Tucows, with a market capitalization of $215 million, provides Internet services in three segments:
- Ting supplies fiber optic and wireless internet.
- Wavelo provides billing, network management and developer platforms for communications providers.
- Tucows Domains provides wholesale and retail domain registration through the OpenSRS, eNom, Ascio, EPAG and Hover brands, plus email hosting, security services and publishing tools to internet service providers and web hosting companies.
Let’s take a look at why I’m bullish on this TSX tech stock right now.
Is this small-cap TSX stock a good buy?
Tucows reported consolidated revenues of $98.5 million in the second quarter, up 10% year over year. Additionally, it was the fourth consecutive quarter of double-digit revenue growth for the diversified internet services company.
In the June quarter, Tucows reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $12.6 million, up 37% year over year. In the first six months of 2025, the company reported adjusted EBITDA of $26.2 million and is on track to end the year with EBITDA of $47 million.
The Domains business continues to deliver steady growth, with revenue up 8% to US$67.6 million, while adjusted EBITDA rose 12% to US$12.5 million. Gross margin increased by 14% thanks to healthy wholesale demand, strong performance in value-added services and steady retail growth.
The company has secured two transformative registry services contracts that position Tucows as an infrastructure provider for some of the world’s largest registries. Management also completed the migration of NIXI’s four million domains in May and signed Radix to migrate just over 10 million domains across 11 top-level domains, including .online, .store and .tech, starting in November.
The Radix deal will make Tucows the backend provider for two of the largest registries in the world. Wavelo posted its best quarter since inception, with revenue of $12.7 million, up 21% year-over-year, while adjusted EBITDA rose 37% to $5.4 million. The growth came from expanding existing subscribers and introducing the new EchoStar rate card as part of a four-year extension.
Management focuses sales efforts on larger first- and second-tier opportunities, while deprioritizing smaller deals where pricing pressure is dominant. The company is aggressively using AI tools, with more than 40% of code now written by AI among the most engaged engineers.
Ting achieved 12% revenue growth to $16.4 million, driven by an 8% increase in subscribers to a total of 52,100 customers and improved average revenue per user.
The fiber ISP (internet service providers) business reported an adjusted EBITDA loss of US$600,000 before a non-cash lease adjustment, which represents a significant improvement from the US$6.4 million loss in the prior year period.
Management sold non-strategic assets totaling more than $15 million through three transactions in Arizona and Colorado, accelerating the transformation to a pure ISP model.
Corporate net debt fell for the fifth quarter in a row to $190.3 million, with a net debt ratio of 3.14 times and interest coverage of 3.99 times.
What is the price target of the TSX stock?
Analysts who follow TSX stock predict that revenue will increase from $368 million in 2024 to $545 million in 2027. During this period, free cash flow (FCF) is expected to increase from $19.50 million to $45.6 million. If the Canadian stock price advances ten times FCF, it should more than double over the next eighteen months.
Although Tucows has underperformed its technology peers over the past four years, it is well positioned to deliver outsized returns for investors over the next twelve to eighteen months.
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