Investor Presentation elliot noss | president + ceo May 2019
This presentation may contain forward-looking statements, relating to the Company’s operations or to the environment in which it operates, which are based on Tucows Inc.’s operations, estimates, forecasts and projections. These statements are not guarantees of future performance and are subject to important risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate or differ materially from actual future events or results. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, investors should not place undue reliance on these forward-looking statements, which are based on Tucows Inc.’s current expectations, estimates, projections, beliefs and assumptions. These forward-looking statements speak only as of the date of this presentation and are based upon the information available to Tucows Inc. at this time. Tucows Inc. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2
Consistent reliable Cash flow generation + Growth 3
17 17 consecutive years consecutive years of positive cash flow of revenue growth from operations 19.3% 18 annual ROI years since going public as a public company 4
Our business 5
Next phase Strong cash flowing of outsized growth: businesses: 6
: Domain services 7
The Backbone of the Internet ~25 million Second largest domain name registrar in the world Domains under management >1.5 million Renewal rates well above Domain transactions every industry average month 8
Wholesale Channel >38,000 World’s largest wholesale domain name registrar reseller customers Leading wholesale platforms for selling and integrating domain names >150 Footprint in majority of the developing world countries
Based on simple premise: “What people are forced to put up with from mobile service providers just doesn’t make sense . It’s too complicated, too opaque, too adversarial, too expensive and frankly too inhuman. We’re changing that. ” 10
So far, well received: Consumer Reports: highest overall satisfaction rating in the history of the survey Net promoter scores Costco 78 Apple 76 Nordstrom 75 Ting Mobile 73 Amazon 69 Southwest Airlines 66 Mobile phone providers 16 11
Key Metrics ~163,000 296,300 accounts 1 subscribers 1 ~ $23 61% average subscriber’s bill gross margin 2.95% <$100 churn 2 customer acquisition costs 12
Outsized Growth Opportunity There are hundreds of millions of wireless customers who want and deserve a better mobile service experience Based on company filings 13
“There is every reason to believe that innovation will continue, that bandwidth needs will keep on growing – and that only fiber-to-the-home networks with Leveraging the gigabit/second speed with fiber’s Ting brand and superior reliability and plentiful operational base upstream capacity , will be able to for the fixed Internet keep delivering the necessary access market bandwidth.” - Broadband Communities, 2013 14
Providing gigabit speeds over fiber-to-the-premise networks 50x 1000x Faster than avg Faster than avg US download speed US upload speed 15
Ting Internet Build Scorecard 16
Cost to build & connect a home Annual gross margin $2,500 - $3,000 1 $1,000 Expected take rate: Monthly price: home $89 Year 1 20% business $139 + startup 2 Year 5 50% 17
Financial review 1. Adjusted EBITDA 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. (Prior to 2013 Adjusted EBITDA included net deferred revenue and did not included foreign currency transactions or acquisition and transition costs) 2. Adjusted EBITDA for 2017 reflects the impact of the purchase price accounting adjustment related to the fair value write down of deferred revenue from the Enom acquisition which lowered Adjusted EBITDA by $7.8 million.
Key Financial Market Data Metrics Listings: NASDAQ:TCX TSX: TC Cash 1 : US$11.0m Price (NASDAQ): US$87.34 Debt 1 : US$92.8m Shares out: ~10.7m Market cap: ~US$934m
Investment Summary Consistency and reliability through high volume, low-cost subscription services Dominant position in the global wholesale domain name market Potential for continued outsized growth opportunity in Ting mobile Opportunity for next phase of outsized long-term growth as a first mover in the fiber-to-the home industry Committed to returning capital to shareholders portfolio of domain names with no ascribed value
thank you elliot noss | enoss @ tucows.com tucows.com/investors
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