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Tucows' CEO Discusses Q1 2011 Results - Earnings Call Transcript

Stocks in this article: TCX

Elliot Noss

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

Our financial performance for the first quarter of 2011 was again demonstrative of the consistency and reliability in our business. Revenue grew by just over 10% from Q1 of last year to a record $22.6 million. Once again, we generated solid cash flow from operating activities at $1.6 million.

Each of the components of our business continued to perform well in the first quarter. Year-over-year growth in OpenSRS domain transaction volumes was 6% excluding the impact of the customers discussed last quarter, new registrations were up almost 15% and renewal registrations were up 10%, with our renewal rate remaining solidly above the industry average.

Domains under management grew almost 10% from Q1 of last year to just shy of $11 million and subsequent to the end of the quarter crossed the $11 million name threshold. All of this, contributed to year-over-year growth in domain services revenue of 14%.

Again this quarter we continued to win business. Our company-wide focus on wholesale continues to benefit us as does our persistence. One of these customer wins has been in the pipeline for nearly four years proving how this business is all about building and keeping relationships. The recent momentum in email, including the customer wins that I discussed on our last call, contributed to the strongest quarter for this service offering in more than a year, highlighted by year-over-year revenue growth of 7.4% and sequential revenue growth of 29%. We have also now had a customer launch email for the first time and grow organically from nothing to over 10,000 mailboxes another very positive sign.

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