1 High-Growth Stock for Long-Term Business Owners

Tucows Inc. (TSX:TC)(NASDSQ:TCX) provide useful services that help people unlock the power of the internet.

| More on:
analyze data

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Tucows (TSX:TC)(NASDSQ:TCX) provides simple and useful services that help people unlock the power of the internet. The company reduces the complexity of customer experiences while accessing internet services such as domain name registration and email. The company operates two segments, network access services and domain services, which are differentiated primarily by the nature of services, the markets served and the regulatory environments in which the segments operate.

The company’s management regularly reviews  operating results  to make decisions about how the company utilizes resources and to measure  operating performance. To assist the company in forecasting growth and to help it monitor the effectiveness of operational strategies, the company’s management regularly reviews revenue for each service offering to gain a better understanding of the key business metrics driving Tucows’ business.

Value-added retail mobile services

Tucows’ network access services division includes retail mobile services, mobile platform and professional services supporting  fixed high-speed internet access services and other revenues, including billing solutions to small internet service providers. Historically, the company offered retail mobile services through certain third-party retail stores and online retailers. Revenues are generated from the sale of retail telephony services, mobile phone hardware and related accessories to individuals and small businesses.

Multiple sources of revenue

The company’s domain services division includes wholesale and retail domain name registration services, value added services and portfolio services derived through several brands. Tucows earns revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations. In addition, it earn revenues from the sale of retail domain name registration and email services to individuals and small businesses.

Broad geographical diversity

Domain services revenues are attributed to the country in which the contract originates, which is primarily in Canada and the United States. Several domain services contracts and agreements also originate in Europe. The company’s primary distribution channel is a global network of approximately 36,000 resellers that operate in approximately 160 countries and who typically provide customers with solutions for establishing and maintaining an online presence.

Tucows’ primary focus is serving the needs of this network of resellers by providing the broadest portfolio of country code top-level domain options, a white-label platform that facilitates the management of domain names, easy-to-use interfaces, comprehensive management and reporting tools.

Superior customer service

Tucows’ services are integral to the solutions that the company’s resellers deliver to customers. The company provides support to resellers by email, chat and phone in the event resellers experience issues or problems with Tucows’ services. In addition, the company’s network operating center proactively monitors all services and network infrastructure to address deficiencies before customer services are impacted.

The underlying platforms for Tucows’ services are among the most mature, reliable and functional reseller-oriented provisioning and management platforms in the software industry. The company continues to refine, evolve and improve these services for both resellers and end-users. Further, Tucows’ business model is characterized primarily by non-refundable, up-front payments, which lead to recurring revenue and positive operating cash flow. This should serve long-term shareholders well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned. Tom Gardner owns shares of Tucows. The Motley Fool owns shares of and recommends Tucows and TUCOWS INC.

More on Investing

A solar cell panel generates power in a country mountain landscape.
Top TSX Stocks

3 TSX Stocks You Can Hold for the Next 3 Decades

While the market faces significant headwinds, it's crucial to ensure that you can commit to the TSX stocks you're holding…

Read more »

energy oil gas
Dividend Stocks

2 High-Yield Energy Stocks to Buy as Recession Approaches

Energy stocks such as TC Energy and Canadian Natural Resources allow investors to generate income even in recessionary times.

Read more »

green power renewable energy
Dividend Stocks

3 Top Dividend Stocks to Drive Your Passive Income

These three high-yielding, safe dividend stocks could boost your passive income.

Read more »

Dial moving from 4G to 5G
Tech Stocks

TFSA Investors: 2 Canadian Stocks With Unbelievable Staying Power 

Amid economic uncertainty, investors look for stocks that can thrive in any crisis and grow long term. Here are two…

Read more »

protect, safe, trust
Dividend Stocks

TFSA Wealth: How to Earn $363 in Monthly Passive Income for Life

Canadian investors can harness the power of the TFSA to generate steady tax-free passive income for decades.

Read more »

Canadian Dollars
Dividend Stocks

TFSA Millionaire: How to Turn $40,000 Into $1.2 Million for Retirement

Here's how TFSA investors are using the power of compounding to buy top Canadian dividend stocks to build retirement wealth.

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Superb Income and Growth Stocks for Every Portfolio

The market is full of superb income and growth stocks, but not all belong in your portfolio. Here are three…

Read more »

stock market
Stocks for Beginners

Worried About Stagflation? 2 Canadian Stocks for All Market Cycles 

Stagflation delays economic recovery. You can keep your portfolio stagflation ready with these Canadian stocks that are suitable for all…

Read more »