Tucows will operate its three business lines like stand-alone businesses.
Tucows (NASDAQ: TCX) announced its 2021 results yesterday and released a video explaining how it is reorganizing the company.
The financials are hard to compare to prior periods due to the sale of the Ting mobile business. Overall, revenues were down slightly for the year but up 16.5% in Q4 2021 compared to Q4 2020.
The domains business was essentially flat yet notched a record year for gross margin and adjusted EBITDA.
Looking forward, Tucows is reorganizing into three distinct businesses underneath the Tucows umbrella. While it has had three business lines for a while, they will now operate as separate businesses.
To explain the change, Tucows CEO Elliot Noss donned four different outfits, two of which are worth capturing: I don’t recall the last time I’ve seen Noss in a coat and tie, and wow, that Tucows hockey sweater (pictured above).
TCX will be the holding company for three units: Tucows Domains, Ting (fiber-to-the-home) and Wavelo (the new brand name for its telco billing/customer service software unit). Finance, HR, legal, M&A, and IT will remain under TCX but allocate their costs to the businesses. The businesses have the option to bring these functions in-house in the future.
With the change, Ting will be able to raise money independently. The company hopes to announce financing for expanding its fiber network soon. With independent funding for Ting, Tucows will continue share buybacks this year.
I also found it interesting that Noss dedicated some of his prepared remarks on the earnings call to Web3. He said, in part:
When we look back ten years from now, I believe we will see that Web3 – and at its simplest I use that term to mean publicly verifiable distributed databases – will have had a similar impact to that of the Internet in the 1995 to 2005 time period. It impacted virtually every business – and of course some more than others. Where the OG Internet created a global set of connections, Web3 will mostly impact identity, finance, and governance. And every leader in my position needs to be thinking about what these changes will mean for their business.
You can read his full comments about Web3 here (pdf).