2Cows (TCX) Q2 2025: Domains Migration Adds 10M+ TLDs, Accelerating Margin Expansion Path
2Cows’ Q2 2025 showcased the strategic upside of its diversified model, as the company secured a transformative RADx registry migration that will add over 10 million domains and reinforce high-margin growth in its core domains segment. The business continued to pivot Ting toward a capital-light ISP model, while WaveLo’s disciplined focus on large-scale clients and AI-led engineering efficiency delivered record results. Management’s guidance remains on track, with clear catalysts for further margin expansion and leverage improvement in the second half.
Summary
- Registry Scale-Up: RADx contract will make 2Cows the backend provider for 17 million domains, solidifying registry leadership.
- Operational Discipline: Ting’s transformation to a pure-play ISP is yielding cost and marketing efficiency gains.
- Profitability Focus: Margin expansion and debt reduction remain central as capital constraints shape strategic choices.
Performance Analysis
2Cows delivered its fourth straight quarter of double-digit revenue growth, with all three operating segments contributing to consolidated gains. The domains business, representing the majority of revenue, posted robust top-line and margin expansion, driven by strong wholesale demand and value-added services like expiry auctions. The RADx registry contract, set to migrate over 10 million domains later this year, will significantly expand the registry platform and position 2Cows to benefit from the next wave of new generic top-level domains (GTLDs) applications in 2026.
WaveLo, the telecom software business, delivered its best quarter ever, with revenue and EBITDA up sharply year over year. The focus on larger, enterprise-grade clients and the decision to deprioritize smaller, price-pressured deals have paid off, as has the integration of AI into engineering workflows, which is now generating over 40% of code for top engineers. Ting, the fiber ISP, showed marked improvement in subscriber growth and cost efficiency after a strategic reset that included asset sales, reduced marketing spend, and a sharper focus on profitable segments.
- Domains Margin Leverage: Value-added services gross margin grew 32%, led by expiry stream performance, highlighting operating leverage.
- WaveLo Pipeline Shift: Prioritization of Tier 1 and 2 operators is driving higher-quality revenue and reducing churn risk.
- Ting Cost Reset: Operating expenses at Ting were cut by 60% year over year, with CAC per order improving by nearly 40% and door-to-door sales efficiency up 20%.
Balance sheet discipline was evident, with net debt declining for the fifth straight quarter and capital expenditures kept low as Ting shifts to a partner-driven model. Asset sales in non-core Ting markets provided additional liquidity and further simplified the business mix.
Executive Commentary
"Our transformation from building networks to a pure play ISP is increasingly visible this quarter, particularly in reduced expenses, year over year improvements in adjusted EBITDA and serviceable address totals."
Elliott Noss, President and CEO of 2Cows and Ting
"Looking ahead, we have clear catalysts that give us line of sight to continued margin expansion. These include the 10 million domain radix migration to 2Cows domains starting in November, wave loss, continued momentum of growth, and things pivot to a capital-wide demand-driven model."
Ivan Ivanov, Chief Financial Officer of 2Cows
Strategic Positioning
1. Registry Scale and New GTLD Wave
The RADx contract will vault 2Cows to the forefront of registry infrastructure, as it migrates over 10 million domains representing marquee TLDs like .Online and .Tech. With the recent NXI migration completed and RADx onboarding later this year, 2Cows will manage close to 17 million domains, making it the infrastructure provider of choice for two of the world’s largest registries. This positions the company for a leading role in the 2026 new GTLD application cycle, a critical growth lever for the registry business model, which provides recurring, high-margin revenue for each domain under management.
2. Ting’s Capital-Light Pivot and Marketing Reset
Ting’s shift from network builder to pure-play ISP is unlocking operating leverage, as the company sells non-core assets and partners with infrastructure owners in key markets. The marketing function has been rebuilt with a data-driven approach, leading to lower customer acquisition costs and higher conversion rates. Door-to-door sales are now in-house, boosting efficiency, and AI tools are being deployed to further reduce costs and improve content quality. The company’s focus on capital discipline and profitable growth is clear, even as subscriber momentum is expected to rebound in the second half.
3. WaveLo’s AI-Driven Differentiation
WaveLo’s focus on Tier 1 and 2 telecom operators, coupled with an AI-first engineering culture, is driving both organic and inorganic growth opportunities. The business is deprioritizing smaller, commoditized MVNO deals in favor of larger, transformation projects where its event-driven platform and AI capabilities provide a competitive edge. Management expects industry consolidation and M&A to accelerate as legacy vendors struggle to adapt to SaaS and AI disruption, positioning WaveLo as a consolidator with operational and technological leverage.
4. Balance Sheet Management and Asset Recycling
2Cows is actively managing capital allocation, with net leverage now at 3.14 times and interest coverage at 3.99 times. The company is monetizing non-strategic Ting assets and recycling capital into higher-return opportunities. The decision not to pay down the syndicated loan this quarter reflects a preference for flexibility as strategic options are evaluated, particularly for scaling the Ting business.
5. Industry Positioning and Customer Retention
Ting’s churn metrics remain well below industry norms, and its converged fiber-mobile offering is unique among US ISPs. The company’s ability to retain and grow high-ARPU customers in competitive markets is a key differentiator, but further scaling will require additional capital or partnerships, as the company openly acknowledges balance sheet constraints.
Key Considerations
2Cows’ Q2 results demonstrate the benefits of a diversified, capital-light strategy, but also highlight the importance of execution as industry dynamics shift in fiber, telecom software, and registry markets. Investors should focus on the following:
Key Considerations:
- Registry Migration Execution: Timely and seamless migration of the 10 million RADx domains will be critical for realizing margin and revenue uplift in the domains segment.
- Ting’s Path to Profitability: Sustaining subscriber growth and margin gains as the business pivots away from asset-heavy operations will determine long-term value creation.
- WaveLo’s AI Adoption: Continued integration of AI into engineering and client projects is a potential source of operating leverage and product differentiation.
- Capital Constraints and Strategic Flexibility: The company’s ability to balance debt reduction, investment, and potential M&A will shape its growth trajectory, particularly for Ting.
Risks
Capital constraints at Ting could limit its ability to scale, even as operational metrics improve. The company’s reliance on successful execution of large-scale migrations (such as RADx) introduces operational risk, and industry consolidation in both fiber and telecom software may intensify competition or compress margins. Management’s conservative tone on macro volatility and balance sheet health underscores the need for ongoing prudence.
Forward Outlook
For Q3 2025, 2Cows guided to:
- Continued margin expansion, driven by WaveLo growth and domains migration ramp.
- Further improvement in Ting’s marketing efficiency and subscriber momentum.
For full-year 2025, management maintained guidance:
- Adjusted EBITDA target of $47 million, with the company tracking slightly ahead of pace year to date.
Management highlighted several factors that will shape the second half:
- Successful onboarding of the RADx registry contract and associated revenue recognition.
- Continued focus on cost management, capital allocation, and strategic evaluation for Ting’s long-term capital needs.
Takeaways
2Cows is leveraging domain registry scale, AI-driven telecom software, and a lean ISP model to drive margin expansion and debt reduction, but future growth will hinge on operational execution and capital access.
- Registry Platform Upside: The RADx migration and NXI win position 2Cows as a top-tier registry infrastructure provider, with recurring, high-margin revenue potential and a strong pipeline for the 2026 GTLD cycle.
- Ting Transformation: Cost resets, asset sales, and marketing rebuilds are delivering improved subscriber momentum and margin, but scaling will require new capital or strategic partnerships.
- WaveLo Differentiation: AI-first engineering and focus on large operators are driving record results and positioning the business for industry consolidation opportunities.
Conclusion
2Cows’ Q2 2025 results reinforce the company’s ability to execute across multiple business lines while managing capital prudently. The coming quarters will test its ability to deliver on large registry migrations, sustain Ting’s turnaround, and capitalize on WaveLo’s AI-led momentum, all while navigating industry consolidation and capital allocation challenges.
Industry Read-Through
The RADx and NXI migrations highlight a broader industry shift toward outsourced registry infrastructure, with scale and reliability becoming key differentiators as the next GTLD wave approaches. In telecom software, the accelerating adoption of AI and SaaS models is disrupting legacy vendors, driving M&A and forcing incumbents to adapt or exit. The fiber ISP market is entering a phase of consolidation and operational discipline, with capital-light, partner-driven models gaining traction as infrastructure funds and strategic buyers reevaluate build-versus-buy decisions. These dynamics suggest increased competition, margin pressure, and strategic realignment across domains, telecom, and connectivity sectors.