Tucows Inc: Form 10-K for the period ended Dec 31, 2025

Overview

Our mission is to provide simple useful services that help people unlock the power of the Internet.

We accomplish this by reducing the complexity of our customers’ experience as they access the Internet (at home or on the go) and while using Internet services such as domain name registration, email and other Internet related services. We are organized into three operating and reporting segments - Ting, Wavelo, and Tucows Domains. Each segment is differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. The Ting segment contains the operating results of our retail high speed Internet access operations, including its wholly owned subsidiaries - Cedar and Simply Bits. The Wavelo segment includes our platform and professional services offerings, as well as the billing solutions to Internet services providers ("ISPs"). Tucows Domains includes wholesale and retail domain name registration services, as well as value-added services derived through our OpenSRS, Enom, Ascio, EPAG and Hover brands.

Our Chief Executive Officer ("CEO"), who is also our chief operating decision maker, reviews the operating results of Ting, Wavelo and Tucows Domains as three distinct segments in order to make key operating decisions as well as evaluate segment performance. Certain revenues and expenses are excluded from segment results as they are centrally managed and not monitored by or reported to our CEO by segment, including mobile retail services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate Information Technology ("IT") shared services.

Ting

Ting and its wholly owned subsidiaries, Cedar and Simply Bits includes the provision of high-speed Internet access services to select towns throughout the United States, with operations focused on serving existing markets. Our primary sales channel is through the Ting website. The primary focus of this segment is to provide reliable Gigabit Fiber and Fixed Wireless Internet services to consumer and business customers. Revenues from Ting Internet are all generated in the U.S. and are billed on a monthly basis. Generally, Ting Internet services have no fixed contract terms, aside from certain bespoke contracts with business customers.

As of December 31, 2025, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 109,000 partner infrastructure serviceable addresses and 54,000 active accounts under its management; compared to having access to 134,000 owned infrastructure serviceable addresses, 45,000 partner infrastructure serviceable addresses and 51,000 active accounts under its management as of December 31, 2024. These figures exclude serviceable addresses and accounts attributable to Ting's wholly-owned subsidiary Simply Bits.

Strategic Review and Developments

During the year ended December 31, 2025, Ting initiated and currently continues a review process for the Ting business focused on evaluating strategic alternatives to optimize its capital structure and long-term operating model given the ongoing capital needs of Ting. This process has included the exploration of potential asset sales, partnership structures and other strategic transactions involving Ting’s fiber network assets.

In addition, as previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 5, 2025, on December 1, 2025, Ting received written notice from Generate, the holder of Ting’s Series A Preferred Units, asserting that under the Ting Fiber LLC Amended and Restated Limited Liability Company Agreement, dated as of August 11, 2022 (the “LLC Agreement”), a Return Breach and a Trigger Event has occurred as a result of Ting’s failure to pay the quarterly preferred return for two consecutive quarters. Generate has reserved its right to pursue remedies available under the LLC Agreement and applicable law, including the ability to make a request for redemption of all Series A Preferred Units (a “Redemption Request”). As of the date of this report, Generate has not submitted a request for the redemption of all Series A Preferred Units nor sought to exercise any of its remedies under the LLC Agreement. Refer to “Note 13. Redeemable Preferred Units” to the Consolidated Financial Statements for further details.

Under the terms of the LLC Agreement, if Generate were to submit a Redemption Request following a Trigger Event, Ting would be required to redeem all outstanding Series A Preferred Units at the applicable redemption price within 30 days of such request, an estimated $204.9 million. As a result of this contractual provision, the Series A Preferred Units were reclassified from long-term to current liabilities in the Company’s Consolidated Balance Sheet as of December 31, 2025.

The Company does not believe that the Return Breach or Trigger Event has had a material adverse impact on Ting’s day-to-day operations, customer service or network performance. Ting continues to operate in the ordinary course while the Company evaluates strategic alternatives and engages in discussions with Generate.

Wavelo

Wavelo includes the provision of full-service platforms and professional services providing a variety of solutions that support Communication Services providers ("CSPs"), including subscription and billing management, network orchestration and provisioning, and individual developer tools. Wavelo's focus is to provide accessible telecom software to CSPs globally, minimizing network and technical barriers and improving Internet access worldwide. Wavelo's suite of flexible, cloud-based software simplifies the management of mobile and Internet network access, enabling CSPs to better utilize their existing infrastructure, focus on customer experience and scale their businesses faster. Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s Mobile Network Operating System ("MONOS") software to drive additional value within its Digital Operator Platform, and Ting integrating Wavelo’s Internet Service Operating System ("ISOS") and Subscriber Management ("SM") software to enable faster subscriber growth and footprint expansion. The Wavelo segment also includes the Platypus brand and platform, our legacy billing solution for ISPs. The revenues from Wavelo's MONOS, ISOS, SM and professional services are all generated in the U.S. and our customer agreements have set contract lengths with the underlying CSP. Similarly, Wavelo's revenues from Platypus are largely generated in the U.S., with a small portion earned in Canada and other countries.

Tucows Domains

Tucows Domains includes wholesale and retail domain name registration services, as well as value-added services derived through our OpenSRS, Enom, Ascio, EPAG and Hover brands. Tucows Domains generates revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations. In addition, we earn revenues from the sale of retail domain name registration and email services to individuals and small businesses. Tucows Domains revenues are attributed to the country in which the contract originates, which is primarily in Canada and the U.S for OpenSRS and Enom brands whereas it is primarily in European nations for Ascio and EPAG.

Our primary distribution channel is a global network of more than 32,000 resellers that operate in approximately 200 countries and who typically provide their customers, the end-users of Internet-based services, with solutions for establishing and maintaining an online presence. Our primary focus is serving the needs of this network of resellers by providing the broadest portfolio of gTLD and country code top-level domain options and related services, a white-label platform that facilitates the provisioning and management of domain names, a powerful Application Program Interface, easy-to-use interfaces, comprehensive management and reporting tools, and proactive and attentive customer service. Our services are integral to the solutions that our resellers deliver to their customers. We provide “second tier” support to our resellers by email, chat and phone in the event resellers experience issues or problems with our services. In addition, our Network Operating Center proactively monitors all services and network infrastructure to address deficiencies before customer services are impacted.

We believe that the underlying platforms for our services are among the most mature, reliable and functional reseller-oriented provisioning and management platforms in our industry, and we continue to refine, evolve and improve these services for both resellers and end-users. Our business model is characterized primarily by non-refundable, up-front payments, which lead to recurring revenue from renewals and positive operating cash flow.

Wholesale, primarily branded as OpenSRS, Enom, EPAG and Ascio, derives revenue from its domain name registration service. Together the OpenSRS, Enom, EPAG and Ascio Domain Services manage 21.5 million domain names under the Tucows, Enom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management has decreased by 3.0 million, or 12.3%, since December 31, 2024.

Value-Added Services include hosted email which provides email delivery and webmail access to millions of mailboxes, Internet security services, WHOIS privacy and other value-added services. All of these services are made available to end-users through a network of web hosts, ISPs, and other resellers around the world. In addition, we also derive revenue by monetizing domain names which are near the end of their lifecycle through expiry auction sale.

Retail, primarily, Hover, derives revenues from the sale of domain name registration and email services to individuals and small businesses. Our retail domain services also include our Personal Names Service – based on over 34,000 surname domains – that allows roughly two-thirds of Americans to purchase an email address based on their last name. The retail segment now includes the sale of the rights to its portfolio of surname domains used in connection with our RealNames email service and our Exact Hosting Service, that provides Linux hosting services for individual and small business websites.

Additional information about segments can be found in “Note 20. Segment Reporting” to the Consolidated Financial Statements.

Intellectual Property

We believe that we are well positioned in the wholesale domain registration and email markets due in part to our highly-recognized “Tucows”, “OpenSRS”, “Ascio” and “Enom” brands and the respect they confer on us as a defender of end-user rights and reseller-friendly approaches to doing business. We were among the first group of 34 registrars to be accredited by ICANN in 1999, and we remain active in Internet governance issues.

Our success and ability to compete depend on our ability to develop and maintain the proprietary aspects of our brand name and technology. We rely on a combination of trademark, trade secret and copyright laws, as well as contractual restrictions to protect our intellectual property rights.

We have registered the Tucows trademark in the United States, Canada and the European Union and we register additional service marks and trademarks as appropriate and where such protection is available.

We seek to limit disclosure of our intellectual property by requiring all employees and consultants with access to our proprietary information to commit to confidentiality, non-disclosure and work-for-hire agreements. All of our employees are required to sign confidentiality and non-use agreements, which provide that any rights they may have in copyrightable works or patentable technologies accrue to us. Before entering into discussions with potential vendors and partners about our business and technologies, we require them to enter into a non-disclosure agreement. If these discussions result in a license or other business relationship, we also generally require that the agreement containing the parties’ rights and obligations include provisions for the protection of its intellectual property rights.

Customers

Within the Ting segment, customers are a very broad mix of consumers, small businesses and corporations seeking high-speed Internet services. Wavelo offers services to a small number of CSPs focused in the U.S. along with EchoStar, their largest external customer, and Ting, their internal customer, until such time we expand these offerings to other Mobile Virtual Network Operators ("MVNOs") or Mobile Network Operators ("MNOs"). The majority of the customers to whom we provide services as Tucows Domains are generally either web hosts or ISPs. A small number of customers are consultants and designers providing our services to their business clients, or retail consumers registering a personal domain name.

During the years ended December 31, 2025, December 31, 2024 and December 31, 2023 one customer, EchoStar, accounted for 11.7%, 10.7% and 10.7% of revenue.

As internet and digital demand scales, Tucows captures market opportunity by eliminating the need for clients to develop and support proprietary systems for non-core services. Tucows captures this market opportunity by eliminating the need to own, develop and support non-core applications in-house. By providing high-value full-service platforms and value-added services, Tucows allows customers to offload operational complexity in exchange for marketplace scalability and focus on customer acquisition and retention.

Seasonality

During the first quarter of the fiscal year, Tucows Domains will often see higher contract liabilities and higher deferred cost of fulfillment in regard to domain name registrations, due to a larger volume of renewals occurring at the beginning of the year as compared to subsequent periods. The demand for Ting and Wavelo services is not impacted by seasonality.

Competition

Our competitors may be divided into the following groups:

We expect to continue to experience significant competition from the competitors identified above and, as our business continues to develop, we expect to encounter competition from other providers. Service providers, Internet portals, web hosting companies, email hosting companies, outsourced application companies, country code registries and major telecommunication firms may broaden their services to include services we offer.

We believe the primary competitive factors in Ting are:

• Providing a superior customer service experience;
• Providing a simple and friendly user experience through more usable web and application interfaces and more fair and transparent pricing;
• Being agnostic on Internet hardware, including network routers; and
• Providing superior technology, speed and reliability with fiber to the home services.

We believe the primary competitive factors in Tucows Domains are:

• Providing superior customer service by anticipating the technical requirements and business objectives of resellers and providing them with technical advice to help them understand how our services can be customized to meet their particular needs;
• Providing cost savings over in-house solutions by relieving resellers of the expense of acquiring and maintaining hardware and software and the associated administrative burden;
• Enabling resellers to better manage their relationships with their end-users;
• Facilitating scalability through an infrastructure designed to support millions of transactions across millions of end-users; and
• Providing superior technology and infrastructure, consisting of industry-leading software and hardware that allow resellers to provide these services to their customers without having to make substantial investments in their own software or hardware.

We believe the primary competitive factors in Wavelo are:

• Event-based architecture is the foundation to our modern platforms, which means less network bandwidth consumption and less central processing unit ("CPU") utilization, cutting costs and speeding up delivery, enabling new features, functionality and better customer experiences;
• Our product suite is modular by nature, so our platforms can work just as well together as they do independently, and alongside other best-in-class software - to fill specific gaps in operations, network provisioning, subscriber management, or anything in between; and
• CSPs are able to select the best of breed software and use it where they please, versus being forced into a traditional BSS/OSS software stack that forces them to use that providers' version of software to have full functionality.

Although we encounter pricing pressure in many markets in which we compete, we believe the effects of that pressure are mitigated by the fact that we deliver a high degree of value to our customers through our business and technical practices. We believe our status as a trusted supplier also allows us to mitigate the effects of this type of competition. We believe that the long-term relationships we have made with many customers results in a sense of certainty that would not be available to those customers through a competitor.

Human Capital Resources

Employee Profile

As of December 31, 2025, we had approximately 759 full-time employees and 112 contracted employees globally. As a global Internet and technology company, we have a wide range of employees, including management professionals, technicians, engineers, and call center employees. None of our employees are currently represented by a labor union. We consider our relations with our employees to be good. Approximately 54% of our employees are based in Canada, followed by 28% based in the U.S., and the remaining 18% are spread across countries in Europe and other regions. Of our contracted and fulltime employees, approximately 265 support our Ting segment, 203 support our Wavelo segment, and approximately 307 support our Tucows Domains segment. The remaining 96 employees support corporate functions and shared technology services used across the Tucows group.

We offer competitive compensation in addition to employee stock options, physical and mental health benefits, learning allowances, future planning programs for employee Registered Retirement Savings Plans ("RRSP/401k") contributions, as well as generous vacation, maternity, paternity and adoption leaves for our employees.

As an organization, Tucows is proud to foster a flexible, remote-first work environment that empowers employees to find a work style that fits their individual circumstances. Some employees perform work in other environments, including fulfillment centers, customers’ homes or businesses to perform service installation, and in the field to build out our network facilities.

Organizational Restructuring and Capital Efficiency Initiatives

In February 2024 and October 2024, Ting implemented workforce reductions and a capital efficiency plan to align its operating structure with its strategic focus on existing fiber markets and to reduce other operating expenses and capital outlays. These actions significantly reduced Ting’s workforce and streamlined certain operational functions.

The restructuring initiatives were substantially implemented during the year ending December 31, 2024 ("Fiscal 2024"). As a result, Ting entered fiscal year 2025 with a reduced cost structure and a more focused capital deployment strategy centered on completing builds in existing markets, rather than expanding into new markets. As noted above, the Company is currently exploring potential asset sales, partnership structures and other strategic transactions involving Ting's fiber network assets.

Additional information regarding restructuring charges and related financial impacts can be found in “Note 21. Restructuring costs” to the Consolidated Financial Statements.

People Philosophy and Employee Wellness

As an organization, Tucows believes in the importance of driving meaningful change and impact, and that same commitment extends to its people. Building and maintaining our culture is not a standalone effort; it is a fundamental part of our employee experience and helps us to create an environment where our team can flourish, grow and do their best work.

This philosophy is reflected in Company-wide programs, policies, and resources designed to support employees across all levels and functions. The Company invests in comprehensive health and benefits plans, assistance programs for employees and their families, and wellness and support tools. The Company regularly reviews and updates its hiring practices and internal policies to help promote consistent, fair treatment across the organization.

Tucows prioritizes the mental and personal well-being of its employees, and has implemented a series of initiatives designed to support employee well-being, including daily mindfulness sessions open to all employees and Company-wide memberships to mindfulness platforms. The Company also maintains eight voluntary employee resource groups that provide employees with shared-interest communities, opportunities for professional connection, and programming that contributes to broader Company culture.

Compliance with Government Regulations

Ting

Our Fiber Internet services are subject to a number of regulations and commitments. The Federal Communications Commission ("FCC") frequently considers imposing new broadband-related regulations such as those relating to an Open Internet. States and localities also consider new broadband-related regulations, including those regarding government-owned broadband networks, net neutrality and connectivity. Additionally, as an ISP, we must implement certain network capabilities to assist law enforcement in conducting surveillance of persons suspected of criminal activity. From time to time, the FCC considers imposing new regulatory obligations on ISPs. We are committed to an Open Internet and do not block, throttle or engage in paid or affiliated prioritization, and have committed not to block, throttle or discriminate against lawful content.

Tucows Corporate - Mobile Services

The FCC and other federal, state and local, as well as international, governmental authorities have jurisdiction over our business. The licensing, construction, operation, sale and interconnection arrangements of wireless telecommunications systems are regulated by the FCC and, depending on the jurisdiction, international, state and local regulatory agencies. In particular, the FCC imposes significant regulation on licensees of wireless spectrum with respect to how radio spectrum is used by licensees, the nature of the services that licensees may offer and how the services may be offered, and resolution of issues of interference between spectrum bands.

Wavelo

Our Wavelo Segment is less subject to government regulations and commitments because it enables subscription and billing management, network orchestration and provisioning, and individual developer tools. Outside of *General Data Protection Regulation (“*GDPR”), which creates obligations around the procurement, processing, publication and sharing of personal data, as further outlined below, there is limited regulation or commitment to government bodies for software.

Tucows Domains

Our Tucows Domains segment is subject to regulation by ICANN, federal and state laws in the U.S. and the laws of other jurisdictions in which we do business. These include:

ICANN: The registration of domain names is governed by ICANN. ICANN is a multi-stakeholder private sector, not-for-profit corporation formed for the express purposes of overseeing a number of Internet-related tasks, including management of the DNS, allocation of IP addresses, accreditation of domain name registrars and registries and the definition and coordination of policy development for all of these functions. Tucows, Enom, EPAG and Ascio are each individually accredited by ICANN as domain name registrars and thus our ability to offer domain name registration products is subject to our ongoing relationship with, and accreditation by, ICANN.

Country Code Top-Level Domain ("ccTLD") Authorities: The regulation of ccTLDs is governed by national regulatory agencies of the country underlying the specific ccTLDs, such as Canada (.ca). Our ability to sell ccTLDs is dependent on our ability to maintain accreditation in good standing with these various international authorities.

Communications Decency Act ("CDA"): The CDA generally protects online service providers, such as Tucows, from liability for certain activities of their customers, such as posting of defamatory or obscene content, unless the online service provider is participating in the unlawful conduct. Notwithstanding the general protections from liability under the CDA, we may nonetheless be forced to defend ourselves from claims of liability covered by the CDA, resulting in an increased cost of doing business.

Digital Millennium Copyright Act (“DMCA”): The DMCA provides recourse for owners of copyrighted material who believe that their rights under U.S. copyright law have been infringed on the Internet. Under the DMCA, we generally are not liable for infringing content posted by third parties. However, if we receive a proper notice from a copyright owner alleging infringement of its protected works by web pages for which we provide hosting services, and we fail to expeditiously remove or disable access to the allegedly infringing material, fail to post and enforce a digital rights management policy or a policy to terminate accounts of repeat infringers, or otherwise fail to meet the requirements of the safe harbor under the DMCA, the owner may seek to impose liability on us.

General Data Protection Regulation: GDPR creates obligations around the procurement, processing, publication and sharing of personal data. Potential fines for violations of certain provisions of GDPR reach as high as 4% of a company’s annual total revenue, potentially including the revenue of its international affiliates. The solutions we develop for GDPR-compliance may not be adequate in the views of regulatory authorities or ICANN, which may cause the loss of WHOIS privacy revenue or increase our costs of developing compliant solutions or subject us to litigation, liability, civil penalties, or loss of market share. As the privacy laws and regulations around the world continue to evolve, these changes could adversely affect our business operations in similar ways.

Several bodies of law may be deemed to apply to us with respect to various customer activities. Because we operate in a rapidly evolving industry and since our industry is characterized by changes in technology and in new and growing illegal activity, these bodies of laws are constantly evolving. As a host of content through our Exact Hosting business, and to a lesser extent as a registrar of domain names, we may be subject to potential liability for illegal activities by our resellers’ customers on their websites. We provide an automated service that enables users to register domain names. We do not monitor or review, nor does our accreditation agreement with ICANN require that we monitor or review, the appropriateness of the domain names we register for our customers or the content of their websites, and we have no control over the activities in which these customers engage. While we have policies in place to terminate domain names or to take other action if presented with evidence of illegal conduct, customers could nonetheless engage in prohibited activities without our knowledge.

Corporate Information

Our principal place of business is located in Canada.

We were incorporated under the laws of the Commonwealth of Pennsylvania in November 1992 under the name Infonautics, Inc. In August 2001, we completed our acquisition of Tucows Inc., a Delaware corporation, and we changed our name from Infonautics, Inc. to Tucows Inc. Our principal executive offices are located at 96 Mowat Avenue, Toronto, Ontario, M6K 3M1 Canada. Our telephone number is (416) 535-0123. We also have offices in Germany, Denmark and the U.S.

We are subject to the filing requirements of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). Therefore, we file annual reports, periodic reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically at www.sec.gov (http://www.sec.gov).

Our website address is tucows.com. We make available through our website, free of charge, copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as amended as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. The information on the website listed above is not and should not be considered part of this Annual Report and is not incorporated by reference in this document.

Information about our Executive Officers and Key Employees

The following table sets forth the names, ages and titles of persons currently serving as our executive officers and key employees.

David Woroch currently serves as our Chief Executive Officer of Tucows Inc. and Tucows Domains Services. Since joining Tucows in 2000, David has been a leader at the company’s flagship business, Tucows Domains, scaling it into a large wholesale domain registrar and a cornerstone of Tucows’ recurring-revenue model. He has guided the Company through multiple acquisitions—including Enom, EPAG, Ascio Technologies, the International division of Melbourne IT, and UNR Registry Services—which have expanded Tucows’ global scale and reputation. Under his leadership, Tucows Domains has become a recognized pioneer in customer experience, automation and reseller enablement.

Ivan Ivanov has served as our Chief Financial Officer since August 2024. He also served as the Chief Executive Officer of Ting since November 6, 2025. Prior to joining the Company, Mr. Ivanov spent twenty-two years at Verizon and most recently served as Executive Director and business unit CFO, where he led both the consumer and business finance teams. Mr. Ivanov began his career at Verizon on the M&A and Corporate Development team, progressing to a variety of other financial specialties, including cash flow planning, network and IT capital allocation, and commercial finance, where he led Verizon’s fiber deployment program. Mr. Ivanov has a Master of Accounting from Seton Hall University and he is also a graduate of Drexel University with a Bachelor of Arts in Finance.

Bret Fausett joined Tucows in September 2017 as our Chief Legal Officer. Prior to joining Tucows, Mr. Fausett worked for Uniregistry, where he had served as General Counsel for six years. Prior to Uniregistry, Mr. Fausett worked as outside legal counsel to a number of domain industry related companies.

Justin Reilly joined Tucows in September 2019 and currently serves as our Chief Executive Officer of Wavelo. Prior to joining Tucows, Justin was Head of Product & Customer Experience Innovation at Verizon, as well as a founder of a number of companies with consumer grade product and machine learning at their core.

Our business faces significant risks. Some of the following risks relate principally to our business and the industry and statutory and regulatory environment in which we operate, including those highlighted in this section and summarized below. Other risks relate principally to the securities markets and ownership of our stock. As a result, the following risk factors, as well as other information included or incorporated by reference elsewhere in this Annual Report on Form 10-K, should be considered in evaluating our business and future prospects. The risks described below may not be the only risks we face. Additional risks that we do not yet know of or that we currently think are immaterial may also impair our business operations. If any of the events or circumstances described in the following risk factors actually occur, our business, financial condition or results of operations could suffer, and the trading price of our common stock could decline.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

We operate in highly competitive and consolidating industries, which may impact our ability to grow and maintain profitability.

The markets we serve—Internet services (Ting), wireless communications (Tucows Corporate – Mobile Services), BSS/OSS software (Wavelo), and domain registration (Tucows Domains)—are highly competitive and undergoing significant consolidation. Many of our competitors have greater financial, technical, and marketing resources, enabling them to offer lower prices, provide broader service bundles, and enhancing their purchasing power for equipment, content, and infrastructure. As consolidation increases, larger competitors may further strengthen their cost advantages, making it more difficult for us to attract and retain customers.

To remain competitive, we may need to reduce pricing, increase service offerings, or invest in customer acquisition, which could pressure margins, increase churn, and negatively impact cash flows. Additionally, lower prices could attract less loyal or lower-value customers, further affecting profitability.

In the domain registration industry, regulators are increasingly scrutinizing market consolidation and competitive practices, which could impact our ability to scale through acquisitions, partnerships, or pricing adjustments. Any regulatory action affecting domain pricing, reseller agreements, or distribution channels could constrain growth in our domain business.

Our service offerings may not be successful if we are unable to maintain existing customer relationships or establish new customer relationships.

EchoStar is Wavelo's main customer and represents the majority of its revenues, until such time as we are able to scale our services to additional customers. As a result, we are exposed to significant risk if we are unable to maintain this customer relationship or establish new relationships with other MNOs or MVNOs. In addition, Wavelo’s revenues are directly tied to the subscriber volumes of EchoStar’s MVNO or MNO networks, and its profitability is contingent on EchoStar’s ability to continue to add and retain subscribers on its platform.

Accordingly, Wavelo’s long-term success depends on its ability to maintain existing customer relationships and broaden its customer base through the acquisition of new customers and expanded adoption of its platforms. If Wavelo is unable to do so, its revenues, operating results, and growth prospects could be materially adversely affected.

We may be limited in our ability to grow our service offerings and customer base within our businesses, unless we can continue to manage our vendor relationships and supply chain to obtain valuable products and service options to offer to our customers.

To stay competitive, we must offer a range of valuable products and services while effectively managing vendor relationships and supply chains. A critical aspect of this is securing domain name registration options through various TLDs and ccTLDs for our Tucows Domains segment. Our business is particularly vulnerable to fee increases imposed by registries like Verisign, which controls .com domains. Verisign, for instance, charges $10.26 per .com registration, with ICANN imposing an additional $0.20 fee. Under Verisign’s registry agreement, which extends through 2030, Verisign may increase .com prices by up to 7% annually during the final four years of the term, allowing for a potential price increase as early as the fourth quarter of 2026. Any such increase would raise our cost of revenues. For our Ting Internet segment, we depend on leased fiber capacity, installation equipment, and third-party network access, and any disruptions in supply or cost increases could affect our ability to scale and maintain profitability.

Adverse conditions in the U.S. and international markets could materially adversely affect our results of operations and financial condition.

Unfavorable economic conditions, including economic slowdowns, volatile inflation rates, rising interest rates, lower employment levels or reduced consumer and business spending, could negatively affect demand for our products and services and increase our operating costs. During periods of economic uncertainty, customers may delay purchasing decisions, reduce usage of our services, downgrade to lower-priced offerings, or experience financial distress, which could adversely impact revenues, margins, and cash flows across our businesses.

In addition, inflationary pressures and higher interest rates have increased, and may continue to increase, our costs, including labor, energy, network operations, and interest expense. If adverse economic conditions persist or worsen, our cost-reduction efforts may be insufficient to offset these impacts, and our results of operations and financial condition could be materially adversely affected. A severe or prolonged economic downturn could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all. Moreover, the uncertainty surrounding government funding debates and debt-ceiling negotiations can negatively affect market conditions, investor sentiment, and the liquidity of small-cap and microcap issuers such as ours. Accordingly, any future federal government shutdown or protracted budget impasse could materially and adversely affect our regulatory compliance, financing options and capabilities, and overall financial condition.

Changes in Internet infrastructure, adoption, and navigation practices could impact our business.

Our success depends on the continued expansion and stability of the Internet as a global platform for communication and commerce. Any fundamental shift in Internet usage, governance, or navigation could materially impact our business, financial condition, and growth prospects.

• Tucows Domains: The domain registration industry relies on the continued use of the domain name system (DNS) for Internet navigation. Emerging technologies, such as alternative traffic routing systems, keyword-based navigation, or government-controlled Internet frameworks, could reduce reliance on domain names. If widely adopted, these changes could diminish demand for domains and impact our revenue.
• Global Expansion: We expect future Internet growth to come from international markets, where adoption is currently lower. If Internet usage does not expand as expected, or if governments restrict domain registrations, our growth strategy and revenue potential could be adversely affected.

Any major shift in Internet infrastructure, governance, or navigation practices could reduce demand for our services and negatively affect our long-term financial performance.

The Company's success depends on our ability to adapt to technological advancements and evolving industry trends.

The industries in which we operate are characterized by rapid technological change, evolving customer expectations, and increasing competition from emerging technologies. Failure to anticipate and adapt to these changes could impact our ability to attract and retain customers, maintain competitive pricing, and sustain profitability.

• Ting Internet: Fiber-optic technology currently offers unmatched speed, reliability, and scalability, but future advancements in wireless broadband, 5G, and satellite internet could reduce demand for fiber-based services, particularly in multi-family housing and underserved markets. As we expand our fiber subscribers, we must continuously invest in network performance, scalability, and infrastructure upgrades to remain competitive. Inefficiencies, operational failures, or the inability to accommodate increased traffic demand could erode service quality, damage our reputation, and impact financial performance.
• Wavelo: The wireless communications industry is undergoing rapid transformation, including the adoption of AI-driven automation, network optimization, and customer service enhancements. We must continuously evaluate new technologies, platform integrations, and evolving competitive landscapes to maintain market relevance. Competitors with greater financial resources and economies of scale may offer services at lower prices, impacting our revenue growth and margins.
• Tucows Domains: The domain registration and internet services industry is evolving with AI-powered tools enabling automated domain search, DNS management, and fraud detection. These innovations may reduce demand for traditional domain registration services or allow competitors to optimize pricing and customer acquisition more efficiently. Additionally, emerging e-commerce platforms and AI-generated website builders could disrupt the traditional domain ecosystem, requiring us to adapt or risk losing market share.

Our long-term success depends on continuous investment in technology, infrastructure, and service innovation. Failure to adapt to market changes, integrate emerging technologies, or maintain operational scalability could negatively impact our growth, competitive position, and financial performance.

Our business depends on our strong brands. If we are not able to maintain and enhance our brands, our ability to expand our customer base will be impaired and our business and operating results will be harmed .

In recognition of the evolving nature of the Internet services market and to make it easier to clearly differentiate each service we offer from our competitors, we enhanced our branding by focusing our primary service offerings under seven distinct brands, namely “OpenSRS”, “Enom”, “Hover", "EPAG", "Ascio", “Ting”, and "Wavelo". We also believe that maintaining and enhancing the “Tucows” corporate brand and our service brands is critical to expanding our customer base. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brands may become increasingly difficult and expensive. Maintaining and enhancing our brands will depend largely on our ability to be a technology leader providing high quality products and services, which we may not do successfully. To date, we have engaged in relatively little direct brand promotion activities. This enhances the risk that we may not successfully implement brand enhancement efforts in the future.

Our ability to successfully execute on the strategic process for Ting is critical to addressing its liquidity needs, and failure to do so on a timely basis could have a material adverse effect on the business.

Given Ting’s ongoing capital requirements, we have commenced a process to review strategic alternatives for the Ting business. This process is intended to address Ting’s liquidity needs and long-term sustainability and may include a range of potential outcomes, such as a sale, recapitalization, restructuring, partnership, or other strategic transaction.

There can be no assurance that the process to review strategic alternatives will result in any transaction or outcome, that any transaction pursued will be completed on acceptable terms, or that it will be completed on a timeline sufficient to address Ting’s liquidity needs, or will fully discharge Ting’s obligations. The availability, timing, and terms of any strategic transaction will depend on numerous factors, including market conditions, investor interest, Ting’s operating performance, and broader economic and industry conditions, which are outside of our control.

If the process does not result in a successful transaction, or if it is delayed or abandoned, Ting may be required to pursue other measures to address its liquidity needs, including more significant reductions in operating expenses, deferral or abandonment of strategic initiatives, raising capital on unfavorable terms, or pursuing restructuring, bankruptcy or insolvency alternatives. Any such actions could materially and adversely affect Ting’s business, financial condition, and results of operations and could result in a loss of some or all of our investment in Ting.

In addition, this process may divert management’s attention, create uncertainty among employees, customers, suppliers, and investors, create and increase volatility in the trading price of our securities. Litigation, including securities class action litigation, or other regulatory actions and investigations often follows certain significant business transactions, such as the announcement of any strategic transaction, or the announcement of negative events. We may be exposed to such litigation even if no wrongdoing occurred. Litigation is usually expensive and also diverts management’s attention. These effects could persist regardless of whether a transaction is ultimately completed and could have a material adverse effect on our consolidated business, financial condition, and results of operations.

Ting’s ability to continue as a going concern depends on significant changes to its operations or additional sources of liquidity.

Ting has incurred recurring operating losses and negative cash flows and has historically relied on external financing, including redeemable preferred units and term notes, to fund its operations. Based on current forecasts, Ting’s existing cash resources are expected to be insufficient to fund operations and meet its financial obligations beyond the second quarter of the year ending December 31, 2026 ("Fiscal 2026"), under a business-as-usual scenario. The Return Breach related to the Series A Preferred Units, as well as current market conditions, may significantly impact Ting’s ability to raise any additional financing at acceptable rates, or at all. Further details on the Return Breach are described in "Note 13. Redeemable Preferred Units" of the Notes to the Consolidated Financial Statements.

Management has initiated a process to review strategic alternatives, as detailed in the above risk factor, and is addressing Ting’s liquidity needs by reducing operating costs and restructuring operations. Ting’s ability to continue as a going concern is dependent, in part, on the success of this strategic review process. However, there can be no assurance that these plans will be successfully implemented on a timely basis, or at all, or that they will generate sufficient liquidity to enable Ting to continue operations.

If Ting is unable to execute these plans or obtain additional funding when needed, it may be required to significantly curtail operations, pursue financing on unfavorable terms, or seek protection under bankruptcy or insolvency laws. Any such outcomes could materially and adversely affect our consolidated results of operations and the value of our investment in Ting, which could in turn affect the price of our common stock, our relationship with third parties with whom we do business and our ability to raise additional capital.

If the Company is required to wind down or substantially reduce operations at Ting, it may incur costs, which could adversely affect the Company’s financial condition and results of operations.

If Ting’s strategic review process does not result in a transaction or other outcome that addresses Ting’s liquidity needs and long-term sustainability, the Company may determine that it is necessary to wind down, restructure, or more substantially reduce operations at Ting. Any such actions could require the Company to provide financial and operational support to facilitate an orderly transition and could result in significant costs being incurred.

In connection with a wind-down or significant reduction in operations, Ting may incur costs related to employee severance, retention and termination benefits, contract termination or exit costs, professional and advisory fees and other restructuring-related expenses.

As the ultimate parent and shared service provider to Ting for certain business functions, the Company may incur costs primarily related to employee severance and termination benefits, contract termination or exit costs, and professional service and advisory fees associated with services provided at the corporate level. In addition, the Company may incur costs to settle certain obligations under commercial agreements, leases, vendor contracts and other commitments of Ting where it has acted as guarantor to those agreements. Any such costs incurred at the Company level could reduce liquidity available at the Company and limit its ability to deploy capital to other businesses or strategic initiatives.

RISKS RELATED TO OUR OPERATIONS AND INFRASTRUCTURE

We rely on third-party network operators, data centers, and service providers, and any disruptions to these systems could negatively impact our business.

Our operations depend on the continuous availability and reliability of network infrastructure, data centers, and cloud service providers. Any system failure, service interruption, or infrastructure damage—whether within our own facilities or those of our third-party partners—could result in service disruptions, loss of revenue, reputational harm, and financial liabilities.

• Ting Internet relies on our Fiber Network, as well as third-party-owned networks, including municipal and private ("Partner Network Providers") in certain markets. Damage to network facilities, failure to maintain government authorizations, or non-compliance with regulations by these third parties could disrupt our service and result in financial losses.
• Wavelo depends on data centers, public cloud providers, and key observability service providers to monitor outages and ensure platform availability. Service interruptions could impact billing and provisioning services for clients, affecting customer retention and revenue.
• Tucows Corporate – Mobile Services operates on third-party wireless networks. Failures in their network infrastructure, security breaches, or regulatory non-compliance could lead to subscriber losses, increased costs, or operational challenges. Our master services agreement does not provide indemnification for network outages or disruptions, increasing our exposure to risk.
• Tucows Domains depends on IT and communications systems housed in data centers, some of which are in regions with high seismic activity. System failures due to natural disasters, cyberattacks, sabotage, or financial instability of data center operators could cause prolonged service outages, negatively affecting our brands, revenue, and profitability.

We are subject to minimum purchase commitments with some partner network providers and mobile network operators.

In certain Ting markets, we operate on third-party-owned internet networks, including Partner Network Providers, rather than building our own infrastructure. We pay fees based on minimum purchase commitments, which often increase as network construction expands and new serviceable addresses become available. To maintain profitability in these markets, we must grow our customer base and manage churn to offset these fixed costs.

Additionally, under our Ting Mobile agreement, we have a "take or pay" minimum purchase commitment with our MNO supplier. Due to the small size of our retained mobile subscriber base, we have incurred penalties related to underutilization from limited growth in the mobile subscriber base, with $3.9 million accrued as of December 31, 2025. The Company incurred these penalties throughout the year ending December 31, 2025 ("Fiscal 2025") and thereafter until the initial term of the contract and contractual minimums was complete in January 2026. The contract will automatically continue month-to-month thereafter, with no expected penalties in the month-to-month arrangement. Should we continue to be bound by any minimum purchase commitments in excess of our customer-based usage, our cost of revenue may increase, negatively impacting financial results.

Slower-than-expected subscriber growth and ongoing operating losses could impair Ting’s ability to meet its financial and operational obligations and limit its access to additional financing.

Ting has incurred recurring operating losses and negative operating cash flows and continues to require substantial capital to fund its operations. Ting’s ability to meet its financing commitments, including scheduled interest and principal payments under its term notes and obligations under its redeemable preferred units, depends in part on achieving subscriber growth and operating performance.

Ting’s recent subscriber growth has been below internal forecasts, and there can be no assurance that subscriber growth will improve or meet expectations in future periods. Lower-than-expected net additions to Ting’s subscriber base would reduce recurring revenue and cash flow, increase pressure on liquidity, and impair Ting’s ability to fund operations and service its debt.

In addition, Ting has a cost structure that includes significant fixed and semi-fixed expenses related to network operations, personnel, and customer support. If Ting is unable to scale revenues sufficiently to absorb these costs, or if cost-reduction initiatives are delayed or less effective than anticipated, operating losses may increase, further constraining liquidity and limiting Ting’s financial flexibility. These factors could materially and adversely affect Ting’s business, financial condition, and results of operations.

RISKS RELATED TO CYBERSECURITY, DATA PRIVACY, AND INTELLECTUAL PROPERTY

We face cybersecurity risks that could disrupt our business, damage our reputation, and result in financial and legal liabilities.

As a provider of internet-based services, we collect, store, and process sensitive customer, employee, and business data across our operations. We rely on centralized data processing, online services, and third-party providers, increasing our exposure to cyber threats, data breaches, and unauthorized access. Any compromise of our network security or IT systems could lead to service disruptions, data loss, reputational harm, regulatory penalties, and financial liability.

Cyberattacks, including malware, phishing, ransomware, deepfake fraud, and AI-driven hacking techniques, continue to increase in sophistication, frequency, and impact. Nation-state actors and organized cybercriminal groups are increasingly targeting technology infrastructure providers, and as a company supporting core internet services, we may be at greater risk. AI-driven threats, such as realistic social engineering attacks and domain abuse, may further expose us to fraudulent activity, regulatory scrutiny, and increased compliance costs.

Additionally, supply chain attacks—particularly those targeting open-source software and third-party dependencies—have become more prevalent, increasing the risk of compromised infrastructure and security vulnerabilities. Despite our investments in security controls, fraud detection tools, and risk mitigation strategies, our defensive measures may not be sufficient to prevent or detect all cyber incidents.

A significant security breach, data loss, or service outage could result in legal claims, increased regulatory oversight, financial penalties, loss of customer trust, and damage to our competitive position, all of which could materially affect our business, financial condition, and results of operations.

Evolving laws and regulations governing intellectual property and internet services may expose us to increased liability and compliance costs.

The legal framework surrounding intellectual property, domain registration, and online content liability continues to evolve, and changes in these laws could increase our legal exposure, regulatory burden, and compliance costs.

As a provider of domain registration and hosting services, we do not monitor the appropriateness of domain names or website content created by our customers, nor are we required to do so under our ICANN accreditation. However, we may be subject to legal claims arising from illegal or infringing activities conducted by third parties using domains registered through our platforms. While we maintain policies to address misuse, we cannot prevent all violations, and enforcement efforts may result in legal disputes, reputational harm, or regulatory penalties.

Several laws currently shield internet service providers and domain registrars from liability, including:

• The Communications Decency Act (CDA), which limits liability for user-generated content, except in cases of direct participation in unlawful activity.
• The Digital Millennium Copyright Act (DMCA), which provides safe harbor protections for hosting third-party content, contingent on compliance with takedown requests.
• The Anti-Cybersquatting Consumer Protection Act (ACPA), which governs domain name disputes and limits registrar liability absent bad faith intent to profit.

These protections, however, are subject to judicial interpretation and legislative changes, both in the U.S. and internationally. Some jurisdictions have introduced stricter content liability laws, data localization mandates, and intellectual property protections that may be difficult or costly to comply with. If courts narrow existing legal protections or governments impose new regulatory obligations on domain registrars, we may be required to modify our business practices, enhance compliance programs, or absorb additional operational costs.

Additionally, domain registrars are increasingly facing tort liability for domain disputes, security breaches, and fraudulent registrations. While we implement safeguards against unauthorized transfers, phishing, and domain hijacking, our defenses may not always be effective, and we may be subject to claims that increase our litigation exposure and financial risk.

We maintain general liability insurance, but coverage may be insufficient, disputed, or unavailable for certain claims. Any significant uninsured losses, regulatory penalties, or litigation costs could adversely impact our financial condition and results of operations.

Data protection regulations may impose legal obligations on us that we cannot meet or that conflict with our ICANN contractual requirements.

In 2018, the European Commission adopted the GDPR, which creates obligations around the procurement, processing, publication and sharing of personal data. Potential fines for violations of certain provisions of GDPR reach as high as 4% of a company’s annual total revenue, potentially including the revenue of its international affiliates. The solutions we develop for GDPR-compliance may not be adequate in the views of regulatory authorities or ICANN, which may cause the loss of WHOIS privacy revenue or increase our costs of developing compliant solutions or subject us to litigation, liability, civil penalties, or loss of market share. As the privacy laws and regulations around the world continue to evolve, these changes could adversely affect our business operations in similar ways.

Disputes involving intellectual property rights, domain name ownership, or cybersecurity incidents could be costly and adversely affect our business and results of operations.

We rely on intellectual property laws and contractual protections, including confidentiality and invention assignment agreements, to protect our proprietary technology and other intellectual property. These protections provide only limited safeguards, particularly in foreign jurisdictions, and disputes or litigation involving intellectual property or other rights of third parties may be costly and time-consuming, divert management attention, and result in damages, loss of rights, or restrictions on our ability to operate our business.

As a domain name registrar, we are regularly involved in disputes relating to the registration, ownership, and use of domain names, including proceedings under ICANN’s Uniform Domain Name Dispute Resolution Policy or litigation under the Anti-Cybersquatting Consumer Protection Act. While registrars are generally afforded certain protections, failure to comply with applicable requirements or court orders could result in liability and increased operating costs.

Domain names are valuable digital assets, and cyber threats such as phishing, credential theft, unauthorized account access, and other evolving attack methods create risks of domain loss, transfer, or hijacking. If our systems or those of our customers are compromised, we may face reputational harm, legal claims, regulatory scrutiny, or litigation, even where the breach originates from a customer’s systems. Despite implementing security measures, no system is immune to attack, and any impairment of intellectual property or related intangible assets could require us to record significant charges that could materially adversely affect our financial condition and results of operations.

RISKS RELATED TO FINANCIAL AND MACROECONOMIC CONDITIONS

The assertion of a Return Breach under Ting’s Unit Purchase Agreement could, if Generate exercises its contractual rights, adversely affect Ting’s liquidity and capital structure.

Ting entered into a Series A Preferred Unit Purchase Agreement (the “Unit Purchase Agreement”) with Generate on August 8, 2022, and closed the transaction contemplated thereby on August 11, 2022. As of December 31, 2025, the balance of the Series A Preferred Units was $137.3 million, excluding deferred financing costs.

As described in “Note 13. Redeemable Preferred Units” of the Notes to the Consolidated Financial Statements, on December 1, 2025, Ting received written notice from Generate asserting that a Return Breach and a Trigger Event had occurred under the Unit Purchase Agreement based on Ting’s failure to pay the quarterly preferred return for two consecutive quarters. Generate reserved its rights to pursue remedies available under the LLC Agreement and applicable law, including the ability to make Redemption Request.

The occurrence of the Return Breach and Trigger Event do not create an immediate liquidity requirement for Ting, unless Generate makes a Redemption Request. If Ting did receive a Redemption Request from Generate, the redemption price of an estimated $204.9 million would become due under the Unit Purchase Agreement. The redemption price under such a request includes the original issue price, any unsatisfied preferred return, as well as a make-whole premium.

To date, Generate has not exercised any of the remedies available to them or made a Redemption Request. Management has engaged with Generate in proactive and collaborative discussions as part process to review strategic alternatives for Ting. However, there can be no assurances that Generate will not exercise its remedies under the Unit Purchase Agreement. Should Generate make any such request, Ting does not have sufficient cash or liquid assets to pay the redemption price. In such circumstances, Ting may be required to pursue significant operational restructuring, seek additional financing on unfavorable terms, or pursue bankruptcy or insolvency alternatives, any of which could have a material adverse effect on Ting's business, financial condition, and results of operations.

The rights asserted by Generate in connection with the Return Breach relate solely to Ting Fiber, LLC and its subsidiaries. Under the LLC Agreement, Generate’s remedies are limited to the equity interests and assets of Ting Fiber, LLC and its subsidiaries and do not extend to Tucows Inc. or its other subsidiaries. In addition, Generate’s rights are subordinate to the rights of secured noteholders under Ting’s asset-backed securitization facilities and do not affect the Company’s securitized debt structure or the collateral securing those facilities.

Our significant indebtedness and financing arrangements could adversely affect our ability to operate our business, pursue strategic initiatives, and meet our financial obligations.

We have significant indebtedness and financing obligations, including securitized debt, redeemable preferred units, and a revolving credit facility, which may limit our ability to raise additional capital, invest in our businesses, pursue strategic opportunities, or respond to changing market conditions. A substantial portion of our cash flow may be required to service debt and preferred returns, reducing funds available for operations and growth initiatives.

Our debt and financing arrangements contain financial and operational covenants and restrictions, including limitations on additional indebtedness, distributions, asset sales, investments, and other transactions. Our ability to comply with these covenants depends on our future operating performance and financial condition, which are subject to economic, competitive, and business factors beyond our control. Failure to maintain compliance with these covenants could result in defaults, acceleration of obligations, restricted access to liquidity, increased borrowing costs, or the loss of access to committed financing.

The agreements governing our credit facility impose significant operating and financial restrictions on us and our subsidiaries. These restrictions, subject in certain cases to customary baskets, exceptions, and ratio tests, may limit our subsidiaries’ ability to engage in certain transactions, including incurring additional indebtedness, issuing equity, paying dividends, repurchasing stock, making investments, selling assets, or engaging in mergers, acquisitions, or other strategic transactions. As of December 31, 2025, our trailing twelve-month total debt to Adjusted EBITDA ratio for the businesses subject to the credit facility was 3.12:1.00, and our ability to remain in compliance with applicable financial covenants will depend on future operating performance and cash flows.

In addition, certain of our financing arrangements, including redeemable preferred unit financings at Ting Fiber, LLC, impose operational and financial milestones and restrictions that affect the timing and availability of additional funding. Ting has historically relied on proceeds from redeemable preferred units and term notes to fund operations and network expansion, and its ability to access additional financing depends on generating sufficient cash flow and meeting other requirements and conditions. There can be no assurance that these conditions will be achieved. There can be no assurance that these milestones will be achieved. In light of the Return Breach, it is unlikely that Ting will be able to secure additional financing on acceptable terms, or at all.

In any situation where we seek to obtain additional debt or equity financing, we may be unable to do so on favorable terms, or at all, when needed. Future financing may be costly, impose additional restrictions, or result in dilution to existing stockholders. If we are unable to generate sufficient cash flow from operations or obtain additional capital or alternative financing on acceptable terms, our business, financial condition, results of operations, and stockholder value could be materially and adversely affected.

The international nature of our businesses and operations expose us to additional risks that could harm our business, operating results, and growth strategy; including risks related to taxation and foreign currencies fluctuations.

We operate and conduct business in multiple countries, including Canada, and our international operations require significant management attention and financial resources. Our results of operations may be affected by risks associated with operating across different jurisdictions, including foreign currency exposure, changes in tax laws, and compliance with varying legal and regulatory requirements.

We are also subject to foreign currency exposure. A significant portion of our operating costs is denominated in Canadian dollars. While we use foreign currency hedging instruments to mitigate a portion of our exposure, these hedging arrangements may not fully offset the impact of unfavorable currency movements. In particular, a sharp appreciation of the Canadian dollar relative to the U.S. dollar, increases in the cost of renewing hedging instruments, or limitations on the availability or effectiveness of such hedges could increase our operating costs and adversely affect our results of operations.

Taxation risks: We are subject to income taxes and other taxes in multiple jurisdictions, and our effective tax rate and tax liabilities may be affected by changes in tax laws, regulations, treaties, or interpretations thereof, including the adoption of new U.S. or international tax legislation. In addition, increased scrutiny by tax authorities or changes in enforcement practices could result in additional tax liabilities, penalties, or interest, which could adversely affect our business, financial condition, or results of operations.

In addition, operating internationally exposes us to challenges related to managing geographically dispersed operations, complying with foreign laws and regulations (including data protection and privacy requirements), protecting intellectual property, competing with international and local competitors, accessing sufficiently qualified labor pools, and integrating acquisitions in foreign markets. Any of these factors could limit our ability to successfully execute our growth strategy and could have a material adverse effect on our business, financial condition, or results of operations.

Rising inflation and interest rates may adversely affect our businesses, financial condition, and operating results.

The Company continues to operate in a challenging macro environment as inflation and interest rates continue to rise globally. The impact of these issues on our business will vary by geographic market and operating segment. We continue to monitor economic conditions closely, as well as segment revenues, cash position, cash flow from operations, interest rates and other factors. The Company continues to monitor and assess wage inflation across all our operating segments - Ting, Tucows Domains, and Wavelo, and is managing it against offsets in hiring plans and contractor mix. Our Ting segment is also exposed to inflation through its Fiber Network build and installation costs, and sustained levels of inflation increase the costs of related materials and contracted labor. We continue to assess ways to reduce costs, however there can be no assurance as to the effectiveness of our efforts to mitigate any impact of adverse economic conditions, and other unknown developments.

We have substantial debt obligations, including credit facilities and term notes. Our ability to service this debt depends on operational cash flows, borrowing capacity, and prevailing interest rates. Rising interest rates or changes in the credit market could increase the cost of debt servicing, limit our ability to access additional financing on favorable terms, or affect our ability to deploy capital for strategic initiatives. In the event of an economic downturn, reductions in IT spending by businesses and consumers could negatively impact demand for domain registrations, website services, and fiber broadband subscriptions, further affecting our financial condition.

In addition, our exposure to interest rate fluctuations relate primarily to our 2023 Credit Facility, entered into on September 22, 2023. The Company's interest rates are based on the Secured Overnight Financing Rate ("SOFR").

Macroeconomic, geopolitical, and market conditions may adversely affect our business, financial condition, and operating results.

There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. Our financial performance is directly and indirectly impacted by global and regional economic conditions, which in turn are influenced by financial market volatility, inflation, fluctuating interest rates, tariffs, sanctions, trade disputes, barriers and restrictions, credit availability, and overall consumer and business confidence. The current international trade and regulatory environment is subject to significant ongoing uncertainty. Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain.

Economic uncertainty may result in reduced business investment, delayed spending decisions, or cost-cutting measures by customers, which could negatively impact demand for our domain services, internet infrastructure, and platform offerings. Additionally, weak economic conditions may lead to reduced public-sector spending and shifts in government policies that affect telecommunications infrastructure and internet governance.

Political instability, trade restrictions, and geopolitical conflicts - including the war in Ukraine, ongoing tensions in the Middle East, increasing tensions in Central and South America, including recent U.S. military operations in Venezuela and Iran, and the potential expansion of these conflicts - may disrupt supply chains, increase regulatory uncertainty, or impact global financial markets, leading to fluctuations in currency exchange rates, interest rate volatility, and potential restrictions on international business operations. In particular, changes in trade policies, tariffs, and taxation laws could affect our cost structure, cross-border transactions, and market access.

Additionally, prolonged economic downturns or tightening credit conditions may increase our exposure to customer credit risk, impact our receivables collections, and result in higher allowances for doubtful accounts. If these conditions persist, they could have a material adverse effect on our business, financial condition, and results of operations.

RISKS RELATED TO REGULATORY AND LEGAL COMPLIANCE

Changes in government regulations may increase compliance costs and impact our business operations.

Our business is subject to evolving federal, state, and international regulations, which may increase operational costs, restrict market access, or impact future growth.

The FCC grants wireless licenses that are subject to renewal and revocation. If our Network Operator’s license is not renewed or if compliance requirements change, it could disrupt our Ting Mobile service offerings. Additionally, various state regulations on billing practices, privacy, and consumer protection could increase compliance costs and make it more difficult to implement national sales and marketing programs.

Our Tucows Domains segment operates in a regulatory environment that is increasingly complex and subject to change. Governments worldwide may impose new laws affecting online resellers, content liability, privacy, consumer protection, and cross-border commerce. Changes in tax regulations, content policies, or data security requirements could result in higher compliance costs, increased liability, or restrictions on our ability to provide services.

The adoption of new regulations, reinterpretation of existing laws, or removal of legal protections for internet services could hinder market growth, increase costs, or disrupt our operations, potentially impacting our financial condition and results of operations.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.

We are subject to income and other taxes in a number of jurisdictions and our tax structure is subject to review by both domestic and foreign tax authorities. We must make significant assumptions, judgments and estimates to determine our current provision for income taxes, deferred tax assets and liabilities and any valuation allowance that may be recorded against our deferred tax assets. Although we believe that our estimates are reasonable, the ultimate determination of our tax liability is always subject to review by the applicable tax authorities. Any adverse outcome of such a review could have a negative effect on our operating results and financial condition in the period or periods for which such determination is made. Our current and deferred tax liabilities could be adversely affected by:

• international income tax authorities, including the Canada Revenue Agency and the U.S. Internal Revenue Service, challenging the validity of our arms-length related party transfer pricing policies or the validity of our contemporaneous documentation.
• changes in the valuation of our deferred tax assets; or
• changes in tax laws, regulations, accounting principles or the interpretations of such laws.

We could be subject to changes in tax rates, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities. This could discourage the registration or renewal of domain names.

Due to the global nature of the Internet, it is possible that, although our services and the Internet transactions related to them typically originate in the United States, Canada, Denmark and Germany, governments of other states or foreign countries might attempt to regulate our transactions or levy sales, income or other taxes relating to our activities. Tax authorities at the international, federal, state and local levels are currently reviewing the appropriate treatment of companies engaged in Internet commerce. New or revised international, federal, state or local tax regulations may subject us or our customers to additional sales, income and other taxes. We cannot predict the effect of current attempts to impose sales, income or other taxes on commerce over the Internet on Tucows or on our customers. New or revised taxes and, in particular, sales taxes, would likely increase the cost of doing business online and decrease the attractiveness of advertising and selling goods and services over the Internet. New taxes could also create significant increases in internal costs necessary to capture data, and collect and remit taxes. Any of these events could have an adverse effect on our business and operating results.

Changes in ICANN policies, fees, and oversight may impact our domain registration business.

ICANN oversees the domain name registration system and imposes fees on domain registrars. They operate as a private sector, not-for-profit entity but face ongoing public, governmental, and industry scrutiny regarding their governance, policies, and decision-making processes. Regulatory bodies, including the U.S. Congress and international authorities, periodically evaluate ICANN’s role, policies, and fee structures, which could lead to structural changes, increased regulation, or shifts in oversight. These changes may introduce uncertainty and potential instability in the domain registration market.

We face several risks related to ICANN’s oversight and evolving policies, including:

• Fee increases which could raise our costs or deter domain registrations.
• Changes to the Registrar Accreditation Agreement that could be disadvantageous or, in extreme cases, prevent us from operating as a registrar.
• Conflicts between ICANN policies and national laws, leading to compliance challenges or operational restrictions in certain jurisdictions.
• Legal or regulatory actions against ICANN, which could impact its authority and introduce uncertainty into the domain name system.
• International regulatory bodies, such as the International Telecommunication Union or the European Union, gaining greater influence over domain governance, potentially leading to new taxation, privacy, or competition regulations.

If any of these events occur, they could disrupt the stability of the domain registration market, increase our compliance costs, or reduce our ability to operate efficiently, negatively affecting our wholesale and retail domain businesses.

RISKS RELATED TO CAPITAL MARKETS

We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term shareholder value.

On February 12, 2026, our Board of Directors approved a stock repurchase program authorizing the Company to buy back up to $40 million of its common stock in the open market. The program commenced on February 13, 2026, and is expected to terminate on or before February 12, 2027.

While the Company has previously repurchased shares under similar programs, we are under no obligation to repurchase shares under this program, nor are we obligated to complete purchases up to the full authorized amount. The timing, quantity, and pricing of repurchases will depend on market conditions, available liquidity, and other strategic considerations, and the program may be modified, suspended, or discontinued at any time at the discretion of our Board.

Stock repurchase programs can impact our share price and market volatility, but there is no assurance that the repurchase program will enhance the long-term value of our stock or generate returns for shareholders.

RISKS RELATED TO ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) FACTORS

Energy consumption from data centers and internet infrastructure may result in higher costs and increased regulatory scrutiny.

Our operations rely on data centers, cloud computing resources, and domain registration infrastructure, all of which require significant energy consumption. As governments introduce carbon reduction policies and energy efficiency mandates, we may face higher electricity costs, increased environmental compliance requirements, and potential pressure from investors to adopt more sustainable energy practices. If we are unable to reduce our carbon footprint or comply with future environmental regulations, we could face reputational risks and higher operational costs.

Our business and financial performance could be adversely impacted by climate change, environmental disruptions, and other unforeseen disasters or crises.

Our business operations, financial condition, and results of operations could be negatively affected, directly or indirectly, by extreme weather events, environmental disasters, public health crises, and other large-scale disruptions. These events are inherently unpredictable and may impact us directly, by causing physical damage to infrastructure, disrupting service delivery, or increasing operational costs, or indirectly, by affecting customer demand, supply chain stability, or broader economic conditions.

As climate-related risks continue to evolve, our fiber network infrastructure, data centers, and operational facilities may be exposed to hurricanes, wildfires, floods, and other extreme weather events. Damage to physical assets may disrupt network services, increase maintenance and repair costs, and contribute to customer churn, which could impact revenue. Additionally, the cost of insurance, regulatory compliance, and infrastructure hardening may increase over time, potentially affecting our capital expenditure planning and overall profitability.

Our ability to mitigate the impact of such events depends on the effectiveness of our business continuity planning, network resilience strategies, and disaster recovery measures. However, unanticipated disruptions or insufficient preparedness by local, national, or international emergency responders, supply chain partners, or other key stakeholders could exacerbate the financial and operational consequences of such events.

Risk Management and Strategy

Our business heavily relies on various IT and application systems, which contain proprietary and confidential information about our operations, employees, customers, and our customers' customers, including personally identifiable information. These systems are connected to and/or accessed from the Internet and, as a result, are susceptible to cyber-attacks. We recognize the critical importance of maintaining the safety and security of our systems and data and have a holistic process for overseeing and managing cybersecurity and related risks. Our process is supported by both management and our Board of Directors. Organizationally, our businesses are structured as three operating and reportable segments: Ting, Wavelo and Tucows Domains. These segments are decentralized; management and cybersecurity resources are organized both at the parent company level and within each decentralized segment. Each segment has dedicated liaisons for cybersecurity, compliance, and risk management activities.

We maintain and continue to expand our investment in the development of our information security management system (“ISMS”). Our ISMS leverages a risk-based approach and is informed by industry standard guidance, including the National Institute of Standards and Technology, Cybersecurity Framework, and the International Organization for Standardization 27001 Information Security Management System Requirements. A material cyber-attack on Company systems, distribution partners and their key operating systems, or any other third-party partners or vendors and their key operating systems may interrupt the ability to operate the Company's business, damage the Company's reputation, or result in monetary damages. The development of the ISMS is focused on the protections of the confidentiality, integrity, and availability of the Company’s information system infrastructure as well as the data in the Company’s care, custody and control. The Company engages third parties to evaluate certain aspects of the ISMS, provide threat intelligence, and perform vulnerability assessments and other services as needed.

The Company follows an established process to identify and evaluate risks from cybersecurity threats that may arise internally or through the introduction of third parties to the ISMS. This evaluation is part of the Company's risk management process. The process may include, but is not limited to, evaluating the third party's cybersecurity maturity and/or imposing certain contractual conditions.

Operationally, the Company maintains Security and Network Operations Centers, which provide 24/7 coverage and support of on-call cybersecurity and network professionals to triage and respond to immediate cybersecurity threats and outages. The Company also assesses cybersecurity risks on a quarterly basis and ranks them according to their risk profile. These risks are communicated to management and to the Board of Directors as part of the normal course of operations.

Cybersecurity incidents are responded to in accordance with the Company’s established Cybersecurity Incident Response Plan (“IRP”). In the event of an incident, we follow our IRP, which includes evaluation of the severity of the incident based on factors such as the number of assets affected, the extent of the incident, the likelihood of inappropriate data exposure, operational impact and/or reliability impact. Depending upon the severity of an incident, the incident is escalated to the senior leadership, including the CEO. Senior leadership then determines whether, based on various factors, the incident requires immediate escalation to the Board of Directors and to third-party incident response organizations and notification to functional areas, such as legal and finance, as well internal stakeholders, and external entities, as appropriate and required. We maintain relationships with third-party Digital Forensics and Incident Response (“DFIR”) service providers to strengthen our incident response capabilities in the event that we determine the need to augment our effort during an incident and to provide us additional assurance that our responses to complex incidents or highly sophisticated threat actors have been effective and complete.

Although the risks from cyber threats have not materially affected our business strategy, results of operations, or financial condition to date, they may in the future and we continue to closely monitor cyber risk. For a detailed description of the risks related to cybersecurity, see Item 1A. “Risk Factors.” of this Annual Report, which should be read in conjunction with this Item 1C.

Board Governance and Management

The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Senior leadership manages our overall information security strategy, policy, security engineering, operations and cyber threat detection and response. The corporate information security function is responsible for managing and continually enhancing our information security posture and information security infrastructure with the ultimate goal of preventing cybersecurity incidents and reducing their severity to the extent feasible, while simultaneously increasing our resilience in an effort to minimize the business impact should an incident occur.

Senior leadership, including our CEO, who also has relevant experience in cybersecurity matters, regularly brief the Board of Directors on our cybersecurity and information security initiatives, and the Board of Directors is apprised of cybersecurity incidents deemed to have a material business impact.

Our principal administrative, engineering, marketing and sales office is located in Toronto, Canada, and consists of approximately 27,000 square feet. We lease satellite offices in various cities across the U.S. as well as internationally in Germany and Denmark. The Toronto, Canada office supports all of our segments. Leased satellite offices across the U.S. support the Ting segment, while European offices support Tucows Domains.

The Company has acquired real property in Centennial, Colorado where it has constructed an office, warehouse and data center to support our local logistical operations and our North American colocation needs.

Currently, substantially all of our computer and communications hardware is located at our facilities or at server hosting facilities in Toronto, Ontario; San Jose, California; Centennial, Colorado; Ashburn, Virginia; Charlottesville, Virginia; Durango, Colorado; and Moncure, North Carolina.

Recent Sales of Unregistered Securities

None.

We are involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, individually or in the aggregate, in our opinion, will materially harm our business. We cannot assure you that we will prevail in any litigation. Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of management attention.

In addition, pursuant to Item 103(c)(3)(iii) of Regulation S-K under the Exchange Act, the Company is required to disclose certain information about environmental proceedings to which governmental authority is a party if the Company reasonably believes such proceedings may result in monetary sanctions, exclusive of interest and costs, above a stated threshold. The Company has elected to apply a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.

OVERVIEW

Our mission is to provide simple useful services that help people unlock the power of the Internet.

We accomplish this by reducing the complexity of our customers’ experience as they access the Internet (at home or on the go) and while using Internet services such as domain name registration, email and other Internet related services. We are organized into three operating and reporting segments - Ting, Wavelo, and Tucows Domains. Each segment is differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. The Ting segment contains the operating results of our retail high speed Internet access operations, including its wholly owned subsidiaries - Cedar and Simply Bits. The Wavelo segment includes our platform and professional services offerings, as well as billing solutions to ISPs. Tucows Domains includes wholesale and retail domain name registration services, as well as value-added services derived through our OpenSRS, Enom, Ascio, EPAG, and Hover brands.

Our CEO, who is also our chief operating decision maker, reviews the operating results of Ting, Wavelo and Tucows Domains as three distinct segments in order to make key decisions and evaluate segment performance. Certain revenues and expenses disclosed under the Corporate category are excluded from segment results as they are centrally managed and not monitored by or reported to our CEO by segment. The exclusions include: retail mobile services, the 10-year payment stream on transferred legacy Mobile subscribers, eliminations of intercompany transactions, portions of Finance and Human Resources, Legal and Corporate IT shared services.

For the years ended December 31, 2025, 2024 and 2023, we reported revenue of $390 million, $362 million and $339 million, respectively.

Ting

Ting and its wholly owned subsidiaries, Cedar and Simply Bits, includes the provision of high-speed Internet access services to select towns throughout the United States, with operations focused on serving existing markets. Our primary sales channel is through the Ting website. The primary focus of this segment is to provide reliable Gigabit Fiber and Fixed Wireless Internet services to consumer and business customers. Revenues from Ting Internet are all generated in the U.S. and are billed on a monthly basis. Generally, Ting internet services have no fixed contract terms, aside from certain non-standard bespoke with business customers.

As of December 31, 2025, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 109,000 partner infrastructure serviceable addresses and 54,000 active accounts under its management; compared to having access to 134,000 owned infrastructure serviceable addresses, 45,000 partner infrastructure serviceable addresses and 51,000 active accounts under its management as of December 31, 2024. These figures exclude any changes in serviceable addresses and accounts attributable to the Simply Bits acquisition

On February 7, 2024 Ting committed to a workforce reduction (the "February 2024 Workforce Reduction"), as defined in "Note 21. Restructuring Costs" to the Consolidated Financial Statements, which aimed to realign the Company's operational structure within the Ting operating segment and reduce Ting's workforce by 13%, or 7% of the Company’s total workforce, to better support strategic objectives. The February 2024 Workforce Reduction was designed to streamline operations and reduce operating expenses within the Ting operating segment. Substantially all of the employees impacted by the workforce reduction were notified on February 7, 2024 and have since exited the Company. The Company incurred non-recurring charges of approximately $3.2 million in the first quarter of Fiscal 2024, in connection with the workforce reduction, primarily consisting of severance payments, notice pay, employee benefits contributions, and outplacement costs.

On October 30, 2024, Ting undertook the 2024 Capital Efficiency Plan, as defined in "Note 21. Restructuring Costs" to the Consolidated Financial Statements, to reflect the ongoing operational and financial prioritization of the Ting business and to lower the Company's year-over-year operating expenses and capital outlays, which impacted approximately 42% of Ting's workforce, or 17% of the Company's total workforce. The Company incurred non-recurring charges of approximately $7.7 million in the fourth quarter of Fiscal 2024 in connection with the 2024 Capital Efficiency Plan, primarily consisting of severance payments, notice pay, employee benefits contributions, and outplacement costs.

The February 2024 Workforce Reduction and 2024 Capital Efficiency Plan realized personnel and related expense (net of capitalization) savings with the majority of the savings in sales and marketing, including related network support functions, followed by smaller impacts in technical operations and development, direct cost of revenues, network, general and administrative, and other costs. In Fiscal 2024, the realized savings were partially offset by costs associated with both plans. These costs referenced above are classified as transitional and were excluded in our Adjusted EBITDA, which is a non-United States Generally Accepted Accounting Principles ("GAAP") financial measure. Please see discussion of Adjusted EBITDA as well as the Adjusted EBITDA reconciliation to net income in the Results of Operations section below. The 2024 Capital Efficiency Plan has also translated into reduced capital expenditures related to growth and expansion of new markets, as Ting shifted to focus on completing builds in existing markets.

The Company announced on November 6, 2025 that it commenced a process to review strategic alternatives for the Ting business, to address its ongoing liquidity requirements. The process is ongoing and the outcome and timing of this process are uncertain and may materially affect future revenues, operating costs and capital expenditures. If the strategic process does not result in a successful transaction, or if it is delayed or abandoned, Ting would be required to implement significant operational changes to preserve liquidity and continue as a going concern, which could include more substantial reductions in operating expenses, changes in market expansion plans, asset sales, or other restructuring actions. As a result, Ting’s future revenue growth, cost structure and overall financial performance may differ materially from current results and expectations.

Wavelo

Wavelo includes the provision of full-service platforms and professional services providing a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools. Wavelo's focus is to provide accessible telecom software to CSPs globally, minimizing network and technical barriers and improving internet access worldwide. Wavelo's suite of flexible, cloud-based software simplifies the management of mobile and internet network access, enabling CSPs to better utilize their existing infrastructure, focus on customer experience and scale their businesses faster. Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform and Ting integrating Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. The Wavelo segment also includes the Platypus brand and platform, our legacy billing solution for ISPs. The revenues from Wavelo's platforms and professional services are all generated in the U.S. and our customer agreements have set contract lengths with the underlying CSP. Similarly, Wavelo's revenues from Platypus are largely generated in the U.S., with a small portion earned in Canada and other countries.

Tucows Domains

Tucows Domains includes wholesale and retail domain name registration services, as well as value-added services derived through our OpenSRS, Enom, Ascio, EPAG and Hover brands. Tucows Domains generates revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations. In addition, we earn revenues from the sale of retail domain name registration and email services to individuals and small businesses. Tucows Domains revenues are attributed to the country in which the contract originates, which is primarily in Canada and the U.S for OpenSRS and Enom brands whereas it is primarily in European nations for Ascio and EPAG.

Our primary distribution channel is a global network of more than 32,000 resellers that operate in approximately 200 countries and who typically provide their customers, the end-users of Internet-based services, with solutions for establishing and maintaining an online presence. Our primary focus is serving the needs of this network of resellers by providing the broadest portfolio of gTLD and country code top-level domain options and related services, a white-label platform that facilitates the provisioning and management of domain names, a powerful Application Program Interface, easy-to-use interfaces, comprehensive management and reporting tools, and proactive and attentive customer service. Our services are integral to the solutions that our resellers deliver to their customers. We provide “second tier” support to our resellers by email, chat and phone in the event resellers experience issues or problems with our services. In addition, our Network Operating Center proactively monitors all services and network infrastructure to address deficiencies before customer services are impacted.

We believe that the underlying platforms for our services are among the most mature, reliable and functional reseller-oriented provisioning and management platforms in our industry, and we continue to refine, evolve and improve these services for both resellers and end-users. Our business model is characterized primarily by non-refundable, up-front payments, which lead to recurring revenue from renewals and positive operating cash flow.

Wholesale, primarily branded as OpenSRS, Enom, EPAG and Ascio, derives revenue from its domain name registration service. Together the OpenSRS, Enom, EPAG and Ascio Domain Services manage 21.5 million domain names under the Tucows, Enom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management have decreased by 3.0 million, or 12%, since December 31, 2024.

Value-Added Services include hosted email which provides email delivery and webmail access to millions of mailboxes, Internet security services, WHOIS privacy other value-added services. All of these services are made available to end-users through a network of web hosts, ISPs, and other resellers around the world. In addition, we also derive revenue by monetizing domain names which are near the end of their lifecycle through expiry auction sale.

Retail, primarily Hover, derives revenues from the sale of domain name registration and email services to individuals and small businesses. Our retail domain services also include our Personal Names Service – based on over 34,000 surname domains – that allows roughly two-thirds of Americans to purchase an email address based on their last name. The retail segment now includes the sale of the rights to its portfolio of surname domains used in connection with our RealNames email service and our Exact Hosting Service, that provides Linux hosting services for individual and small business websites.

KEY BUSINESS METRICS AND NON-GAAP FINANCIAL MEASURES

We regularly review a number of business metrics, including the following key metrics and non-GAAP financial measure, to assist us in evaluating our business, measure the performance of our business model, identify trends impacting our business, determine resource allocations, formulate financial projections and make strategic business decisions. The following tables set forth the key business metrics which we believe are the primary indicators of our performance for the periods presented:

(1) Defined as premises to which Ting has the capability to provide a customer connection in a service area.

(1) For a discussion of these period-to-period changes in the domains provisioned and domains under management and how they impacted our financial results see the Net Revenues discussion below.

Tucows reports all financial information in accordance with GAAP. Along with this information, to assist financial statement users in an assessment of our historical performance, we typically disclose and discuss a non-GAAP financial measure, Adjusted EBITDA, on investor conference calls and related events that excludes certain non-cash and other charges, as we believe that the non-GAAP information enhances investors’ overall understanding of our financial performance, but should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. Please see discussion of Adjusted EBITDA as well as the Adjusted EBITDA reconciliation to net income in the Results of Operations section below.

OPPORTUNITIES, CHALLENGES AND RISKS

Our revenue is primarily realized in U.S. dollars and a major portion of our operating expenses are paid in Canadian dollars. Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar may have a material effect on our business, financial condition and results from operations. In particular, we may be adversely affected by a significant weakening of the U.S. dollar against the Canadian dollar on a quarterly and an annual basis. Our policy with respect to foreign currency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some or all of the impact of foreign currency exchange movements by entering into foreign exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We may not always enter into such forward contracts and such contracts may not always be available and economical for us. Additionally, the forward rates established by the contracts may be less advantageous than the market rate upon settlement.

Ting

As an ISP, we have invested and expect to continue to invest in selective fiber to the home (“FTTH”) deployments in select markets in the United States. The investments are a reflection of our ongoing efforts to build FTTH network via strategic partnerships in communities we identify as having strong, unmet demand for FTTH services. Given the significant upfront build and operational investments for these FTTH deployments, there is risk that we may not fully recover these investments as a result of future technological and regulatory changes, competitive responses from incumbent local providers, and slower than expected market penetration or otherwise.

Wavelo

Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform. More recently, Ting Internet has also integrated Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. With our external platform and professional services revenues concentrated to one customer in EchoStar, we are exposed to significant risk if we are unable to maintain this customer relationship or establish new relationships for any of our Platforms in the future. Additionally, our revenues as a platform provider are directly tied to the subscriber volumes of EchoStar's MVNO or MNO networks, and our profitability is contingent on the ability of EchoStar to continue to add subscribers, either from organic growth or from migration off legacy systems, onto our platforms.

Domain Services

The increased competition in the market for Internet services in recent years, which we expect will continue to intensify in the short and long term, poses a material risk for us. As new registrars are introduced, existing competitors expand service offerings and competitors offer price discounts to gain market share, we face pricing pressure, which can adversely impact our revenues and profitability. To address these risks, we have focused on leveraging the scalability of our infrastructure and our ability to provide proactive and attentive customer service to aggressively compete to attract new customers and to maintain existing customers.

Substantially all of our Tucows Domains revenue is derived from domain name registrations and related value-added services from wholesale and retail customers using our provisioning and management platforms. The market for wholesale registrar services is both price sensitive and competitive and is evolving with the introduction of new gTLDs, particularly for large volume customers, such as large web hosting companies and owners of large portfolios of domain names. We have a relatively limited ability to increase the pricing of domain name registrations without negatively impacting our ability to maintain or grow our customer base. Growth in our Tucows Domains revenue is dependent upon our ability to continue to attract and retain customers by maintaining consistent domain name registration, retaining high margin customers, value-added service renewal rates and upselling, and to grow our customer relationships through refining, evolving and improving our provisioning platforms and customer service for both resellers and end-users. In addition, Tucows Domains also generates revenues through the sale of names from our portfolio of domain names and through the OpenSRS, Enom, and Ascio Domain Expiry Streams. Our domains under management and transactions saw a moderate decrease in Fiscal 2025, largely as a result of select, low margin customers taking their business in-house. These fluctuations occur occasionally in our business, and with broad, diverse and global nature of our reseller base ensures that margin remains healthy, and will be augmented by the strategies discussed above to continue to grow our revenue base.

From time-to-time, certain vendors provide us with market development funds to expand or maintain the market position for their services. Any decision by these vendors to cancel or amend these programs for any reason may result in expenses in future periods not being commensurate with what we have achieved during past periods.

Other opportunities, challenges and risks

The Company is entitled to a long-term payment stream that is a function of the margin generated by the transferred subscribers over the 10-year term of the EchoStar Purchase Agreement executed in the Fiscal 2020. This consideration structure may not prove to be successful or profitable in the long-term to us if the existing subscriber base churns at an above average rate. Additionally, given EchoStar controls the revenues and costs incurred associated with the acquired subscribers, there could arise a situation where profitability for the subscriber base is diminished either by lower price points or cost inflation. Additionally, as part of the EchoStar Purchase Agreement, the Company retained a small number of customer accounts associated with one MNO agreement that was not reassigned to EchoStar at time of sale. We continue to be subject to the minimum revenue commitments previously agreed to with this excluded MNO agreement. The Company is able to continue adding customers under the excluded MNO network in order to meet the commitment. However, with no direct ability to change customer pricing and limited ability to renegotiate contract costs or significant terms, the Company may be unable to meet the minimum commitments with this MNO partner and could incur significant and recurring penalties until such a time that the contract is complete. These penalties would negatively impact our operational performance and financial results if enforced by the MNO. As of December 31, 2025, the Company accrue d $3.9 million of penalties associated with the minimum commitment shortfall. The Company expects to incur penalties through January 2026, at which point the initial term of the contract is complete.

The contract will automatically continue month-to-month thereafter, with no expected penalties in the month-to-month arrangement. Should we continue to be bound by any minimum purchase commitments in excess of our customer-based usage, our cost of revenue may increase, negatively impacting financial results.

As discussed above, the Company announced on November 6, 2025 that it commenced a process to review strategic alternatives for the Ting business, to address its ongoing liquidity requirements. The outcome and timing of this process are uncertain and may materially affect future revenues, operating costs and capital expenditures. As a result, Ting’s future revenue growth, cost structure and overall financial performance may differ materially from current results and expectations.

An in-depth assessment of the risk factors impacting our businesses has been discussed at length above in Part I under the caption "Item 1A Risk Factors" in this Annual Report.

Critical Accounting Estimates

The following is a discussion of our critical accounting estimates. Critical accounting estimates are defined as those that are both important to the portrayal of our financial condition and results of operations and are reflective of significant judgments and uncertainties made by management that may result in materially different results under different assumptions and conditions. “Note 2. Significant Accounting Policies” to the Consolidated Financial Statements for Fiscal 2025, includes further information on the significant accounting policies and methods used in the preparation of our Consolidated Financial Statements.

The preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience, available market information as applicable, and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Under different assumptions or conditions, the actual results will differ, potentially materially, from those previously estimated. Many of the conditions impacting these assumptions and estimates are outside of the Company’s control. Management evaluates its estimates on an ongoing basis.

Acquired customer relationships

For acquired customer relationships, the Company estimates the fair value based on the income approach. The income approach is a valuation technique that calculates the fair value of an intangible asset based on the present value of future cash flows expected to be generated over the remaining useful life of the asset. This valuation involves significant subjectivity and estimation uncertainty, including assumptions related to future revenues attributable to acquired customer relationships, attrition rates and discount rates.

Loss contingencies

We are sometimes subject to claims, suits, regulatory and government investigations, and other proceedings involving competition, intellectual property, privacy, tax and related compliance, labor and employment, commercial disputes, and other matters. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated.

We evaluate, on a regular basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both the likelihood and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material.

Impairment of goodwill

Goodwill is tested at least annually for impairment at an operating segment level, which the Company has assessed to be our reporting units. At December 31, 2025 and December 31, 2024, we had $130.4 million in goodwill, of which $107.7 million (83%) related to Tucows Domains and $22.7 million (17%) related to Ting.

We first assess qualitative factors to determine whether it is more-likely-than-not that goodwill is impaired, and if so, we perform the quantitative goodwill impairment test.

When performing a qualitative analysis, we evaluate factors such as macro-economic, industry and market conditions including the capital markets, the competitive environment, in addition to other internal factors including changes to our market capitalization, cash inflows, obligations and access to capital of our segments. Any changes to these factors could change our assessment of whether it is more-likely-than-not that goodwill is impaired and necessitate the quantitative analysis outlined below, and hence, result in a potential impairment charge. In addition, changes in our organizational structure or how our management allocates resources and assesses performance, could result in a change in our operating segments, requiring a reallocation of goodwill and an updated impairment analysis.

If a quantitative impairment test is required, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeded its fair value, we would recognize an impairment loss in an amount equal to that excess, limited to the total amount of goodwill. For the year ended December 31, 2025, a quantitative impairment test was required for Ting, but this did not result in the recognition of any goodwill impairment.

In performing the quantitative impairment test for Ting, we primarily used the income approach to determine fair value, in which future expected cash flows at the operating segment level are converted to present value using factors that consider the timing and risk of the future cash flows. Key assumptions in the income approach included the timing and amount of future cash flows, terminal value growth rates, terminal value margin rates, market participant assumptions, benchmarks and discount rates. Changes to any of these assumptions could result in a different fair value estimate, and hence result in an impairment.

Impairment of long-lived assets

We review the carrying values of long-lived assets, such as property and equipment, finite-life intangible assets and right of use lease assets, for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment testing is performed at the asset group level, unless an asset generates independent cash flows or if the Company has determined the asset will be disposed of by abandonment in which case the impairment analysis is performed at the asset level. Our asset groups are equivalent to our operating segments, Tucows Domains, Ting and Wavelo.

We first perform a qualitative assessment to determine whether events or circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. This assessment evaluates market prices, changes in the use or physical condition of the asset, changes in legal factors or the business climate, financial performance and costs incurred, forecasts and any expectation of disposals of the asset or asset group. Any changes to these factors could change our assessment of whether the carrying amount is recoverable, and necessitate the quantitative analysis outlined below, and hence, result in a potential impairment charge.

If events or circumstances indicate that the carrying amount of the asset or asset group may not be not recoverable, the Company compares the carrying amount of the asset group to the undiscounted cash flows expected to be generated over its remaining useful life. If the carrying amount exceeds the undiscounted future cash flows, the relevant asset group is considered to be impaired, and an impairment loss is recognized in the amount by which the carrying value of the asset group exceeds fair value. For the year ended December 31, 2025, this recoverability test was required for Ting, but this test did not result in the recognition of any long-lived asset impairment.

Assumptions used in estimating the undiscounted cash flows of Ting include the timing and amount of future cash flows and the useful lives of the property and equipment. Any changes to these factors could change our assessment of the recoverability of the Ting long-lived assets, and hence result in an additional potential impairment charge.

Further, the Company determined certain long-lived assets would be disposed of by abandonment. Management estimated the salvage value and recorded an impairment loss representing the difference between the carrying amount and salvage value of the assets. During the year ended December 31,2025, the Company recorded an impairment loss of $10.7 million primarily related to abandoned materials and supplies held for capital projects, as well as impairment of right-of-use operating lease assets. During the year ended December 31, 2024, the Company recorded an impairment loss of $17.7 million related to assets under construction and materials and supplies held for capital projects. The salvage value was estimated based on management’s judgment regarding realizability in secondary markets. Management based its estimates on historical experience, available market information as applicable, third party analysis and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Changes to any of these assumptions could result in a different fair value estimate, and hence result in further impairment losses.

Accounting for Income Taxes

We operate in various tax jurisdictions, and accordingly, our income is subject to varying tax rates. Losses incurred in one jurisdiction cannot be used to offset taxable income in another jurisdiction. Our ability to use income tax loss carryforwards and future income tax deductions is dependent upon our operations in the tax jurisdictions in which such losses or deductions arise. Significant judgment is required in determining our provision for income taxes and evaluating our uncertain tax positions.

We account for income taxes under the asset and liability method, which recognizes the deferred tax assets or liabilities for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of our assets and liabilities. Valuation allowances are established to reduce deferred tax assets when it is more likely than not that the tax benefit from the deferred tax assets will not be realized. In assessing the need for valuation allowances, historical and future levels of income, expectations and risks associated with estimates of future taxable income and tax planning strategies are considered. As of December 31, 2025, the valuation allowance of $68.1 million was recorded, for those deferred tax assets where it is more likely than not that the tax benefit will not be realized.

We apply a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if, on the weight of available evidence, it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit that is more than 50% likely to be realized upon settlement. As of December 31, 2025, we recognized uncertain tax provisions of $0.1 million within the provision for income taxes.

See "Note 9. Income Taxes" to the Consolidated Financial Statements for further information regarding income taxes.

Changes in estimates

There were no material changes to our critical accounting estimates during Fiscal 2025.

Recently Issued Accounting Standards

See “Note 2. Significant Accounting Policies” of the Notes to the Consolidated Financial Statements for information regarding recently issued accounting standards.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2025 AS COMPARED TO THE YEAR ENDED DECEMBER 31, 2024

For additional information on our financial condition as of December 31, 2024 and results of operations, liquidity and capital resources for the year ended December 31, 2024 as compared to the year ended December 31, 2023, refer to Part II, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on 10-K for the year ended December 31, 2024 which was filed with the United States Securities and Exchange Commission on March 13, 2025.

NET REVENUES

Ting

Ting and its subsidiaries, Cedar, and Simply Bits, includes the provision of high-speed Internet access services to select towns throughout the United States. Our primary sales channel is through the Ting website. The primary focus of this segment is to provide reliable Gigabit Fiber and Fixed Wireless Internet services to consumer and business customers. Generally, Ting Internet services have no fixed contract terms, aside from certain bespoke contracts with business customers.

The Company's billing cycle for all Ting Internet customers is computed based on the customer's activation date. Since consideration is collected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access within each reporting period. Incentive marketing credits given to customers are recorded as a reduction of revenue.

Our construction services are earned to revenue earned from the design, construction and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed.

Revenue from network construction is recognized over time, as Ting’s performance creates or enhances an asset that the customer controls as it is being constructed. Progress toward completion is measured using an output method, based primarily on network build milestones such as served addresses completed and accepted by the customer. Amounts billed in advance of revenue recognition are recorded as contract liabilities, while amounts recognized in excess of billings are recorded as contract assets. Where services require installation, revenue is not recognized until a customer's service is activated.

The Company records a reduction of revenues that reflects expected refunds, rebates and credit card charge-backs at the time of the sale based on historical experiences and current expectations.

Wavelo

Platform Services

Tucows' Platform Services include the following full-service platforms from Wavelo, including MONOS, ISOS, SM and our legacy Platypus ISP Billing software. Under each of these platforms there are a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools. Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform. More recently, Ting Internet has also integrated Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. Wavelo's customers are billed monthly, on a postpaid basis. The monthly fees are variable, based on the volume of our customers' subscribers utilizing the platform during a given month, to which minimums may apply. Customers may also be billed fixed platform fees and granted fixed credits as part of the consideration for long-term contracts. Consideration received is allocated to platform services and bundled professional services and recognized as each service obligation is fulfilled. Any fixed fees for Wavelo are recognized into revenue evenly over the service period, while variable usage fees are recognized each month as they are consumed. Professional services revenue is recognized as the hours of professional services granted to the customer are used or expire. When consideration for these platform services is received before the service is delivered, the revenue is initially deferred and recognized only as the Company performs its obligation to provide services. Likewise, if platform services are delivered before the Company has the unconditional right to invoice the customer, revenue is recognized as a Contract Asset.

Other Professional Services

This revenue stream includes any other professional services earned in connection with the Wavelo business from the provision of standalone technology services development work. These are billed based on separate Statement of Work arrangements for bespoke feature development. The Company recognizes revenue at the point-in-time when the final acceptance criteria have been met.

Tucows Domains

Wholesale - Domain Services

Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new, renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period. Although fees are collected upfront, revenue from domain registrations is recognized ratably over the registration period as the Company provides the customer with a domain registration service, which represents a distinct performance obligation satisfied over time. The registration period begins once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.

Historically, our wholesale domain service has constituted the largest portion of our business and encompasses all of our services as an accredited registrar related to the registration, renewal, transfer and management of domain names. In addition, this service fuels other revenue categories as it often is the initial service for which a reseller will engage us, enabling us to follow on with other services and allowing us to add to our portfolio by purchasing names registered through us upon their expiration. We expect Domain services will continue to be the largest portion of our business and will continue to enable us to sell add-on services.

The Company is an ICANN accredited registrar. Thus, the Company is the primary obligor with our reseller and retail registrant customers and is responsible for the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retail registrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to those customers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.

Wholesale – Value-Added Services

We derive revenue from domain related value-added services like digital certifications, WHOIS privacy and hosted email and by providing our resellers and retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain-related value-added services are considered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain-related value-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction of the performance obligations.

We also derive revenue from other value-added services, which primarily consists of proceeds from storefront and domain expiry streams.

Retail

We derive revenues mainly from Hover's retail properties through the sale of retail domain name registration and email services to individuals and small businesses. The retail segment includes the sale of the rights to its portfolio of surname domains used in connection with our RealNames email service and Linux hosting services for websites through our Exact Hosting brand.

Corporate and all other - Mobile services and eliminations

Although we still provide mobile telephony services to a small subset of customers retained through the Ting Mobile brand as part of the EchoStar Purchase Agreement executed in Fiscal 2020, this revenue stream no longer represents the Company's strategic focus going forward. Instead we have transitioned towards being a platform provider for CSPs globally via Wavelo. Retail telephony and transition services are not part of our reportable segments under ASC 280 Segment Reporting "ASC 280") and their results are presented as part of the All Other category.

Ting Mobile wireless usage contracts grant customers access to standard talk, text and data mobile services. Ting Mobile contracts are billed based on the customer's selected rate plan, which can either be usage-based or an unlimited plan. All rate plan options are charged to customers on a postpaid, monthly basis at the end of their billing cycle. All future revenues associated with the retail mobile services stream will only be for this subset of customers retained by the Company, as mentioned above. Ting Mobile services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following each customer's monthly billing cycle. The Company's billing cycle for all Ting Mobile customers is computed based on the customer's activation date. In order to recognize revenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed from the end of each billing cycle to the end of each reporting period. In addition, revenues associated with the sale of wireless devices and accessories are recognized when title and risk of loss is transferred to the customer and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.

These mobile services revenue streams also include transitional services provided to EchoStar. These are billed monthly at set and established rates for services provided in period and include the provision of sales, marketing, order fulfillment, and data analytics related to the legacy customer base sold to EchoStar. The Company recognizes revenue as the Company satisfies its obligations to provide transitional services.

As a form of consideration for the sale of the customer relationships, the Company receives a payout on the margin associated with the legacy customer base sold to EchoStar, over a period of 10 years. This has been classified as Other Income and not considered revenue in Fiscal 2024 or 2025.

The following table presents our net revenues, by revenue source:

(Dollar amounts in thousands of U.S. dollars)

*Corporate and all other includes revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.

The following table presents our net revenues, by revenue source, as a percentage of total net revenues:

*Corporate and all other includes revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.

Total net revenues for Fiscal 2025 increased by $28.0 million, or 8%, to $390.3 million compared to Fiscal 2024. The increase in net revenue was driven by revenues from Tucows Domains, Ting, and Wavelo; partially offset by a decline in revenues from Mobile Services and eliminations. The Tucows Domains segment increased $12.5 million in the current period primarily driven by passthrough pricing increases and strong expiry auction revenue performance. The Ting segment increased $8.5 million in the current period as a result of subscriber growth on our Fiber network across the United States. The Wavelo segment increased $7.8 million in the current period primarily driven by rate increases and subscriber growth. Mobile Services and eliminations decreased by $0.7 million attributable to increased intersegment revenues.

Contract liabilities at December 31, 2025 decreased by $3.9 million to $152.9 million from $156.8 million at December 31, 2024. The decrease was driven primarily by lower billings in Tucows Domains due to a decrease in domain names under management, and furthered by a small decrease in Wavelo as bundled professional services available in select customer contracts expired and were recognized into revenue. This was partially offset by an increase in Ting Internet with new construction in Laguna Woods Village, California, United States.

A customer, EchoStar, within our Wavelo segment accounted for 11.7% of total net revenue during the year ended December 31, 2025 and 10.7% of total net revenue during the year ended December 31, 2024. EchoStar accounted for 44% of total accounts receivable at December 31, 2025 and 56% of total accounts receivable at December 31, 2024. Though a significant portion of the Company’s domain services revenues are prepaid by our customers, where the Company does collect receivables, management judgment is required at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing basis, we assess the ability of our customers to make required payments. Our expected credit losses were $1.3 million and $0.9 million as of December 31, 2025 and at December 31, 2024, respectively. Based on this assessment, we expect the carrying amount of our outstanding receivables, net of expected credit losses, to be fully collected.

Ting

Ting generated $68.2 million in net revenue during Fiscal 2025, which increased by $8.5 million or 14% compared to Fiscal 2024. This growth is driven by continued subscriber growth across our Fiber network and small increases in average revenue per user ("ARPU") relative to Fiscal 2024, the continued growth of available serviceable addresses in Ting towns throughout the United States, and new construction in the Laguna Woods Village, California, United States.

As of December 31, 2025, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 109,000 partner infrastructure serviceable addresses and 54,000 active accounts under its management; compared to having access to 134,000 owned infrastructure serviceable addresses, 45,000 partner infrastructure serviceable addresses and 51,000 active accounts under its management as of December 31, 2024. These figures exclude any changes in serviceable addresses and accounts attributable to Simply Bits.

Wavelo

Platform Services

Wavelo's Platform services generated $47.6 million in net revenue during Fiscal 2025, which increased by $7.8 million or 19.6% compared to Fiscal 2024. The increase in Fiscal 2025 net revenue is driven primarily by incremental revenues from existing customers, EchoStar following contract renewal, Ting subscriber growth, as well as new customers. Wavelo revenues continue to benefit from our customers' own subscriber growth. Intersegment revenues earned by Wavelo for provision of services on the Wavelo platforms for Ting and Mobile Services are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and all other - Mobile services and eliminations.

Other Professional Services

Wavelo's Other Professional Services net revenue decreased from less than $0.1 million in Fiscal 2024 to NIL million in Fiscal 2025. These revenues related to the provision of standalone technology services development for our CSP customers and are non-recurring and often one-time in nature, and accordingly can fluctuate period over period. These revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers.

Tucows Domains

Wholesale - Domain Services

Wholesale Tucows Domains generated $204.2 million in net revenue during Fiscal 2025, which increased by $7.0 million or 4% compared to Fiscal 2024. Increases from Wholesale domain registrations were driven by various passthrough price increases from select registry cost increases since Fiscal 2024, as well as increased recognition of revenue previously deferred, offsetting the lower billings from the decrease in domain names under management.

Together, the OpenSRS, Enom, EPAG and Ascio Domain Services manage 21.5 million domain names under the Tucows, Enom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management has decreased by 3.0 million domain names, or 12%, since December 31, 2024, driven by some resellers migrating management of their domains in-house.

Wholesale - Value-Added Services

Wholesale value-added services generated $24.0 million in net revenue during Fiscal 2025, which increased by $4.2 million or 21% compared to Fiscal 2024. The increase in value-added service revenue was driven by strong expiry auction sales, slightly offset by a small decrease in certificates sales.

Retail

Retail domain services generated $38.9 million in net revenue during Fiscal 2025, which increased by $1.3 million or 3% compared to Fiscal 2024. The increase in retail revenue was primarily driven by passthrough price increases across domain name registrations and RealNames products in Fiscal 2025.

Corporate and all other - Mobile services and eliminations

Mobile Services and eliminations generated $7.4 million in net revenue during Fiscal 2025, which decreased by $0.7 million or 9% compared to Fiscal 2024. The decrease was driven by an increase in intersegment corporate eliminations of $0.6 million, primarily as a result of increased revenues associated with platform billing between Wavelo and Ting as well as Wavelo and Mobile Services. This was furthered by a decrease of less than $0.1 million associated with the mobile telephony services and device revenues from the small group of customers retained by the Company as part of the EchoStar Purchase Agreement. This decrease was primarily a result of the limited subscriber growth and plan mix shifting towards lower price point rate plans compared to Fiscal 2024.

COST OF REVENUES

Ting

Cost of revenues primarily includes the costs for provisioning high speed Internet access for Ting and its subsidiaries, Cedar and Simply Bits, which is comprised of network access fees paid to third-parties to use their network, leased circuit costs to directly support enterprise customers, the personnel and related expenses (excluding costs eligible for capitalization) for the physical planning, design, construction and build out of the physical Fiber network, as well as personnel and related expenses (excluding costs eligible for capitalization) for the installation, activation, repair, maintenance and overall field service delivery of the Ting business. Other costs include field vehicle expenses, and small sundry equipment and supplies consumed in building the Fiber network.

Cost of revenues for construction services relate to costs for the design, construction and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed.

Wavelo

Platform Services

Cost of revenues to provide the MONOS, ISOS and SM platforms, as well as our legacy Platypus ISP Billing software services including network access, provisioning and billing services for CSPs. This includes the amortization of any capitalized contract fulfillment costs over the period consistent with the pattern of transferring network access, provisioning and billing services to which the cost relates. Additionally, this includes any costs paid to third-party public cloud hosting or other service providers for customer specific platform deployment or delivery costs.

Other Professional Services

Cost of revenues to provide standalone technology services development work to our CSP customers to help support their businesses. This includes any personnel and contractor fees for any client service resources retained by the Company. Only a subset of the Company's employee base provides professional services to our customers. This cost reflects that group of resources.

Tucows Domains

Wholesale - Domain Services

Cost of revenues for domain registrations represents the amortization of registry and accreditation fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are initially recorded as prepaid domain registry fees. This accounting treatment reasonably approximates a recognition pattern that corresponds with the provision of the services during the period. Market development fund rebates, provided by registries as incentives for certain top-level domains, are reflected as a reduction to cost of goods sold in the month they are received.

Wholesale - Value-Added Services

Costs of revenues for value-added services include licensing and royalty costs related to the provisioning of certain components for hosted email and fees paid to third-party hosting services. Fees payable for trust certificates are amortized on a basis consistent with the provision of service, generally one year, while email hosting fees and monthly printing fees are included in cost of revenues in the month they are incurred.

Retail

Costs of revenues for our provision and management of Internet services through our retail site, Hover.com, include the amortization of registry fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are recorded as prepaid domain registry fees and are expensed ratably over the renewal term. Costs of revenues for our surname portfolio represent the amortization of registry fees for domains in our portfolio over the renewal period, which is generally one year, the value attributed under intangible assets to any domain name sold and any impairment charges that may arise from our assessment of our domain name intangible assets.

Corporate and all other - Mobile services and eliminations

Cost of revenues for retail mobile services includes the costs of provisioning mobile services, which is primarily our customers' voice, messaging, data usage provided by our MNO partner, and the costs of providing mobile phone hardware, which is the cost of mobile phone devices and SIM cards sold to our customers, order fulfillment related expenses, and inventory write-downs. Included in the costs of provisioning mobile services are any penalties associated with the minimum commitments with our MNO partner.

These mobile services costs also include the personnel and related costs of transitional services provided to EchoStar. These are billed monthly at set and established rates for services provided in period and include the provision of sales, marketing, customer support, order fulfillment, and data analytics related to the legacy customer base sold to EchoStar. The Company recognizes costs as the Company satisfies its obligations to provide professional services.

Network expenses

Network expenses include personnel and expenses related to platform and network site reliability engineering, network operations centers, IT infrastructure and supply chain teams that support our various business segments. It also includes the depreciation and any impairment charges of property and equipment related to our networks and platforms, amortization of any intangible assets related to our networks and platforms, communication and productivity tool costs, and equipment maintenance costs. Communication and productivity tool costs include collaboration, customer support, bandwidth, co-location and provisioning costs we incur to support the supply of all our services, across our segments.

The following table presents our cost of revenues, by revenue source:

(Dollar amounts in thousands of U.S. dollars)

*Corporate and all other includes cost of revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.

The following table presents our cost of revenues, as a percentage of total cost of revenues for the periods presented:

*Corporate and all other includes cost of revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.

Total cost of revenues for Fiscal 2025 increased by $17.1 million, or 6%, to $296.3 million, from $279.2 million in Fiscal 2024. The increase in cost of revenues was driven by increases across Ting, Tucows Domains, and Mobile Services and eliminations by $9.6 million, $5.9 million, and $5.5 million, respectively. The increase in Ting of $9.6 million was largely driven by a $3.0 million one-time Ting lease accounting adjustment, as well as lease accounting impacts of the Memphis network lease and construction contract costs in Laguna Woods Village, both of which are new in Fiscal 2025, and cost of revenues associated with growth in active subscribers. The increase in Tucows Domains of $5.9 million was primarily a result of cost increases from select registries through the current period. The increase in Mobile Services and eliminations of $5.5 million was primarily a result of escalating MNO minimums and plan mix changes in the current period. These increases were partially offset by decreases across Network Expenses and Wavelo of $3.7 million and $0.2 million, respectively. The decrease in Network Expenses of $3.7 million was primarily driven by decreased people costs following the February 2024 Workforce Reduction and 2024 Capital Efficiency Plan and other restructuring efforts, as well as a decrease in colocation fees following the closure of one colocation data center; partially offset by an increase in depreciation costs. The slight decrease in Wavelo of $0.2 million was primarily driven by the savings in customer-specific public cloud hosting costs; partially offset by recognition of labor costs to deliver bundled professional services with EchoStar.

Deferred costs of fulfillment as of December 31, 2025 decreased by $4.0 million, or 3%, to $113.0 million from $117.0 million at December 31, 2024. This decrease was driven by Tucows Domains with a decrease of $5.2 million from the decrease in current period billings as a result of a decrease in domain names under management, consistent with the decrease in contract liabilities discussed above. This decrease was partially offset by an increase in Ting of $1.2 million related to Laguna Woods Village, California, United States construction contract costs.

Ting

In Fiscal 2025, costs related to provisioning high speed Internet access for customers of Ting and its subsidiaries, Cedar and Simply Bits, increased by $9.6 million, or 51%, to $28.3 million as compared to $18.8 million during Fiscal 2024. This increase was primarily driven by a $3.0 million one-time lease accounting adjustments to true up lease expense for three partner network leases, lease accounting impacts of the Memphis network lease, and the Laguna Woods Village construction contract costs, with the remaining variance driven by the subscriber and serviceable address growth across our Fiber network, consistent with the discussion in the Net Revenue section above.

Wavelo

Platform Services

Cost of revenues from Wavelo Platform Services for Fiscal 2025 decreased by $0.1 million, or 11%, to $1.1 million from $1.2 million in Fiscal 2024. This decrease was driven by savings in customer specific public cloud hosting costs, and partially offset by recognition of labor costs to deliver bundled professional services with EchoStar.

Other Professional Services

Cost of revenues from Other Professional Services for Fiscal 2025 decreased from less than $0.1 million in Fiscal 2024 to NIL million in the current period. Cost of revenues to provide other professional services change depending on the nature and scope of work we are engaged to perform for our customers for select statements of work. These cost of revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers. The decrease is aligned to the decrease in Net Revenues from other professional services discussed above.

Domain Services

Wholesale - Domain Services

Costs for Wholesale domain services for Fiscal 2025 increased by $5.6 million, or 4%, to $164.0 million as compared to $158.4 million in Fiscal 2024. Increases from Wholesale domain services were primarily driven by various registry gTLD cost increases since Fiscal 2024, as well as increased recognition of costs previously deferred, driven by lower billings due to a decrease in domain names under management. The increase is aligned to the increase in Net Revenues discussed above.

Wholesale - Value-Added Services

Costs for wholesale value-added services for Fiscal 2025 decreased by $0.2 million, or 12%, to $1.8 million as compared to $2.1 million in Fiscal 2024. This decrease was driven by the slight decrease in certificates sales, aligned to the discussion in Net Revenues above.

Retail

Costs for retail domain services for Fiscal 2025 increased by $0.6 million, or 3%, to $17.2 million as compared to $16.6 million in Fiscal 2024. Increases were driven by various registry gTLD cost increases.

Corporate and all other - Mobile services and eliminations

Cost of revenues from Mobile Services and Eliminations for Fiscal 2025 increased by $5.5 million, or 44%, to $18.2 million as compared to $12.6 million in Fiscal 2024. The increase is primarily driven by increased costs associated with mobile telephony services from the small group of customers retained by the Company as part of the EchoStar Purchase Agreement due to escalating MNO minimum commitments, and to a lesser extent changes in usage patterns. The Company incurred $4.5 million of penalties associated with the MNO minimum commitment shortfall in Fiscal 2025, as compared to $1.8 million in Fiscal 2024. The Company expects to incur penalties through January 2026, at which point the initial term of the contract is complete. The contract will automatically continue month-to-month thereafter, with no expected penalties in the month-to-month arrangement. This was partially offset by a decrease in transitional services costs provided to EchoStar in connection with the legacy Ting Mobile customer base, consistent with the above discussion around Net Revenues.

Network Expenses

Network costs for Fiscal 2025 decreased by $3.7 million, or 5% to $65.8 million as compared to $69.5 million in Fiscal 2024. The current period decrease was primarily driven by $4.5 million in personnel related cost savings resulting from the 2024 February Workforce Reduction and the 2024 Capital Efficiency Plan, executed in October 2024, as well as other restructuring efforts. This was furthered by a $0.9 million decrease in colocation fees following the closure of one colocation data center, and a $0.6 million decrease in impairment (for a total of $0.8 million of impairment in Fiscal 2025, related to obsolete and damaged materials and supplies held for capital projects). These decreases were offset by an increase in network depreciation of $1.4 million.

SALES AND MARKETING

Sales and marketing expenses consist primarily of personnel costs. These costs include commissions and related expenses of our sales, product management, public relations, call center, support and marketing personnel. Other sales and marketing expenses include customer acquisition costs, advertising and other promotional costs.

(Dollar amounts in thousands of U.S. dollars)

Sales and marketing expenses for Fiscal 2025 decreased by $11.0 million, or 19%, to $48.4 million as compared to Fiscal 2024. The decrease was primarily driven by reduced personnel costs following the 2024 February Workforce Reduction and the 2024 Capital Efficiency Plan, as well as Ting's reduced marketing and customer acquisition spend as the segment looks to measure and optimize channel spending. This decrease was also furthered by reduced Ting facilities expenses (reclassified to General & Administrative in Fiscal 2025 on a prospective basis).

Excluding movements in exchange rates and the unknown outcome of the process to review strategic alternatives for the Ting business, we expect sales and marketing expenses for Fiscal 2026, for the Tucows businesses excluding Ting to increase in absolute dollars, as we adjust our marketing programs to facilitate the continued expansion of our operations. If the Ting strategic process does not result in a successful transaction, or if it is delayed or abandoned, Ting would be required to implement significant operational changes to preserve liquidity which could include substantial reductions in operating expenses, including further reduction to sales and marketing expenses.

TECHNICAL OPERATIONS AND DEVELOPMENT

Technical operations and development expenses consist primarily of personnel costs and related expenses required to support the development of new or enhanced service offerings and the maintenance and upgrading of existing infrastructure. This includes expenses incurred in the research, design and development of technology that we use to register domain names, provide Wavelo's platform services, provide Ting's Internet Services, email, retail, domain portfolio and other Internet services. All technical operations and development costs are expensed as incurred, unless eligible for capitalization as internal use software.

(Dollar amounts in thousands of U.S. dollars)

Technical operations and development expenses for Fiscal 2025 decreased by $0.8 million, or 4%, to $17.8 million as compared to Fiscal 2024. The decrease was primarily driven by reduced personnel costs following the 2024 Capital Efficiency Plan, as well as reduced contracted services spending for tools, systems, and labor to support the technical operations and development of our systems and platforms.

Excluding movements in exchange rates and the unknown outcome of the process to review strategic alternatives for the Ting business, we expect technical operations and development expenses for Fiscal 2026 for the Tucows businesses excluding Ting to increase in absolute dollars, as we adjust our technical programs to facilitate the continued expansion of our operations. If the Ting strategic process does not result in a successful transaction, or if it is delayed or abandoned, Ting would be required to implement significant operational changes to preserve liquidity which could include substantial reductions in operating expenses, including further reduction to technical operations and development expenses.

GENERAL AND ADMINISTRATIVE

General and administrative expenses consist primarily of compensation and related costs for managerial and administrative personnel, fees for professional services, public listing expenses, rent, foreign exchange and other general corporate expenses.

(Dollar amounts in thousands of U.S. dollars)

General and administrative expenses for Fiscal 2025 increased by $5.8 million, or 16%, to $42.9 million as compared to Fiscal 2024. The increase was primarily driven by Ting facilities expenses (reclassified from Sales and Marketing in Fiscal 2025 on a prospective basis), leadership severance costs, and increased miscellaneous costs to support general and administrative functions. These increases were partially offset by some personnel savings relating to the 2024 February Workforce Reduction and the 2024 Capital Efficiency Plan and lower professional services fees incurred in the current period.

Excluding movements in exchange rates and the unknown outcome of the process to review strategic alternatives for the Ting business to address its ongoing liquidity requirements, we expect general and administrative expenses for Fiscal 2026 for the Tucows businesses excluding Ting to increase in absolute dollars, as we adjust our general & administrative spending to facilitate the continued expansion of our operations. If the Ting strategic process does not result in a successful transaction, or if it is delayed or abandoned, Ting would be required to implement significant operational changes to preserve liquidity which could include substantial reductions in operating expenses, including further reduction to general and administrative expenses.

IMPAIRMENT AND RESTRUCTURING

(Dollar amounts in thousands of U.S. dollars)

Impairment and restructuring decreased by $18.0 million, or 63%, to $10.7 million as compared to Fiscal 2024.

During Fiscal 2025, the Company recorded an impairment loss of $10.7 million primarily related to abandoned materials and supplies held for capital projects, as well as impairment of right-of-use operating lease assets. This is down from Fiscal 2024, where the Company recorded an impairment loss of $17.7 million related to assets under construction and materials and supplies held for capital projects. These assets were deemed no longer necessary for future operations following the implementation of the 2024 Capital Efficiency Plan, which included the decision to cease new market expansions in select Ting markets.

During the year ended December 31, 2024, the Company also incurred $11.0 million in one-time costs related to both the February 2024 Workforce Reduction and the 2024 Capital Efficiency Plan restructurings, which were both accounted for under ASC 420 - Exit or Disposal Cost Obligations. These costs associated with the February 2024 Workforce Reduction and 2024 Capital Efficiency Plan predominantly consisted of termination benefits for the terminated employees associated with the restructuring, continuation of benefits, outplacement costs, and professional services. No such restructuring charges or events were incurred in Fiscal 2025.

DEPRECIATION OF PROPERTY AND EQUIPMENT

(Dollar amounts in thousands of U.S. dollars)

Depreciation costs for Fiscal 2025 decreased by $0.1 million to $0.3 million as compared to Fiscal 2024. The slight decrease was due to lower additions to property and equipment in Fiscal 2025 while additions from prior years became fully depreciated.

AMORTIZATION OF INTANGIBLE ASSETS

(Dollar amounts in thousands of U.S. dollars)

46

Amortization of intangible assets for Fiscal 2025 decreased by $0.6 million, or 16%, to $3.2 million as compared to Fiscal 2024. This decrease was driven by the completed amortization of Tucows Delaware brand assets acquired in Fiscal 2005, which was completed in March 2025. The decrease was furthered by the completed amortization of customer relationships associated with the Company's Fiscal 2017 acquisition of Enom, which was completed in January 2024, as well as disposition of select customer relationship assets in Cedar Networks, acquired in Fiscal 2020.

Network rights, brand and customer relationships acquired in connection with the following acquisitions are amortized on a straight-line basis over a range of two to seven years: Enom in January 2017, Ascio in March 2019, Cedar in January 2020 and Simply Bits in November 2021.

GAIN ON DISPOSITION OF PROPERTY AND EQUIPMENT

(Dollar amounts in thousands of U.S. dollars)

During Fiscal 2025, the Company recorded gains on disposition of property and equipment of $5.9 million. This was primarily driven by a $5.1 million gain related to the sale of Ting assets under construction and materials and supplies held for capital projects, and furthered by a $0.4 million gain on Ting vehicle sales. There were no such dispositions in Fiscal 2024.

OTHER INCOME (EXPENSES)

(Dollar amounts in thousands of U.S. dollars)

Other income (expense) decreased by $7.0 million when compared to Fiscal 2024. The decrease in income was primarily driven by higher net interest expense, lower income earned on sale of Transferred Assets to EchoStar (as defined in "Note 17. Other Income (Expenses)" to the Consolidated Financial Statements), and lower other income. Net interest expense increased by $4.0 million, driven by the inclusion of $2.6 million interest expense associated with the 2023 and 2024 Term Notes, a $1.9 million increase due to lower interest expense capitalization associated with Fiber network assets under construction, a $1.2 million increase due to reduced money market fund interest income from falling interest rates, and a $1.0 million increase in interest expense associated with the Unit Purchase Agreement with Generate; partially offset by a $2.8 million decrease in interest expense related to the Credit Facility for the Tucows businesses excluding Ting due to the reduction in outstanding principal balance. Other Income decreased by $2.3 million due to a decrease in income earned on the sale of transferred assets to EchoStar as a result of normal churn, as expected. Other income also decreased by $0.6 million driven by the share of the current period impact in the Orange Domains equity-method investment.

INCOME TAXES

The following table presents our provision for income taxes for the periods presented:

(Dollar amounts in thousands of U.S. dollars)

Income taxes increased by $0.5 million and the effective tax rate, expressed as a percentage of the loss before provision for income taxes, changed from (8%) for the year ended December 31, 2024 to (13%) for the year ended December 31, 2025.

For the year ended December 31, 2025, we recorded an income tax expense of $8.5 million (2024 - $8.0 million). Our effective tax rate for the year ended December 31, 2025 of (13%) differs from the federal statutory income tax rate of 21%, primarily due to a net increase in the valuation allowances related to deferred taxes and tax owing on foreign earnings.

A reconciliation of the federal statutory income tax rate to our effective tax rate is set forth in “Note 9. Income Taxes” to the Consolidated Financial Statements.

ADJUSTED EBITDA

We believe that the provision of this non-GAAP measure allows investors to evaluate the operational and financial performance of our core business using similar evaluation measures to those used by management. We use Adjusted EBITDA to measure our performance and prepare our budgets. Since Adjusted EBITDA is a non-GAAP financial performance measure, our calculation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Because Adjusted EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a liquidity measure. For liquidity measures, see the Consolidated Statements of Cash Flows and the "Liquidity and Capital Resources" section below. Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies and/or analysts and may differ from period to period. We endeavor to compensate for these limitations by providing the relevant disclosure of the items excluded in the calculation of Adjusted EBITDA to net income based on GAAP, which should be considered when evaluating the Company's results. Tucows strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.

Our Adjusted EBITDA definition excludes provision for income tax, depreciation, amortization of intangible assets, asset impairment, interest expense (net), loss on debt extinguishment, accretion of contingent liabilities, stock-based compensation, gains and losses from unrealized foreign currency transactions, and costs that are one-time in nature and not indicative of ongoing performance (profitability), including acquisition and transition costs. Gains and losses from unrealized foreign currency transactions removes the unrealized effect of the change in the mark-to-market values on outstanding foreign currency contracts not designated in accounting hedges, as well as the unrealized effect from the translation of monetary accounts denominated in non-U.S. dollars to U.S. dollars.

The following table reconciles net income to Adjusted EBITDA:

(In Thousands of U.S. Dollars)

1 Acquisition and other costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.

Adjusted EBITDA for the year ended December 31, 2025 increased by $15.7 million, or 45% to $50.6 million when compared to the year ended December 31, 2024. The increase in Adjusted EBITDA was primarily driven by the Ting, Tucows Domains, and Wavelo segments. Adjusted EBITDA attributable to the Ting segment, which excludes the restructuring impacts of the February 2024 Workforce Reduction and 2024 Capital Efficiency Plan, improved by $16.3 million, primarily driven by subscriber growth across the markets we serve, recognition of previously deferred contract liabilities for new construction, the reduction in spend across sales and marketing activities, and reduced personnel costs due to the savings realized from the execution of the 2024 Capital Efficiency Plan, and to a lesser extent, the February 2024 Workforce Reduction. Adjusted EBITDA attributable to the Tucows Domains segment increased by $4.3 million from strong expiry and wholesale results through the current period. Adjusted EBITDA attributable to the Wavelo segment increased $3.7 million, primarily driven by the recognition of incremental revenues from both existing and new customers. These increases in Adjusted EBITDA were partially offset by a decrease in Mobile Services and eliminations contribution of $8.6 million, primarily from increasing MNO minimum purchase obligation related penalties and a decrease in income earned on sale of Transferred Assets to EchoStar; partially offset by reduced personnel costs with the execution of the 2024 Capital Efficiency Plan.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2025, our cash and cash equivalents balance decreased $10.1 million, restricted cash included in funds held by trustee increased by $0.7 million, and our secured notes reserve funds balance increased by $0.5 million, respectively, when compared to December 31, 2024. The decrease in our cash balance was primarily driven by $5.8 million from cash used in operating activities, $5.0 million related to the repayment of the 2023 Credit Facility, $0.4 million in financing costs related to the extension of the 2023 Credit Facility, $17.1 million for additions to property and equipment, and $0.2 million related to the acquisition of intangible assets. These uses of cash were partially offset by $19.5 million proceeds on disposal of property and equipment.

As of December 31, 2025, our total current liabilities increased by $130.6 million to $330.4 million when compared to December 31, 2024.

This was primarily the result of the reclassification of the redeemable preferred units of $137.0M to current liabilities following the Return Breach and Trigger Event asserted by Generate in December 2025 as outlined in "Note 13. Redeemable Preferred Units" to the Consolidated Financial Statements. This reclassification reflects the possibility that Generate could make a Redemption Request; however, as of the date of this report, no such request has been submitted. Ting operates as a bankruptcy-remote subsidiary, and its indebtedness has no recourse to Tucows Inc. or its other subsidiaries.

Contract liabilities, current portion, decreased $4.1 million to $131.6 million. Contract liabilities represent amounts billed to customers in advance for domain registrations and other services that will be recognized as revenue over future service periods. Associated deferred costs of fulfillment, current portion are presented in current assets and similarly decreased by $4.3 million to $97.2 million.

Excluding these amounts, total current liabilities decreased by $2.3 million to $61.9 million, driven by a $1.2 million decrease in our foreign currency derivative liability associated with our foreign currency hedge, and other working capital movements.

2024 Ting Securitized Financing Facility

On August 20, 2024, the Company through its wholly owned subsidiaries, including Ting, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitized transaction. On the closing date, Ting issued (i) $55,000,000 of its 5.63% Secured Fiber Revenue Notes, Series 2024-1, Class A-2 (the “2024 Class A-2 Notes”), (ii) $8,000,000 of its 6.85% Secured Fiber Revenue Notes, Series 2024-1, Class B (the “2024 Class B Notes”) and (iii) $16,000,000 initial principal amount of 9.15% Secured Fiber Revenue Notes, Series 2024-1, Class C (the “2024 Class C Notes” and together with the 2024 Class A-2 Notes and the 2024 Class B Notes, the “2024 Term Notes”).

The offering was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). Subject to certain limitations, the 2024 Notes are secured by certain of the Company’s revenue-generating assets, consisting principally of the Securitized Assets, that are owned by certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company (collectively, the “Securitization Entities”) that act as guarantors under the Base Indenture.

The 2024 Term Notes were issued under the Base Indenture, dated as of May 4, 2023 (as supplemented by the Base Indenture Supplement No. 1, dated as of November 10, 2023), by and between the Issuer, the asset parties party thereto and Citibank, N.A., as trustee (in such capacity, the “Indenture Trustee”) and securities intermediary and a series supplement to the Base Indenture dated as of the Closing Date (the “Series 2024-1 Supplement”), by and among the Issuer, the asset parties party thereto and the Indenture Trustee. The Base Indenture and the Series 2024-1 Supplement will allow the Issuer to issue additional series of notes in the future, subject to certain conditions set forth therein.

Interest payments on the 2024 Term Notes are payable on a monthly basis. The legal final maturity date of the 2024 Term Notes is in August of 2054, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2024 Term Notes will be in August 2029. If the Issuer has not repaid or refinanced the 2024 Term Notes prior to the anticipated repayment date, additional interest will accrue on the 2024 Term Notes in an amount equal to the greater of (A) 5.00% per annum and (B) a per annum interest rate equal to the excess, if any, by which the sum of the following exceeds the original interest rate of such 2024 Term Note (i) the yield to maturity (adjusted to a “mortgage equivalent basis” pursuant to the standards and practices of the Securities Industry and Financial Markets Association) on such anticipated repayment date of the United States Treasury Security having a term closest to 10 years, plus (ii) 5.00%, plus (iii) for the 2024 Class A-2 Notes, 2.00% ,for the 2024 Class B Notes, 3.25%, for the 2024 Class C Notes, 7.00%. Please see the discussion in the Material Cash Requirements section below.

2023 Credit Facility

On September 22, 2023, the Company and its wholly owned subsidiaries, Tucows.com Co., Ting Inc., Tucows (Delaware) Inc., Wavelo, Inc. and Tucows (Emerald), LLC (each, a “Borrower” and together, the “Borrowers”) and certain other subsidiaries of the Company, as guarantors, entered into the 2023 Credit Agreement (the “2023 Credit Facility”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto, to, among other things, provide the Borrowers with the 2023 Credit Facility in an aggregate amount not to exceed $240 million. The Borrowers may request an increase to the 2023 Credit Facility through new commitments of up to $60M if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the 2023 Credit Agreement) is less than 3.75:1.00. The Credit Facility was originally due to expire on September 22, 2026.

On September 8, 2025, the Borrowers entered into a one-year Extension Agreement (the "Extension Agreement"). The Extension Agreement extends the term of the 2023 Credit Agreement through September 22, 2027. The material terms of the 2023 Credit Agreement remain unchanged; however, the Extension Agreement amends certain definitions relating to the treatment of specified expenses in the calculation of Adjusted EBITDA for purposes of the Total Funded Debt to Adjusted EBITDA Ratio financial covenant. In connection with the Extension Agreement, the Company incurred $0.4 million of fees paid to the Lenders. These fees have been reflected as reduction to the carrying amount of the loan payable and will be amortized over the extended term to September 2027.

The 2023 Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The 2023 Credit Agreement requires that the Company comply with certain customary non-financial covenants and restrictions. In addition, the Company has agreed to comply with the following financial covenants: (1) a leverage ratio by maintaining at all times a Total Funded Debt to Adjusted EBITDA Ratio of not more than 3.75:1:00; and (2) an interest coverage ratio by maintaining as of the end of each rolling four financial quarter period, an Interest Coverage Ratio (as defined in the 2023 Credit Agreement) of not less than 3.00:1.00. As of December 31, 2025, the Company's leverage ratio was 3.12:1.00 and Interest Coverage Ratio was 4.17:1.00.

During Fiscal 2025, the Company made net repayments of $5.0 million towards the 2023 Credit Facility. The Company ended December 31, 2025 with a remaining principal balance of $190.4 million, for which the required repayment is due in 2027.

As of December 31, 2025, the Company held contracts in the amount of $27.2 million with BMO to trade U.S. dollars in exchange for Canadian dollars under an uncommitted treasury risk management facility which assists the Company with hedging Canadian dollar exposures. Please see the discussion in the Material Cash Requirements section below.

Cash Flow from Operating Activities

Year ended December 31, 2025

Net cash outflows from operating activities during Fiscal 2025 totaled $5.8 million, compared to net cash outflows of $19.7 million in the prior year, reflecting a 71% decrease. Net loss was $75.8 million, and included non-cash charges and recoveries of $77.9 million including depreciation and amortization, accretion of redeemable preferred units, impairment of property and equipment, stock-based compensation, loss (gain) on disposal of assets, amortization of debt discount and issuance costs, and deferred income taxes (recovery). This was offset by changes in our working capital, which resulted in a net cash outflow of $15.3 million from cash utilization of $19.2 million driven by prepaid expenses and deposits, accounts payable and accrued liabilities, contract liabilities and accounts receivable; partially offset by positive contributions of $3.9 million from movements in deferred costs of fulfillment. This impact was partially offset by changes from other operating assets and liabilities of $7.5 million, including changes in contract assets, inventory, income taxes recoverable, customer deposits and accreditation fees payable.

Cash Flow from Financing Activities

Year ended December 31, 2025

Net cash outflows from financing activities during Fiscal 2025 totaled $5.4 million, compared to net cash inflows of $44.5 million in the prior year, reflecting a $49.9 million year-over-year change . Total cash outflows were driven by $5.0 million related to the repayment of the syndicate revolver and $0.4 million related to the syndicate revolver issued. These were partially offset cash inflows of less than $0.1 million from proceeds received on exercise of stock options.

Cash Flow from Investing Activities

Year ended December 31, 2025

Net cash inflows from investing activities during the Fiscal 2025 totaled $2.2 million, compared to net cash outflows of $56.5 million in the prior year, reflecting a $58.7 million year-over-year change. Total cash inflows were driven by $19.5 million of proceeds on disposal of property and equipment. These were offset by $17.1 million cash outflows related to the investment in property and equipment, primarily to support the continued expansion of our Ting Internet Fiber network footprints in Colorado, North Carolina, and California, as well as $0.2 million for the acquisition of other intangible assets.

Material Cash Requirements

At December 31, 2025, the Company's cash and cash equivalents, restricted cash and secured notes reserve funds balances totaled $64.2 million, of which $41.3 million belonged to Ting and $22.9 million belonged to the other Tucows businesses. Of the $41.3 million which belonged to Ting, $5.3 million is restricted cash and $12.2 million is restricted cash in secured notes reserve funds.

In our 2024 Annual Report, we disclosed our material cash requirements of both the Ting segment as well as the other segments excluding Ting. As of December 31, 2025, other than the items mentioned below, there have been no other material changes to our material cash requirements outside the ordinary course of business.

Ting

As of December 31, 2025, the balance owing on the Unit Purchase Agreement was $137.0 million ("Note 13. Redeemable Preferred Units" to the Consolidated Financial Statements). On May 4, 2023, Tucows, through its indirect and wholly owned subsidiaries, including Ting Fiber, LLC entered into a definitive agreement relating to a securitized financing facility where Ting Issuer LLC, a Delaware limited liability company, issued the 2023 Term Notes for a total value of $238.5 million and 2024 Term Notes for a total value of $63.0 million ("Note 8. Notes Payable" to the Consolidated Financial Statements).

As of December 31, 2025, Ting had not paid the preferred return due under the Unit Purchase Agreement to Generate for three consecutive quarters amounting to $14.7 million in the aggregate. The unpaid interest for these quarters has been treated as payment-in-kind ("PIK") and added to the outstanding balance of the redeemable preferred units. On December 1, 2025, Ting received written notice from Generate asserting that a Return Breach and a Trigger Event had occurred as a result of Ting's failure to pay quarterly preferred return for two consecutive quarters, and Generate reserved its rights to pursue certain remedies as described in "Note 13. Redeemable preferred units" to the Consolidated Financial Statements.

Ting undertook workforce reductions on February 7, 2024 and October 30, 2024, which aimed to reduce Ting’s workforce by 13% and 42%, respectively. Both plans were designed to lower year-over-year operating expenses by streamlining operations, reducing capital activities and reducing operating expenses within the Ting operating segment.

Ting incurred a net loss of $89.8 million and $121.7 million for the year ended December 31, 2025 and the year ended December 31, 2024, respectively. At December 31, 2025, Ting had $23.8 million in unrestricted cash and cash equivalents, $3.6 million in accounts receivable, $1.2 million in accounts payable and $8.7 million in accrued liabilities. At December 31, 2025, Ting’s long-term liabilities included $291.6 million payable on the 2023 and 2024 Term Notes. Ting's current liabilities included $137.0 million payable on the Redeemable Preferred Units. Ting incurred an operating cash flow deficit of $32.2 million and $49.9 million for the year ended December 31, 2025 and the year ended December 31, 2024, respectively. Ting has scheduled interest payments of $20.1 million in the twelve months following December 31, 2025.

Given the ongoing capital needs of Ting, the Company commenced a process to review strategic alternatives for the Ting business during 2025. Ting may not be able to meet its financial obligations over the twelve months following the issuance of this Annual Report without additional financing. Ting has historically relied on the proceeds from its Redeemable Preferred Units as well as its 2023 and 2024 Term Notes to fund its operations and the expansion of the Ting Fiber Internet footprint. Ting currently has limited capacity to expand its borrowings under the Base Indenture. Ting's ability to obtain additional financing if required will be subject to a number of factors, including market conditions, our operating performance and investor sentiment. If we are unable to raise additional capital when required or on acceptable terms or complete a sale transaction, we may have to consider other alternatives to raise capital or significantly restrict our operations or obtain funds by entering into agreements on unattractive terms, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained, and which could result in additional dilution to our stockholders. If we do not have sufficient funds to continue operations, Ting could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing some or all of their investment in us. Any such bankruptcy of Ting would not trigger cross-defaults under the 2023 Credit Facility. Ting operates as a bankruptcy-remote entity and its debt has no recourse to the Company. Accordingly, the Company's direct financial exposure to Ting is limited to certain employee severance and termination benefits, contractual guarantees, termination or exit costs, and professional service and advisory fees associated with services provided at the corporate level, as disclosed in "Note 19. Commitments and Contingencies" to the Consolidated Financial Statements.

Tucows Businesses Excluding Ting

Tucows businesses excluding Ting, acquisitions and capital investments have been funded by the Company's operating income and the Company's existing 2023 Credit Agreement. As of December 31, 2025, the Company’s 2023 Credit Facility had an outstanding balance of $190.4 million. Tucows businesses excluding Ting make principal repayments from time to time.

For Fiscal 2026, the Company plans to fund the cash requirements of Tucows businesses excluding Ting solely through operating income, while making discretionary loan repayments to create greater operating flexibility and access to additional financing.

In the long-term, Tucows businesses excluding Ting may seek additional financing to accelerate the growth of our Tucows Domains or Wavelo businesses, repurchase shares or future acquisitions. The Company's 2023 Credit Facility, which was renewed in 2025, expires on September 22, 2027 and the Company will be required to refinance the 2023 Credit Facility once it becomes due.

We develop products in Canada and sell these services in North America and Europe. Our sales are primarily made in U.S. dollars, while a major portion of our expenses are incurred in Canadian dollars. Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. Our interest income is sensitive to changes in the general level of Canadian and U.S. interest rates, particularly since the majority of our investments are in short-term instruments. Based on the nature of our short-term investments, we have concluded that there is no material interest rate risk exposure as of December 31, 2025.

We are also subject to market risk exposure related to changes in interest rates under our 2023 Credit Agreement. Changes in interest rates will impact our borrowing cost. However, fluctuations in interest rates are beyond our control. We will continue to monitor and assess the risks associated with interest expense exposure and may act in the future to mitigate these risks.

Although our functional currency is the U.S. dollar, a substantial portion of our fixed expenses are incurred in Canadian dollars. Our policy with respect to foreign currency exposure is to manage financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some of the impact of foreign currency exchange movements. Exchange rates are, however, subject to significant and rapid fluctuations, and therefore we cannot predict the prospective impact of exchange rate fluctuations on our business, results of operations and financial condition. Accordingly, we have entered into foreign exchange forward contracts to mitigate the exchange rate risk on portions of our Canadian dollar exposure.

As of December 31, 2025, we had the following outstanding foreign exchange forward contracts to trade U.S. dollars in exchange for Canada dollars:

53

As of December 31, 2025, the Company had $27.2 million of outstanding foreign exchange forward contracts which will convert to CDN $37.0 million. Of these contracts, $27.2 million met the requirements for hedge accounting.

As of December 31, 2024, the Company had $29.4 million of outstanding foreign exchange forward contracts which will convert to CDN $40.3 million. Of these contracts, $29.4 million met the requirements for hedge accounting.

We have performed a sensitivity analysis model for foreign exchange exposure during the year ended December 31, 2025. The analysis used a modeling technique that compares the U.S. dollar equivalent of all expenses incurred in Canadian dollars, at the actual exchange rate, to a hypothetical 10% adverse movement in the foreign currency exchange rates against the U.S. dollar, with all other variables held constant. Foreign currency exchange rates used were based on the market rates in effect during the year ended December 31, 2025. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a decrease in net income for the year ended December 31, 2025 of approximately $5.5 million, before the effects of hedging. We will continue to monitor and assess the risk associated with these exposures and may take additional actions in the future to hedge or mitigate these risks.

Credit risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, foreign exchange contracts and accounts receivable. Our cash, cash equivalents and short-term investments are in high-quality securities placed with major banks and financial institutions whom we have evaluated as highly creditworthy, and commercial paper. Similarly, we enter into our foreign exchange contracts with major banks and financial institutions. With respect to accounts receivable, we perform ongoing evaluations of our customers, generally granting uncollateralized credit terms to our customers, and maintaining expected credit losses based on historical experience and our expectation of future losses.

Interest rate risk

Our exposure to interest rate fluctuations relate primarily to the 2023 Credit Agreement.

As of December 31, 2025, we had an outstanding balance of $190.4 million on the 2023 Credit Facility. The 2023 Credit Agreement added SOFR Loans as a form of advance available under the 2023 Credit Facility to replace LIBOR Rate Advances, and such SOFR Loans may bear interest based on Adjusted Daily Simple SOFR (defined to be the applicable SOFR rate published by the Federal Reserve Bank of New York plus 0.10% per annum subject to a floor of zero) or Adjusted Term SOFR (defined to be the applicable SOFR rate published by CME Group Benchmark Administration Limited plus 0.10% for one-month, 0.15% for three-months, and 0.25% for six-months per annum). As of December 31, 2025, an adverse change of one percent on the interest rate would have the effect of increasing our annual interest payment on the 2023 Credit Agreement by approximately $1.9 million, assuming that the loan balance as of December 31, 2025 is outstanding for the entire period.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this annual report, our chief executive officer and chief financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP
• Provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, such as resource constraints, human error, lack of knowledge or awareness and the possibility of intentional circumvention of these controls, internal control over financial reporting may not prevent or detect misstatements. Furthermore, the design of any control system is based, in part, upon assumptions about the likelihood of future events, for which assumptions may ultimately prove to be incorrect. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on the results of our evaluation, management has determined that our internal control over financial reporting was effective as of December 31, 2025.

Deloitte LLP ("Deloitte"), our independent registered public accounting firm, has audited our Consolidated Financial Statements and expressed an unqualified opinion thereon. Deloitte has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2025. These reports are set forth at the beginning of Part II, Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.