Tucows’ Wavelo business saw year over year revenue growth of 20% in the second quarter as subscribers have flocked to the platform.
CEO Elliot Noss called Wavelo the company’s “standout business this quarter.”
Wavelo is Tucows’ BSS/OSS company that offers a cloud-based software platform that provides provisioning services, billing and subscription tools for ISPs and mobile operators. The platform completed its migration of nearly seven million Boost subscribers for DISH, as well as the migration of Ting to the platform in the second quarter.
The Wavelo business had increases of 47% in revenue and 60% in gross profit in Q2 compared to the first quarter this year.
At its peak, Wavelo was migrating more than 200,000 subscribers per night—"the fastest telecom migration in my career and the fastest that anyone we can talk to has seen,” said Wavelo CEO Justin Reilly. The quarter was Wavelo’s strongest since inception.
Tucows’ Ting Internet business also fared well in the second quarter with a 21% increase in revenue year over year. As the company's network construction progress continues, Ting added 1,900 net subscribers in Q2.
Total serviceable addresses for Ting-owned infrastructure sat at 109,300 in the second quarter —up 28% year over year. There was “a small restating” of the serviceable address count with 839 owned and partner infrastructure addresses removed after updating data, Noss said.
“We expect that growth will continue as we had a large number of serviceable addresses become available late in the quarter with a healthy pre-order pipeline to generate new subscriber installs,” added Noss.
In early May, Ting completed a debt syndication for $239 million set to mature in April 2053, which holds an effective interest rate of 8.2%. Noss had said that infusion of cash positioned Ting to shift from growth to execution mode.
This quarter Tucows again used cash flow from Wavelo and Tucows Domains to reduce its debt.
Financials
Tucows’ net revenue for the second quarter increased 2.3% to $85.0 million in the second quarter. The growth in Ting and Wavelo revenues was offset by decreases in revenues in Tucows Domains and Tucows Corporate.
The company said domains under management and transactions have stabilized post pandemic, but there was a lower contribution from Expiry aftermarket sales in Tucows’ Domains business.
Gross profit for the second quarter of 2023 decreased 18.2% to $18 million year over year, driven primarily by increased network depreciation and network expenses as the Ting network footprint expands.
Net loss for the second quarter of 2023 was $31.0 million, or a loss of $2.86 per share, with the loss being “primarily the result” of a one-time cost of $14.7 million related to an early redemption of a portion of the Ting preferred shares, in addition to costs from the continued investment in the Ting Fiber network expansion and depreciation, higher stock-based compensation and higher interest expenses resulting from the new Ting asset-backed security (ABS) facility.