Tucows (TCX) Announces Capital Efficiency Plan

Tucows Inc. (NASDAQ: TCX) has implemented a capital efficiency plan, including a significant layoff in its Ting business, in order to cut expenses and move towards Ting becoming self-sufficient. There were also layoffs at the Tucows head office level, as part of a shared services reorganization.

The plan includes a reduction in headcount that impacts approximately 42% of Ting's workforce and 17% of Tucows' total workforce. "This decision was a difficult one and I want to acknowledge the impact it will have on the employees who are leaving," said Tucows President and Chief Executive Officer, Elliot Noss. "These are hardworking people who have made significant contributions to the Company, and their dedication will be remembered. We do not take these measures lightly, and this decision was made with the deepest consideration for the future of the Ting business and its continued sustainability."

"We undertook the capital efficiency plan after exploring all other options to finance Ting's continued expansion," Noss continued. "This plan will put the Ting and Tucows businesses back to paths of growing Adjusted EBITDA. With a more efficient cost structure and capital from our recent asset-backed securitization, we are focused on increasing penetration within our own footprints and within large partner markets like Memphis and Colorado Springs. Our goal is to transition Ting to a cash-generating business that sustains its own operations and growth."

We expect this to lead to significant Adjusted EBITDA growth for Tucows in 2025 and for the Ting business to be in and around Adjusted EBITDA breakeven in 2025.

The capital efficiency plan will be discussed in more detail in the upcoming Q3 2024 Management Remarks on Thursday, November 7, 2024 at 5:05pm. Links to the third quarter remarks and related earnings reports will be available at www.tucows.com/investors/financials.

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