Ting Mobile Announces New Network Service Provider Agreement and Provides Updated Financial Guidance
July 09 2019 - 05:20PM
Tucows Inc. (NASDAQ:TCX, TSX:TC), a provider of network access,
domain names and other Internet services today announced that Ting
Mobile, an MVNO phone service provider and a division of Tucows,
will be adding service over the Verizon network to its product
offerings later this year.
Verizon has the highest level of LTE coverage of any mobile
provider in the US and is routinely rated as the best nationwide
cellular network for video experience and data performance.
“We expect that combining the best-rated cellular network in the
US with Ting’s award-winning customer service will further enhance
our already very compelling offering,” said Tucows CEO Elliot
Noss.
Ting Mobile also extended its network provision agreement with
Sprint through September 2020.
At the same time, Ting Mobile has informed T-Mobile it will not
renew its agreement effective December 19 of this year. This will
begin a migration away from the T-Mobile network to be completed by
December 19, 2020. Ting Mobile will work with customers currently
using the T-Mobile network to migrate to Ting Mobile’s other
network options, including Verizon. Ting customers will be eligible
to use the Verizon network following integration with the Verizon
system, which we expect to be completed by the end of the year.
While Tucows believes that these are positive changes for Ting
Mobile for the long term, a sizeable customer migration does come
with short-term costs. For this reason, as well as the previously
disclosed underperformance in the mobile business, which
unexpectedly persisted, Tucows is updating its 2019 cash EBITDA1
guidance to $52 million from the previously provided $62
million.
“Our updated 2019 financial guidance primarily reflects
short-term impacts on our Ting Mobile business resulting from
changes in our mobile carrier relationships, which we believe set
the stage for stronger long-term prospects,” said Noss. “At the
same time, we continue to steadily execute the Ting Internet
opportunity, which we believe will drive growth for the
long-term.”
Management RemarksConcurrent with the
dissemination of this news release, management’s pre-recorded
remarks discussing this announcement are available in audio file
and transcript form on the Tucows website at:
https://www.tucows.com/news/.
Notes:
- Cash EBITDA
Tucows reports all financial information required in accordance
with United States generally accepted accounting principles (GAAP).
Along with this information, to assist financial statement users in
an assessment of our historical performance, the Company typically
discloses and discusses non-GAAP financial measures, adjusted
EBITDA and cash EBITDA, in press releases and on investor
conference calls and related events that exclude certain non-cash
and other charges as the Company believes that the non-GAAP
information enhances investors' overall understanding of our
operational performance.
As disclosed previously, the Company’s adjusted EBITDA
definition excludes depreciation, amortization of intangible
assets, income tax provision, interest expense, interest income,
stock-based compensation, asset impairment, gains and losses from
unrealized foreign currency transactions and infrequently occurring
items, 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 unhedged foreign currency contracts, as well as the
unrealized effect from the translation of monetary accounts
denominated in non-U.S. dollars to U.S. dollars.
Because we are unable to predict certain potentially material
items affecting adjusted EBITDA on a GAAP basis, principally
unrealized gains and losses on changes in fair value of forward
contracts, unrealized gains and losses on foreign exchange
revaluation of foreign denominated monetary assets and liabilities
and acquisition and transition costs, we cannot reconcile 2019
adjusted EBITDA guidance, a non-GAAP measure, to net income, the
most directly comparable GAAP measure, in reliance on the
“unreasonable efforts” exception set forth in SEC rules.
The Company’s cash EBITDA definition further excludes the net
impact of the changes in our deferred revenue, prepaid domain name
registry balances and amortization of contract costs from adjusted
EBITDA.
$ millions |
Original 2019 Guidance (February) |
Updated 2019 Guidance (July) |
Adjusted EBITDA |
$57.4 |
$47.9 |
Net deferred revenue* |
$4.6 |
$4.1 |
Cash EBITDA |
$62.0 |
$52.0 |
*Net deferred revenue is defined as the change in deferred revenue,
prepaid domain name registry and ancillary services fees and net
amortization of contract costs |
About TucowsTucows is a provider of network
access, domain names and other Internet services. Ting
(https://ting.com) delivers mobile phone service and fixed Internet
access with outstanding customer support. OpenSRS
(http://opensrs.com), Enom (http://www.enom.com) and Ascio
(http://ascio.com) manage a combined 25 million domain names and
millions of value-added services through a global reseller network
of over 38,000 web hosts and ISPs. Hover (http://hover.com) makes
it easy for individuals and small businesses to manage their domain
names and email addresses. More information can be found on Tucows’
corporate website (http://tucows.com).
This release includes forward-looking statements as that term is
defined in the U.S. Private Securities Litigation Reform Act of
1995, including statements regarding our expectations regarding our
change in mobile carrier relationships and including, without
limitation, our expectations regarding our ability to migrate
customers to our ongoing carriers, and our expectations regarding
long-term performance. These statements are based on management’s
current expectations, and are subject to a number of uncertainties
and risks, including the cost of customer migration; our ability to
add Verizon as a carrier; the ongoing challenges in our mobile
business performance; and other risks and uncertainties that could
cause actual results to differ materially from those described in
the forward-looking statements. Information about other potential
factors that could affect Tucows’ business, results of operations
and financial condition is included in Tucows’ filings with the
Securities and Exchange Commission. All forward-looking statements
should be evaluated with the understanding of their inherent
uncertainty. All forward-looking statements are based on
information available to Tucows as of the date they are made.
Tucows assumes no obligation to update any forward-looking
statements, except as may be required by law. Tucows, Ting,
OpenSRS, Enom, Ascio and Hover are registered trademarks of Tucows
Inc. or its subsidiaries.
Contact:Lawrence ChamberlainLoderock Advisors(416) 519-4196
lawrence.chamberlain@loderockadvisors.com
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