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Tucows CEO Discusses Q4 2010 Results - Earnings Calls Transcript

Elliot Noss

Thank you, Operator. Good afternoon and thanks for joining us today. With me is Michael Cooperman, Tucows’ Chief Financial Officer. This afternoon’s call will follow our usual format. I will begin with a brief overview of the financial and operational highlights for the fourth quarter and the year. Mike will then review our financial results in more detail and I will return for some concluding comments before opening the call up to questions.

Our financial performance for both the fourth quarter and the year continue to demonstrate the consistency and reliability in our business. Revenue for the quarter grew by 8.6% from the same period of 2009 to $22.1 million, and for the full year grew by 4.5% to 84.6 million, both records.

I will note that each of these was achieved despite the lower contributions from our Email service and Direct Navigation Name sales. And once again, we generated solid cash flow from operations; 2.3 million for the quarter and 6.8 million for the year, up 8% over 2009.

In addition, we had another extremely efficient year for CapEx, which was even lower than the already efficient levels of the previous year.

During the fourth quarter, each of the components of our business continued to perform well. OpenSRS domain services, again experienced year-over-year growth in transaction volumes with total registrations up 11%, renewal transactions up 16%, and new registrations up 2%.

I will note that growth in new registrations was somewhat lower this quarter as a result of two large customers becoming accredited registrar. We continue to do business with each of these customers and there will be a relatively small impact on gross margin dollars.

Outside those two resellers, new registrations continued to reboat the robust year-over-year growth experienced throughout 2010. And again, our renewal rate remains several points above the industry average.

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