015 that if you bought shares of Tucows at the opening price one month ago, you’ve already realized a return of a whopping 57%. According to Alleman it’s not entirely clear what’s behind the surge but here are some possible reasons.[162]

1. Tucows buying back up to $20 million of its own stock on the open market.

2. Increased analyst coverage.

3. With the growth of Ting, Tucows is being valued as a technology company.

4. GoDaddy’s IPO has made people focus on other domain name companies.

5. A large player is growing its stake in the company.

May 8, 2015: Lucius Bossio Says Ting’s Q1 Subscriber Growth Suffers from Sprint’s New Unlocking Validation Process

Lucius Bossio wrote at Andriod Headlines on May 8, 2015 that CEO Elliot Noss reported that "an alarming 70% of devices that people were trying to activate on Ting were rejected following Sprint’s implementation of FED." According to Bossio, Ting is frustrated by the technical implementation of some of the required fixes, but are very happy Sprint is taking the issue very seriously as Noss noted that deactivating customers who owe the carrier a small amount of money from a long time ago may not be financially advantageous for Sprint.[163]

"Obviously the issues caused by Sprint’s FED had a significant impact on Ting’s ability to acquire new customers. Their support team quickly became overwhelmed by customers complaints, which prompted Ting to shut down all marketing and promotional activities until they could handle the increased burden placed on their support team. According to Noss, giving every prospective customer an outstanding level of service is an integral component of Ting’s strategy as this is how the company expects to attract and keep customers over the long-term; apparently Ting is just getting back to an acceptable level of service and conversion rate on their activation process."[164]

May 7, 2015: Hugh Pickens Predicts 8,000 Net Additional Ting Customers for Q1 2015

Just ahead of Tucows earnings release for Q1 2015 analyst Hugh Pickens predicted that Ting will have 8,000 net additional customers for the first quarter, down from the 11,000 net additional customers predicted on February 11, 2015 in the fourth quarter earnings conference. The numbers are predicated on an original scenario with 2% turnover in customers (2,650 customers) and a gross add of 13,650 customers necessary to reach 11,000 net adds. "I think the number of gross additional customers are going to be lower than expected," says Pickens, "because uncertainty caused by Sprint's new Financial Eligibility Date (FED) policy announced on March 3, 2015 is going to depress new customer acquisition."

"We slowed down to fix the issues that lead to this broken promise and to mitigate the risk of it happening again," wrote Andrew Moore-Crispin on the Tucows blog on April 7, 2015. "We stopped any initiatives to get new people in the door until we’re sure we’re meeting this promise once more. Very soon, we’ll be in a position to start turning the tap back on full blast, inviting and welcoming new people to Ting. We’re looking forward to looking forward."[165]

Pickens says he thinks uncertainty surrounding Sprint's FED depressed new customer adds to about 60% of normal gross adds from the period March 3 through April 7 when Tucows announced that things were getting back to normal and depressed new customer adds to 80% of the baseline during the final month of the quarter. "We believe new customers adds are now back to normal and may even increase going forward with the rollout of GSM coverage," says Pickens.

' Month 1 Month 2 Month 3 Gross Adds - Churn Net Adds
Predicted Net Adds 4,550 4,550 4,550 13,650 2,650 11,000
Modified Net Adds 4,550 2,730 3,640 10,920 2,650 8,270

March 13, 2015: Analyst Sets 12-month Price Target for Tucows of $22

Intercooler reported on March 12, 2015 that the one broker that provide coverage for Tucows has rated the stock with a buy recommendation and set a 12-month consensus target price of $22.00 for the company. The analyst is predicting that the company will post $0.22 EPS for the current quarter.[166]

January 15, 2015: Max Lukenbach Writes: Social Media May Be Useful for Predicting Ting Intra-Quarter Subscriber Growth

Max Lukenbach wrote in Seeking Alpha on January 15, 2015 that Ting subscriber growth is a key component in determing Tucows valuation but since Tucows only discloses subscriber growth on a quarterly basis he has developed an alternative method to estimate growth through measuring Ting's visibility on social media platforms such as Facebook and Twitter. "I have tracked Ting's social media growth against two of its primary peers, FreedomPop and Republic Wireless," writes Lukenbach. "I initially anticipated this to be a very casual endeavor, so that explains the limited number of MVNOs that I collected data for. I plan on adding a more MVNOs and will monitor a wider base going forward. With that said, I still argue that FreedomPop and Republic Wireless are useful and relevant comparisons."

Lukenbach's results show that Ting's Q3 to Q4 growth on Facebook was 32% compared to 13% for Freedompop and 2% for Republic Wireless. The corresponding growth on Twitter for Q3 to Q4 growth is 75% for Ting, 6% for Freedompop, and 3% for Republic. "This analysis demonstrates that Ting appeals to a younger/tech-savvy demographic, people are very happy with the product, and Ting's churn rate is likely to remain low. Furthermore, it illustrates that the company is proactive on social media, which is a low-cost and modern form of advertising."[167]

January 15, 2015: Hugh Pickens comments on Max Lukenbach's Methodology for Estimating Ting's Intra-Quarter Growth Rates

One of the problems for an investor in Tucows is that subscriber growth figures are only disclosed during the quarterly earnings conferences calls leaving investors in the dark outside these four times a year. This means that there are only four yearly opportunities for Tucows' investors to evaluate execution versus projections and there are only four opportunities for the growth figures to act as a catalyst on the stock valuation. Congratulations to Mr. Lukenbach for his insight that there may be a way for investors to gain some insight into subscriber growth on a more frequent basis and that there is probably a correlation between Ting social media mentions and subscriber growth. Thanks for compiling the data to date, and in developing a method that with more data and analysis will become very useful to investors in predicting Ting's intra-quarter subscriber growth. Mr. Lukenbach has provided a methodology that allows investors to make an informed estimate on subscriber growth between the quarterly conference calls. I look forward to Mr. Lukenbach gathering more data and to seeing how well social media mentions correlate with subscriber growth and churn.

I agree with Mr. Lukenbach that Tucows has been very astute in using social media as a cost effective way to publicize Ting and that this will probably have the most impact in reaching early adapters who are just the people people Ting needs to get the word out about their offering.

I am also looking forward to the rollout of the GSM offering and seeing what effect this will have on subscriber growth. I have the greatest respect for Elliot Noss' vision and his execution of Ting's growth plan and I hope that at some point he will begin providing Ting subscriber growth figures on a more frequent basis.[168]

December 23, 2014: MacroLion Writes: Ting's Profitable Growth Points To 30% Upside in Tucows Stock Price

MacroLion, a growth investor, wrote at Seeking Alpha on December 23, 2014 that:

  • Recent 10-K reports and management calls allow us to quantify the trajectory and economics of Ting's growth. Ting will drive company EBITDA from $8m in 2013 to $19m in 2015.
  • Ting's growth is extremely profitable: it requires only S&M investments which deliver 165% IRR.
  • The rest of Tucows business in terms of revenue and gross margin is growing (retail) due to top product offering and new gTLDs.
  • 2014 10-K is the catalyst: 2014 is the first year when Ting is noticeably contributing to EBITDA. Ting's potential is under the radar for most investors.
  • Market EV/EBITDA LTM = 20.1х, EV/EBITDA 2015F = 8.1х.

"Taking Ting net customer growth as the key driver and assuming 50-150k customers range for 2015-17, we derive a target price of $20-29.," writes MacroLion. "It could be achieved in 1-1.5 years time when Ting's growth economics and trajectory are discussed in financial reports."[169]

December 23, 2014: Hugh Pickens Comments on MacroLion that He Has Come to Similar Conclusions

Hugh Pickens wrote a comment to the article in MacroLion on December 23, 2014.

Good Article. I've independently come to similar conclusions with my financial model of Ting at: http://tingmodel.com My takeaways from Tucows recent performance are that:

  • Tucows (TCX) stock price has quintupled since launching Ting in 2012.
  • Ting is the high growth business segment of Tucows.
  • Up until the 4th quarter of 2014 Ting has contributed modestly to Tucows' bottom line.
  • A financial model of Ting's past growth predicts that Ting will soon overtake domain services to become the dominant driver for Tucows' future growth.

My model shows 146,000 Ting customers by 2015F under the 16k quarterly growth scenario and 161,000 Ting customers under the 18% quarterly growth scenario which is in line with your prediction of 143,000.

I had a previous concern that problems with the Sprint network could cause customers to leave Ting and that Sprint's poor reputation could provide a drag on Ting. However, Tucows recent announcement that they will be providing nationwide GSM service (probably through T Mobile although their partner has not yet been announced) mitigates that risk and should accelerate growth in Ting's customer base since Ting will be able to provide better coverage and start selling the iPhone 6 in February 2015.

My only real concern with Tucows at this point is with their recent decision to buy a majority stake in Blue Ridge InternetWorks and enter the independent Internet service provider business space. I am concerned that this might be a mis-step that may divert resources from their other two business lines and that Tucows might be better advised to concentrate on the MVNO business segment which by 2016F will become the primary profit center for the company.[170]

July 11, 2014: 'Undiscovered Stocks' Writes: Tucows Puts Its Customers And Shareholders First

Undiscovered Stocks, a private investor who tries to find microcap stocks that are growing and could get sell-side coverage and potential up listings as they continue to execute, wrote at Seeking Alpha on July 11, 2014 that Ting just passed the two-year mark, and has been accelerating customer adds while expanding margins at the same time. and as Ting begins to ramp considerably in the next year and beyond, the company will show significant flow-through to the bottom line.

Undiscovered Stocks writes that Ting's differentiators include:

  • Customer Service. "Ting is all about customer service. For example, when you call in, you always get a real service agent without going through the hoops of an automated prompt."
  • Honesty and Transparency. "The company culture itself is also very honest and transparent. Ting is treating its customers with respect and attention, regardless of if the customer is paying $10/month or $100/month."
  • Lower Rates. "Ting has been lowering rates but Tucows stated in the last earnings call that even though it lowered Ting’s price, the gross margins remained in the targeted range."
  • No Contracts. "Ting does not lock its users into any contracts. Customers can leave whenever they want, but due to the great customer service, the company is anecdotally experiencing less churn than other MVNOs."

According to Undiscovered Stocks, as Ting continues to become a bigger part of the revenue mix, "I expect EBITDA and cash flow to increase significantly." "Given the pace of Ting’s growth in customers, I believe that Ting will grow customers 100% in 2014, 70% in 2015, and 40% in 2016. As the operating leverage kicks in, Ting will double the overall company’s EBITDA by 2016."[171]

July 11, 2014: Hugh Pickens Writes: Elliot Noss Has Executed a Long Term Plan to Increase Stockholder Value

Hugh Pickens wrote at Seeking alpha on July 11, 2014 that Tucows CEO Elliot Noss has executed a long term plan to increase stockholder value with stock buy-backs, the reverse split, and capitalizing on Tucow's core competency in phone based customer service to enter the high growth MVNO business segment. "Noss has quadrupled Tucows' stock price since the beginning of 2012. At this point, I think there is limited downside potential given Tucows very stable and well run core business as a domain name wholesaler and a high probability of a substantial increase in the stock price within two years as we watch Tucows execute its Ting growth plan. Ting's use of social media to reduce customer acquisition cost is working to plan and Ting's infrastructure has gotten all the early bugs out and is now in place and ready to scale up for high annual subscriber growth."[172]

March 28, 2014: Mike Arnold Writes: "Tucows Is A Scrappy Tech Company Cannibalizing Itself"

Mike Arnold wrote at Seeking Alpha on March 28, 2014 that to ramp growth at Tucows, management recently introduced "what I believe is a game changing business called Ting which I believe will be a catalyst for increasing Tucows' valuation." According to Arnold, Ting appears to be catching on. "Revenues for Ting increased from $4 million in 2012 to $16.5 million in 2013, a 400%+ increase. There is plenty of tarmac for growth as well, considering the wireless communication sector is a multi-billion dollar industry and consumers are actively looking for ways to manage their monthly overhead."

Arnold says that once Ting is more established, one way to compare it might be to assess the lifetime value of the customer relationship to other subscription type businesses. "In this case, magicJack (CALL) might be a good proxy of value, as it operates in the same industry and is innovating both in terms of developing a disruptive telecommunications technology and unique value proposition for its customers. This, too, could prompt a re-rating in Tucows' shares."

Arnold concludes that at the current $140 million market cap, "I think there is little risk of permanent downside, and a rather good chance of Tucows becoming a meaningfully larger company if it executes its growth strategy (Ting) and returns value to shareholders in an accretive manner (buybacks)."[173]

Risk Factors

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows."
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Other sections of this report on Tucows include:

March 11, 2015: Ting Risk Factors From FY2014 10-K Filing With SEC

Tucows identified the following risk factors in their 10-K Filing With SEC for FY2014:[174]

  • Ting has a short operating history which may not be indicative of our future performance and, if our revenue and earnings growth are not sustainable, we may not be able to generate the earnings necessary to fund our operations or continue to grow our business.
  • Ting’s service offerings may not be successful in the long term.
  • Ting may face competitive pressure to reduce prices for our products and services, which may adversely affect our profitability and other financial results.
  • Competition in the wireless industry could adversely affect Ting’s revenues and profitability.
  • The blurring of the traditional dividing lines among long distance, local, wireless, video and Internet services contributes to increased competition for Ting services.
  • Ting employs a postpaid business model which exposes us to increased credit risk.
  • Ting may be limited in its ability to grow its business and customer base unless it can continue to obtain network capacity at favorable rates and meet the growing demands on its business systems and processes.
  • As an MVNO, Ting is dependent on its Network Operators’ for its wireless network and any disruptions to their networks may adversely affect its business and financial results.
  • Ting competes with our Network Operators’ products.

December 15, 2014: Ting ISP Risks

Tucows' announcement on December 15, 2014 that they are acquiring 70% ownership of an independent Internet service provider to provide high speed Internet access, Internet hosting and network consulting services to over 3,000 customers in Central Virginia brings a new set of risks to Tucows.[175]

  • This is a new line of business which is different from their domain services business segment and their MVNO business segment. There is no guarantee that the core competencies that have made Tucows successful will transfer over to the new line of business.
  • The new business line may divert resources from the other two business lines.
  • The new business line is very capital intensive as opposed to the two existing business segments which do not require massive capital expenditures.
  • High speed internet access is a very competitive business space with large entrenched competitors such as Google and Comcast.

December 10, 2014: Ting MVNO Risk Mitigation

Ting's announcement on December 10, 2014 that they will be partnering with a second network provider (rumored to be T-Mobile) to provide nationwide GSM coverage goes a long way towards mitigating Ting's most serious business risks from having Sprint as Ting's sole source of network coverage and the perception of Sprint's poor coverage in some geographic areas.

March 18, 2014: Ting Risk Factors From FY2013 10-K Filing With SEC

Tucows identified the following risk factors in their 2013 Annual Report:[176]

  • Ting has a short operating history which may not be indicative of our future performance and, if our revenue and earnings growth are not sustainable, we may not be able to generate the earnings necessary to fund our operations or continue to grow our business.
  • Ting’s service offerings may not be successful in the long term.
  • Ting may face competitive pressure to reduce prices for our products and services, which may adversely affect our profitability and other financial results.
  • Competition in the wireless industry could adversely affect Ting’s revenues and profitability
  • The blurring of the traditional dividing lines among long distance, local, wireless, video and Internet services contributes to increased competition for Ting services.
  • Ting employs a postpaid business model which exposes us to increased credit risk
  • Ting may be limited in its ability to grow its business and customer base unless it can continue to obtain network capacity at favorable rates and meet the growing demands on its business systems and processes.
  • As an MVNO, Ting is dependent on Sprint for its wireless network and any disruptions to such network may adversely affect its business and financial results.
  • Ting competes with Sprint’s products

Note: The Risk Factors in the 10-K Filing with the SEC for FY2014 on March 11, 2015 are identical to the Risk Factors for FY2013 except for the final factor which has been expanded from "Ting competes with Sprint’s products" to "Ting competes with our Network Operators’ products".

Insider Activity at Tucows

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows." In 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting provides its own customer service, billing support systems, marketing, and sales personnel.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Other sections of this report on Tucows include:

Introduction

According to Investopedia, insider trading is the buying or selling of a security by someone who has access to material, nonpublic information about the security. Insider trading is legal once the material information has been made public, at which time the insider has no direct advantage over other investors. The SEC requires all insiders to report all their transactions. So, as insiders have an insight into the workings of their company, it may be wise for an investor to look at these reports to see how insiders are legally trading their stock.[177]

See also:

September 25, 2015: Insider Activity by Tucows Officers and Board Members from March 5, 2015 through September 25, 2015

Following are insider transactions taken from SEC Filings made by officers and board members at Tucows since Tucows 10-K was filed on March 11, 2015:[178]

Tucows Officers and Directors Transaction Type Last Price Elliot Noss (CEO) Michael Cooperman (CFO) David Woroch (EVP, Sales and Support) Allen Karp (Co-Chair Board of Directors) Rawleigh Ralls (Co-Chair Board of Directors) Robin Chase (Director) Erez Gissin (Director) Joichi Ito (Director) Jeffrey Schwartz (Director) Carla Ann Goetz (EVP HR) Kenneth Derrick Schafer (EVP Retail) Michael Goldstein (VP Market- ing)
Shares Beneficially Owned per 10-K Filing on March 5, 2015 NA NA 764,833 325,831 173,250 69,375 513,750 4,375 50,000 13,750 60,625 21,275 25 12,913
March 6, 2015 Sell 19.00 -1,000
March 9, 2015 Sell 19.00 -1,000
March 13, 2015 Sell 19.11 -7,500
March 19, 2015 Execute Buy Option 2.40 18,750
March 20, 2015 Sell 18.79 -18,000
March 27, 2015 Sell 19.08 -8,000
March 30, 2015 Sell 19.00 -10,100
March 31, 2015 Sell 19.04 -6,900
April 9, 2015 Execute Buy Option 2.40 11,000
May 7, 2015 Execute Buy Option 2.40 16,250
May 12, 2015 Execute Buy Option 2.80 5,000
May 14, 2015 Execute Buy Option 2.40 16,250
May 19, 2015 Sell 21.50 -16,250
May 20, 2015 Execute Buy Option 2.40 16,250
May 22, 2015 Sell 24.48 -22,775
May 26, 2015 Sell 24.85 -2,225
May 27, 2015 Sell 26.43 -11,788
May 28, 2015 Sell 26.31 -15,812
May 29, 2015 Sell 27.07 -12,400
June 2, 2015 Sell 27.94 -10,000
June 16, 2015 Sell 28.66 -500
June 16, 2015 Sell 28.96 -14,455
June 17, 2015 Sell 28.90 -700
June 17, 2015 Sell 28.87 -8,250
June 17, 2015 Sell 28.85 -6,795
June 18, 2015 Sell 29.18 -3,000
June 22, 2015 Sell 35.20 -10,000
July 15, 2015 Execute Buy Option 2.48 9,375
July 15, 2015 Execute Buy Option 8.92 7,500
August 19, 2015 Sell 25.52 -6,250
August 20, 2015 Sell 24.95 -50,000
August 24, 2015 Sell 22.29 -18,750
September 3, 2015 Execute Buy Option 2.48 5,000
September 11, 2015 Sell 25.06 -30,279
September 25, 2015 Sell 24.21 -2,000
Net Activity Since 10-K Filing on March 18, 2015 NA NA -39,000 -19,029 12,250 -10,625 -106,250 0 -13,750 1,250 0 -1,750 0 -12,450

Notes

1. Taken from Tucows 10-K filing on March 11, 2015.

2. Includes an aggregate of 124,036 shares of common stock that are held in Mr Noss’s RRSP accounts. Includes 564,951 shares of Common Stock that are subject to a loan and pledge arrangement entered into by Mr. Noss in order to satisfy the required Canadian taxes and exercise price due in connection with the exercise of expiring options.

3. Includes 37,188 shares of common stock that are held in Mr. Cooperman’s RRSP account.

4. Includes 53,984 shares of common stock that are held in Mr. Woroch’s RRSP account and 10,750 shares of common stock held in his wife’s RRSP account.

5. Includes 5,000 shares of common stock that are held directly by Mr. Karp’s wife.

6. Of these shares, 56,250 shares are held in Mr. Ralls’ IRA account, 6,250 shares are held in Mrs. Ralls’ IRA account and 40,000 are held by Mrs. Ralls directly.

7. The sale price of 35.20 for 10,000 shares of TCX sold by Allen Karp on June 22, 2015 is taken from the SEC Filing and is believed to be in error. The highest trade on June 22, 2015 TCX was 32.00 and as of August 17, 2015 TCX has never traded over 32.23.[179]

March 5, 2015: Insider Activity by Tucows Officers and Board Members from March 18, 2014 through March 5, 2015

Following are insider transactions taken from SEC Filings made by officers and board members at Tucows since Tucows 10-K was filed on March 18, 2014:[180][181][182]

Tucows Officers and Directors Transaction Type Last Price Elliot Noss (CEO) Michael Cooperman (CFO) David Woroch (EVP, Sales and Support) Allen Karp (Co-Chair Board of Directors) Rawleigh Ralls (Co-Chair Board of Directors) Robin Chase (Director) Erez Gissin (Director) Joichi Ito (Director) Jeffrey Schwartz (Director) Lloyd Morrisett (Director)
Shares Beneficially Owned per 10-K Filing on March 18, 2014 NA NA 754,521 318,644 166,063 65,625 945,000 NA 42,500 10,000 56,875 44,375
April 3, 2014 Execute Buy Option 1.52 6,250
May 27, 2014 Execute Buy Option 2.24 9,375
July 3, 2014 Execute Buy Option 2.24 9,375
July 11, 2014 Execute Buy Option 2.32 37,500
August 6, 2014 Execute Buy Option 2.32 15,000
August 12, 2014 Execute Buy Option 2.24 5,000
August 20, 2014 Execute Buy Option 2.24 9,375
September 3, 2014 Execute Buy Option 2.24 5,000
December 5, 2014 Acquisition (Non Open Market) 0.00 384,361
December 5, 2014 Disposition (Non Open Market) 0.00 -695,167
December 12, 2014 Acquisition (Non Open Market) 0.00 43,461
December 12, 2014 Acquisition (Non Open Market) 0.00 7
December 12, 2014 Disposition (Non Open Market) 0.00 -154,833
December 19, 2014 Execute Buy Option 2.40 4,000
January 7, 2015 Sell 18.50 -3,461
January 7, 2015 Sell 18.50 -9,368
February 26, 2015 Acquisition (Non Open Market) 18.77 1,000
February 26, 2015 Disposition (Non Open Market) 18.77 -1,000
Net Activity through March 5, 2015 4,000 37,500 15,000 20,625 -435,000 0 5,000 0 9,375 9,375
Sum of Shares Beneficially Owned per 10-Q Filing on March 18, 2014 plus Net Activity for the Year 758,521 356,144 181,063 86,250 510,000 0 47,500 10,000 66,250 53,750
Shares Beneficially Owned per 10-K Filing on March 5, 2015 NA NA 764,833 325,831 173,250 69,375 513,750 4,375 50,000 13,750 60,625 NA

Notes

1. Taken from Tucows 10-K filing on March 18, 2014.[183]

2. Based on 11,185,384 shares outstanding as of March 17, 2013, adjusted for shares of common stock beneficially owned but not yet issued.

3. Includes an aggregate of 124,036 shares of common stock that are held in Mr Noss’s RRSP accounts. Includes 564,951 shares of Common Stock that are subject to a loan and pledge arrangement entered into by Mr. Noss in order to satisfy the required Canadian taxes and exercise price due in connection with the exercise of expiring options.

4. Includes 37,188 shares of common stock that are held in Mr. Cooperman’s RRSP account.

5. Includes 53,984 shares of common stock that are held in Mr. Woroch’s RRSP account and 10,750 shares of common stock held in his wife’s RRSP account.

6. Includes 5,000 shares of common stock that are held directly by Mr. Karp’s wife.

7. Includes an aggregate of 850,000 shares of common stock that are indirectly owned by Mr. Ralls. Of these shares, 56,250 shares are held in Mr. Ralls’ IRA account, 6,250 shares are held in Mrs Ralls’ IRA account and 850,000 are held by Lacuna Hedge Fund LLLP (“Lacuna Hedge”) and are indirectly owned by Lacuna, LLC (“Lacuna LLC”) and Lacuna Hedge GP LLLP (“Lacuna Hedge GP”). Lacuna LLC is the sole general partner of Lacuna Hedge GP, which is the sole general partner of Lacuna Hedge. Neither Lacuna LLC nor Lacuna Hedge GP directly owns any securities of the Company. Each of Lacuna LLC and Lacuna Hedge GP disclaims beneficial ownership of the shares held by Lacuna Hedge, except to the extent of its pecuniary interest therein. Mr. Ralls is a member of Lacuna LLC. Mr. Ralls disclaims beneficial ownership of the shares held by Lacuna Hedge, except to the extent of his pecuniary interest therein.

8. Includes 12,500 shares of common stock that are owned jointly by Dr. Morrisett and his wife.

Comparison With Other MVNOs

It is always useful to compare a company to another company in the same business space. Tucows is, to our knowledge, the only MVNO that is part of a publicly traded company for which subscriber information, acquisition costs, chrun, and gross margins are available. However, there are other MVNOs for which some subscriber information is available:

  • FreedomPop which is presently rumored to be talks with Sprint and other carriers about acquisition or investment
  • Virgin Mobile which was acquired by Sprint Nexus in 2009

FreedomPop

FreedomPop is a free wireless internet and mobile phone service provider based in Los Angeles, California. The company provides wireless data voice and text services for Clearwire and Sprint. FreedomPop sells mobile phones, tablets and broadband devices for use with their service. FreedomPop was co-founded by Stephen Stokols, CEO and Steven Sesar in 2011. Prior to founding FreedomPop, Stokols served as CEO of Woo Media, a video-chat and entertainment startup. FreedomPop partnered with Lightsquared in December 2011, but ended its partnership after Lightsquared did not receive Federal Communications Commission (FCC) approval to build out its network. FreedomPop began selling its first smartphones in October 2012. That month the company converted 5% of its free users to paid users. The following month, in November, the number of converted users increased to 10%. FreedomPop also began offering mobile and wireless internet services in the United States using Clearwire's 4G network. FreedomPop converted 20% of its free user base to paid users in December 2012.[184]

In April 2013, FreedomPop partnered with Sprint to expand its coverage to include 3G and 4G with Sprint compatible devices. In October 2013, one year from its initial wireless broadband launch, FreedomPop launched its beta free mobile phone plan that included voice, text, and data service. In November FreedomPop launched a bring your own device for Sprint-compatible phones.[185]

Sprint Acquisition of FreedomPop

Josh Ong reported on The Next Web on May 14, 2014 that FreedomPop was on track to hit 250,000 total subscribers. According to FreedomPop, over 60 percent of its phone customers stick to the free plan and don’t spend anything for service. This would mean that FreedomPop had 100,000 paying customers in May, 2014. According to Ong FreedomPop added 100,000 customers in the previous year. Using this figure and the 40% rate, this would mean that FreedomPop has about 120,000 paying customers at the time this comparison is being made in December, 2014.[186]

John Shinal reported in USA Today on November 12, 2014 that according to two sources Sprint was in talks with FreedomPop about a possible acquisition that could boost Sprint's revenue growth and lower its subscriber-acquisition costs. "The talks are fluid, meaning they could lead to an investment, an acquisition or no deal between the companies," writes Shinal. "Other suitors have emerged for FreedomPop, among them a large U.S. technology company and a smaller wireless carrier, according to the sources who are not authorized to speak publicly about the matter." According to Shinal an acquisition would likely value all of FreedomPop in a range between $250 million and $450 million, while an investment would value it closer to $200 million.[187]

Kevin Richard reported at GigaOm on November 12, 2014 that FreedomPop CEO Stephen Stokols said parts if not all of the report are false adding that while FreedomPop is in formal talks with “a few” companies about a potential acquisition, Sprint is not one of them. “We’ve gotten several inquiries on the M&A side, but nothing official from Sprint,” said Stokols.[188]

Valuation of FreedomPop

Dividing FreedomPop's paying customer base of 120,000 into the company's valuation range of $200 to $450 million, the value per customer is in the range of $1,660 to $3,750. Applying the same valuation per paying customer to Ting's 82,000 paying customers at the end of the third quarter in 2014 results in a valuation in the range from $136 to $307 million. Tucows domain services must be added for a total company valuation. Using Tucows stock price of $3.00 per share on December 30, 2011 before Ting was publicly announced times 11.3 million outstanding shares, provides a value of Tucows domain services of about $33 million. This gives Tucows a total valuation of between $170 and $341 million. Using the $18 stock price on December 1, 2014 times 11.3 million shares gives Tucows a market cap of $203 million putting The company at the low to mid range of its valuation if it were to become a target for acquisition.

Virgin Mobile

NBC News reported on July 28, 2009 that Sprint Nextel Corp. had made a $483 million deal to buy Virgin Mobile USA Inc. Sprint paid $5.50 in stock for each Virgin Mobile share. Sprint already owned 13.1 percent of Virgin Mobile, which uses Sprint's network to offer service. Virgin Mobile had 5.2 million subscribers who paid an average of $20 per month. Sprint has 49.1 million subscribers, including those using the network through wholesalers like Virgin Mobile.[189]

"This is a good transaction for Sprint, which already owns 13 percent of Virgin, because it provides 5 million customers which are already using its own network. This more than doubles the size of Sprint's prepaid business overnight and increases its distribution channels quickly for prepaid where it has had recent success with Boost Unlimited," wrote Walter Piecyk of Pali Research, noting that the transaction values each Virgin subscriber at $130, which the firm said is slightly above what it costs Virgin Mobile to acquire a customer.[190]

"We believe Virgin Mobile felt compelled to sell because its customer base was declining, the prepaid space is getting much more competitive and it faced a $100 million debt maturity at the end of next year that we do not believe it had enough free cash flow to pay-off," Piecyk wrote. "Virgin was selling an uncompetitive unlimited offering right next to Boost Unlimited in its own stores which we believe will either be terminated or brought to parity with Boost Unlimited. We think it's more likely that Virgin terminates its unlimited offerings and returns its focus to its legacy pay as you go model."[191]

Board of Directors of Tucows

According to the 10-K filed with the SEC on March 11, 2015 the folowing are members of Tucows Board of Directors:[192]

Allen Karp

Co-Chairman of the Board since September 2012 and Director since October 2005

Mr. Karp, 74, was with Cineplex Odeon Corporation in various positions since 1986, where he retired as Chairman and Chief Executive Officer in 2002 and as Chairman Emeritus in 2005. From 1966 to 1986, he practiced law at the law firm of Goodman and Carr LLP, where he was named partner in 1970. Mr. Karp was until recently a Director of Brookfield Real Estate Services Inc., the Chair of its corporate governance committee and sat on the audit committee, and was Chairman of the Board of Directors of IBI Group Inc., and was Chairman of the Nominating, Governance and Compensation Committee. Mr. Karp is a past director of the Toronto International Film Festival Group, where he served as Chairman of the Board from 1999 to 2007 and has served as Chairman of its Corporate Governance Committee since 2007. Additionally, Mr. Karp was previously a director of several other public corporations.

Mr. Karp has extensive executive leadership skills, long-standing senior management experience, a strong ethics and compliance focus and audit committee experience. These skills and qualifications, in addition to his current service on the boards of directors of other public companies, enable him to bring valuable perspectives to our Board, particularly with respect to corporate governance matters, and qualify him to be a director of Tucows.

Rawleigh H. Ralls

Co-Chairman of the Board since September 2012 and Director since May 2009

Mr. Ralls, 52, is a founding partner of Lacuna, LLC, an investment management company focused on both public and private companies, which he formed in October 2006. Prior thereto, from 1999 to 2006, he was Chairman of Netidentity.com, an Internet email and web hosting company, where he led corporate strategy and development until the firm’s sale in 2006. Mr. Ralls currently serves on the Board of Directors of a number of companies, including Savoya, LLC, IntraOp Medical, Knowledge Factor, and Mocapay, Inc.

Mr. Ralls has a wealth of industry experience, most notably the experience that he gained through his leadership of Netidentity.com. In addition, Mr. Ralls contributes a unique perspective to the Board’s discussions and considerations based on the two decades of investing and portfolio management experience. All of these attributes qualify Mr. Ralls to be a director of Tucows.

Erez Gissin

Director since August 2001

Mr. Gissin, 56, has served since 2010 as a managing partner in Helios Energy Investment, a Renewable Energy investment fund, and since 2005 as the Chief Executive Officer of BCID Ltd., an investment company focusing on infrastructure development projects in China. From July 2000 to March 2005, Mr. Gissin has served as the Chief Executive Officer of IP Planet Networks Ltd., an Israeli satellite communication operator providing Internet backbone connectivity and solutions to Internet Service Providers. From July 1995 to July 2000, Mr. Gissin was Vice President, Business Development of Eurocom Communications Ltd., a holding company that controls several telecommunications services, equipment and Internet companies in Israel.

Mr. Gissin has a strong background in the internet communications industry and has gained significant institutional knowledge in his long tenure as one of our directors. Mr. Gissin also has significant leadership experience as the Chief Executive Officer of BCID Ltd. and IP Planet Networks Ltd. and has extensive financial acumen derived from his years of executive experience. All of these qualities qualify Mr. Gissin to be a director of Tucows.

Joichi Ito

Director since December 2008

Mr. Ito, 48, is the director of the MIT Media Lab. He is a co-founder of Digital Garage (Tokyo Stock Exchange 4819), where he has served on the board since September 2006. Mr. Ito has been a member of the Board of Directors of the New York Times Corporation since June 2012 and of Sony Corporation since June 2013.

From June 2002 until July 2008, Mr. Ito served on the board of Pia Corporation, a ticket and entertainment magazine company in Japan (Tokyo Stock Exchange 4337). He served on the board of ICANN, a U.S. non-profit corporation, from December 2004 until December 2007. ICANN manages the domain name registration system that Tucows uses for its domain name business and ICANN receives fees from Tucows for domain name registrations.

Mr. Ito is also on the board of directors of a number of non-profit organizations, including The Knight Foundation, the MacArthur Foundation and The Mozilla Foundation. He has created numerous Internet companies, including PSINet Japan, Digital Garage and Infoseek Japan and was an early stage investor in Twitter, Six Apart, Flickr, Dopplr, Last.fm, Kickstarter, Formlabs and littleBits. He has served and continues to serve on various Japanese central as well as local government committees and boards, advising the government on IT, privacy and computer security related issues.

Mr. Ito has extensive experience as a director of a number of publicly traded companies and has a wide range of experience with internet companies generally. This experience, along with Mr. Ito’s domain specific knowledge, enables him to bring key experience to the Company and qualifies him to be a director of Tucows.

Elliot Noss

Director since August 2001

Mr. Noss, 52, is our President and Chief Executive Officer and has served in such capacity since the completion of our merger with Tucows Delaware in August 2001. From May 1999 until completion of the merger in August 2001, Mr. Noss served as President and Chief Executive Officer of Tucows Delaware. Before that, from April 1997 to May 1999, Mr. Noss served as Vice President of Corporate Services of Tucows Interactive Ltd., which was acquired by Tucows Delaware in May 1999.

Mr. Noss’s lengthy service as our Chief Executive Officer has provided him with extensive knowledge of, and experience with, Tucows’ operations, strategy and financial position. In addition, Mr. Noss has widespread knowledge of the internet and software industry generally that, coupled with his operational expertise, qualifies him to be a director of Tucows.

Jeffrey Schwartz

Director since June 2005

Mr. Schwartz, 52, has served as a director of Dorel Industries since 1987 and as Executive Vice President and Chief Financial Officer since 2003. Mr. Schwartz is a graduate of McGill University in Montreal and has a degree in the field of business administration.

Mr. Schwartz has a significant amount of public-company financial expertise, particularly in his executive experience as the chief financial officer of Dorel Industries, Inc. This executive experience, along with Mr. Schwartz’s service as one of our Audit Committee members (and as Chairman of our Audit Committee since 2005), qualifies him to be a director of Tucows.

Robin Chase

Director since October 2014

Ms Chase, 56, is a transportation entrepreneur. She is founder and former CEO of Zipcar, the largest car sharing company in the world; Buzzcar, a service that brings together car owners and drivers in a car sharing marketplace in France; and GoLoco, an online ridesharing community. She is also Executive Chairman of Veniam, a vehicle communications company building the networking fabric for the Internet of Moving Things.

Ms Chase is on the Boards of the Massachusetts Department of Transportation, the World Resources Institute, and Tucows. She also served on the National Advisory Council for Innovation & Entrepreneurship for the US Department of Commerce, the Intelligent Transportations Systems Program Advisory Committee for the US Department of Transportation, the OECD’s International Transport Forum Advisory Board the Massachusetts Governor’s Transportation Transition Working Group, and Boston Mayor’s Wireless Task Force.

Ms Chase lectures widely, has been frequently featured in the major media, and has received many awards in the areas of innovation, design, and environment, including Time 100 Most Influential People, Fast Company Fast 50 Innovators, and BusinessWeek Top 10 Designers. Robin graduated from Wellesley College and MIT's Sloan School of Management, was a Harvard University Loeb Fellow, and received an honorary Doctorate of Design from the Illinois Institute of Technology.

Her experience operating companies at the CEO level along with her numerous experiences on these boards and councils qualify her to be a director of Tucows.

Principal Shareholders of Tucows

According to the 10-K filed with the SEC on March 11, 2015 the folowing are principal shareholders of Tucows:[193]

Osmium Partners, LLC

960,269 Shares

8.7%

300 Drakes Landing Road, Suite 172, Greenbrae, CA 94904

Renaissance Technologies LLC

615,135 Shares

5.5%

800 Third Avenue, New York, NY 10022

Elliot Noss

764,833 Shares

6.9%

96 Mowat Avenue, Toronto, ON M6K 3M1

Tucows Financial Statements

In 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting provides its own customer service, billing support systems, marketing, and sales personnel.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Other sections of this report on Tucows include:

Financials and Earnings Reports Overview

Tucows 10-K Filing with SEC

Earnings Results

Tucows Quarterly Consolidated Balance Sheets

Transcripts of Earnings Conferences Referenced in This Document

Investor Videos

Ting Blog

Tucows Price History

Insider Activity at Tucows

Short Interest in Tucows

Put/Call Ratio for TCX

Latest TCX Quote

History of Ting

Competitive Analysis

Canadian Dollar

Twitter Search for Tucows

Tools

Archive of Previous Versions of This Article

Other Stocks I Invest in and Monitor

References

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows."
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Other sections of this report on Tucows include:










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About the Author

Hugh Pickens

Other sections of this report on Tucows include:


Hugh Pickens (Po-Hi '67) is a physicist who has explored for oil in the Amazon jungle, crossed the empty quarter of Saudi Arabia, and built satellite control stations for Goddard Space Flight Center all over the world. Retired in 1999, Pickens and his wife moved from Baltimore back to his hometown of Ponca City, Oklahoma in 2005 where he cultivates his square foot garden, mows nine acres of lawn, writes about local history, photographs events at the Poncan Theatre and, with his wife, is producer of the Oklahoma Pride series at Ponca Playhouse.

In 1996, Pickens edited and published My Life In Review: Have I Been Lucky of What?, the memoirs of Jack Crandall, professor of history at SUNY Brockport. Since 2001 Pickens has edited and published “Peace Corps Online,” serving over one million monthly pageviews. Pickens' other writing includes contributing over 2,000 stories to “Slashdot: News for Nerds,” and articles for Wikipedia, “Ponca City, We Love You”, and Peace Corps Worldwide.

Disclaimer

I am long term investor in Tucows. The purpose of this web site is to monitor my investment in Tucows and to do that I compile information and news releases including earnings reports, earnings conferences calls, press releases, and independent reporting on Tucows and Ting. In addition I have built a financial earnings model keep track of how Ting has performed in the past and make predictions on how it will perform in the future.

This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in the company and uses this web site to follow the company. All information on this web site comes from publicly available sources. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Writing

History, Biography, and Politics

Science and Technology

Business

Ponca City, Oklahoma

Peace Corps Writing

Personal Essays

Phillips 66

Conoco and Phillips 66 announced on November 18, 2001 that their boards of directors had unanimously approved a definitive agreement for a "merger of equals". The merged company, ConocoPhillips, became the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. On November 11, 2011 ConocoPhillips announced that Phillips 66 would be the name of a new independent oil and gasoline refining and marketing firm, created as ConocoPhillips split into two companies. ConocoPhillips kept the current name of the company and concentrated on oil exploration and production side while Phillips 66 included refining, marketing, midstream, and chemical portions of the company. Photo: Hugh Pickens all rights reserved.

For nearly 100 years oil refining has provided the bedrock of Ponca City's economy and shaped the character of our community. Today the Ponca City Refinery is the best run and most profitable of Phillips 66's fifteen worldwide refineries. The purpose of this collection of reports is to provide a comprehensive overview of Phillips 66's business that documents and explains the company's business strategy and execution of that strategy.

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations

Updates to the Web Site

This report is updated frequently. Check back to see the latest information about Tucows or subscribe to the rss feed for this article. If you have any information or insights that you would like to see added to this report please contact Hugh Pickens by email at hughpickens AT gmail DOT com.

Copyright

The content of this report is licensed under the Creative Commons under an Attribution-Noncommercial-Share Alike 2.0 Generic license. Except for short, fair use excerpts, the material on this article cannot be used for commercial purposes without permission of Hugh Pickens. Attribution for use of any material from this article must be provided to Hugh Pickens and if used on the web a link must be provided to http://hughpickens.com.

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