Revenue fell year over year; stock down 25% since earnings report.
Tucows (NASDAQ: TCX) released earnings last week and reported a slight drop in revenue in its domain name business for Q3. The result echoes what many companies in the domain registration business are experiencing as the pandemic boom recedes.
Revenue in its domains business was $60.3 million in the quarter, down 1% from Q3 2021. The adjusted EBITDA for the domain name business was down 9%.
In a pre-recorded investor briefing, Dave Woroch, CEO of Tucows Domains, said the company is “reviewing and streamlining expenses.”
The strong dollar is also hurting the business:
For many of our resellers in Europe, we price services in euros and have a cost base in U.S. dollars. The currency impacts from the U.S. dollar gaining strength against the
euro has and continues to apply downward pressure to our gross margin. To address this, we have adjusted prices in Q3 and have announced that we will do so again later this quarter.
Tucows has other business lines, and overall revenue at the company grew 2.8% to $78.1 million.
Shares in Tucows have dropped about 25% since the earnings report.