What happened
Shares of network service provider Tucows (TCX -0.37%) jumped as much as 12.2% higher on Wednesday, driven by Tuesday night's second-quarter earnings report.
So what
The report was actually not a home run. Revenues of $84.2 million exceeded Wall Street's consensus targets but GAAP (generally accepted accounting principles) earnings per share came in at $0.50, well below the $0.57 analyst consensus.
The Street targets were easily shrugged off, since they are based on estimates by just two analyst firms and the lightly followed company doesn't issue financial guidance figures. More to the point, sales rose 78% year over year thanks to the recently closed buyout of domain-name registrar Enom. Earnings jumped 28% higher, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) profits rose by 50%, and operating cash flows more than tripled.
Image source: Getty Images.
Now what
Tucows is an inspiring growth story these days. The domain-name segment serves as a meaty financial foundation from which the company can launch new business initiatives, including the matched pair of Ting Mobile wireless services and Ting Internet broadband connections. Both of the Ting-branded offerings are fairly new on the market, having sprung from a business idea first discussed in 2014. Consumers have embraced Ting in the early handful of test markets, and Tucows is planning to add several more Ting markets before the end of 2017.
That growth vision explains how Tucows shares have managed to more than double in 52 weeks, despite missing Wall Street's earnings targets in three out of four quarterly reports. It's not always all about the cold, hard numbers.
