Tucows Inc., a global internet services leader, has reported its financial results for the second quarter ended June 30, 2023. The company saw positive growth in its Ting and Wavelo businesses, with respective revenue increases of 21% and 20% compared to the previous year. However, Wavelo was the standout business this quarter, with significant increases in revenue, gross profit, and Adjusted EBITDA compared to the previous quarter.
The Tucows Domains business has stabilized post-pandemic, and the company expects revenues and margin to return to incremental growth. They anticipate realizing the benefits of foreign exchange-related price increases from the second half of 2022. Cash flow from Wavelo and Tucows Domains has been used to reduce syndicated debt.
Consolidated net revenue for the second quarter of 2023 increased by 2.3% to $85.0 million compared to the same period in 2022. The growth in Ting and Wavelo revenues was partially offset by decreases in revenues in Tucows Domains and Tucows Corporate. The decrease in gross profit was driven primarily by increased network depreciation and expenses in the Ting network, as well as decreased margin from the Domains business.
The net loss for the second quarter of 2023 was $31.0 million, primarily due to a one-time cost associated with the early redemption of Ting preferred shares, as well as continued investment in the Ting Fiber network expansion, higher stock-based compensation, and higher interest expenses.
Adjusted EBITDA for the second quarter of 2023 decreased by 54% compared to the previous year, primarily due to reduced contributions from Ting’s investments in fiber network expansion. There was also a lower contribution from Expiry aftermarket sales in the Domains business and the impact of the contract asset unwinding in the Wavelo business.
Cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of the second quarter of 2023 were $159.6 million compared to $11.8 million at the end of the first quarter of 2023 and $6.5 million at the end of the second quarter of 2022.
Overall, Tucows remains optimistic about the growth potential of its businesses and expects continued progress in the coming quarters.