Core business revenue up slightly, but headline number drops due to sale of mobile customer base.
Tucows (NASDAQ: TCX), a domain name and communications company, announced earnings after the market closed today.
Q3 2020 revenue was $74.3 million. That’s down 16.3% from the same quarter last year but it’s difficult to compare. Tucows sold its mobile virtual network operator Ting during the quarter. That, combined with a $1.9 million bulk sale of domains in Q3 2019, accounted for the fall in revenue. Excluding the impact of those two items, revenue eked out a 2% gain.
The gross margin for the domains and Ting internet businesses, both of which Tucows retains, increased 10% year-over-year when excluding the portfolio sale.
New domain registrations in Tucows’ wholesale domains channel increased 30%, and in the retail channel increased 20%, a trend this year as more businesses move online due to the pandemic.
Net income was $0.7 million, down from $4.2 million. Excluding the impact of the Ting mobile sale, it would have been $3.4 million.
Tucows still owns a portfolio of surname domain names that it uses for its RealNames email service. It sells domains from this portfolio from time to time. It grossed $215,000 in sales of surname domains in Q3. Based on my understanding of the typical sales price, I suspect Tucows sold 4-5 domains.