For your viewing pleasure, we've posted a larger version of the screencast (it's a QuickTime video) from yesterday's article, Introducing the Next Generation of Tucows' Email Service off our new and improved Tucows Email Service. Click the image above to watch it!

[Updated May 24th, 2007: We've included a link to a larger version of the screencast.]

Today is a big day. We’re thrilled to announce the next evolution of our Tucows Email Service.

Building on our experience providing millions and millions of mailboxes to service providers around the globe, we’ve made a number of innovations in this latest version that have resulted in a truly outstanding hosted email service.

The first is our back-end technology that has been designed to provide rock-solid reliability, the ability to grow to meet demand from our customers and their end-users, and for easy integrations.  You can read about ‚Äúwhat‚Äôs under the hood‚Äù of our email service in an earlier post by Joey.

And of course, we’ve built our service from the ground up to meet the needs of service providers. It includes a web-based branding tool so a service provider can take our completely white-labeled service and make it his own. It also has additional tools for our Tier II Support team, meaning speedier resolutions, often at first call.

Our most significant development is in our new web mail interface (POP and IMAP are available too.) By working with Nitido, we have developed a web mail interface that competes with the leading free web mail providers.

I believe showing is better than telling, so we did a short screencast to introduce you to our new webmail. A small version appears below, and you can click here to see a larger version [QuickTime required].

You can read more about the new Tucows Email Service over on our site.

If you‚Äôre an existing customer, please log into the RRC or RWI  to gain access to our Test environment where you can evaluate the service. If you‚Äôre a new customer please contact our Sales team.

We believe service providers have a unique opportunity to offer our web mail to their customers. When matched with Tier I customer support it becomes a retention tool, not just an after-thought when bundling services.

We all know email is a highly-“sticky” service. Thinking about my own email usage, I have an ISP that I have used since university for my personal email (yes of course, they are a Tucows reseller ☺), I also have a handful of free web mail accounts that I use for personal email, subscriptions, and while traveling and away from my home and work computers.

Until the advent of next-generation AJAX-based web mail I always pop’d my email through Outlook or another local mail client. For me, regular use of web mail wasn’t an option. It was too clunky and slow and didn’t give me the features I needed to manage my personal information.

Of course that’s all changed. And I think Service Providers have an opportunity to use competitive web mail as a value-added service.

It seems like a no brainer to me. Service Providers are running email anyway, and by offering a competitive web mail experience, you can reduce your support costs by not having to explain POP or IMAP setups for every individual. You can just set them up, point them to the web and be there to support them if they have any issues.

The numbers show web mail use is on the rise. According to Charlene Li of Forrester, the number of users who use web mail once a week is up 4% from 27% to 31% in just one year. That’s a big jump, and I think we can attribute that to the increased use of the free web mail services.

As web hosting companies and ISPs look to retain customers, offering competitive value-added services like our web mail is a an opportunity to leverage leading-edge technology without making the upfront investment in development and ongoing investment in running an email system.

So, check it out, we're pretty excited, and we hope you like it!

Email service tailored specifically to the needs of web hosting companies and ISPs

TORONTO, May 23 /CNW/ – Tucows Inc. (AMEX:TCX, TSX:TC), a leading provider of Internet services to web hosting companies and ISPs worldwide, has unveiled the next generation of its Tucows Email Service.
Read the rest of this entry »

Quarter Highlighted by Solid Financial Performance, Including Record Revenue, Record Adjusted Net Income and Continued Strong Cash Flow Generation

TORONTO, May 10 /CNW/ – Tucows Inc. (AMEX:TCX, TSX:TC), a leading provider of Internet services to web hosting companies, ISPs and other service providers worldwide, today reported its financial results for the first
quarter of fiscal 2007, ended March 31, 2007.

Highlights for the first quarter included:

• A 16% year-over-year increase in net revenue to a record $17.8 million
• A 62% year-over-year increase in adjusted net income to a record $2.4 million
• Net income of $0.7 million
• Cash flow from operating activities of $1.2 million
• A 17% year-over-year increase in deferred revenue to a record $48.0 million.

“The first quarter of 2007 was highlighted by another solid financial performance,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “We continue to grow our business by using our wholesale channel to deliver Internet services like domain names and email that are critical to our service provider customers. As our business scales, the leverage in our business becomes more and more apparent. We expect to see continued growth as we move forward.”

“The first quarter puts us on track to meet our announced target of $10-12 million in cash flow from operations for 2007,” said Noss. “We continue to expect domain registration revenue to grow in the low double digits and remaining revenue to grow at higher rates. We expect that operating expenses will only increase at about half the rate of gross profit.”

Summary Financial Results
(Numbers in Thousands of US Dollars, Except Per Share Data)

	Three Months Ended March 31, 2007	Three Months Ended March 31, 2006
Net Revenue	17,771	15,287
EBITDA	1,971	434
Adjusted Net Income	2,442	1,506
Net Income	750	(157)
Net Income/Share	0.01	0.00
Cash Flow from Operations	1,165	1,834

Cash, short-term investments and restricted cash at the end of the first quarter of fiscal 2007 was $6.6 million compared to $7.3 million at the end of the fourth quarter of fiscal 2006 and $11.8 million at the end of the first quarter of fiscal 2006. The decrease compared to the end of the fourth quarter of fiscal 2006 is primarily the result of the use of $1.3 million for the repurchase of the Company’s shares under its previously announced stock buyback program and the use of $1.2 million to purchase hardware to support the hosted email services business, which were partially offset by the generation of cash flow from operations of $1.2 million during the first quarter of fiscal 2007.

Net revenue for the first quarter of fiscal 2007 increased 16% to $17.8 million from $15.3 million for the first quarter of fiscal 2006. The increase was the result of growth across all areas of the business.

	Revenue		Cost of Revenue (excluding Network costs)
	Three Months Ended March 31, 2007	Three Months Ended March 31, 2006	Three Months Ended March 31, 2007	Three Months Ended March 31, 2006
Domain Names, Excluding Domain Direct	11,901	10,667	8,782	7,675
Other Internet Services, Including Domain Direct	4,400	3,776	1,015	932
Sale of Domain Names	82	-	-	-
Advertising and Other Revenue	1,388	844	52	-
Total	17,771	15,287	9,849	8,607

Adjusted net income for the first quarter of fiscal 2007 increased to $2.4 million from $1.5 million for the corresponding quarter of last year. Net income for the first quarter of fiscal 2007 was $0.7 million, or $0.01 per share, compared with a net loss of $0.2 million, or $0.00 per share, for the first quarter of fiscal 2006. Included in net income and adjusted net income for the first quarter of fiscal 2007 is a gain on foreign exchange of $51,000 compared with a loss on foreign exchange of $88,000 for the corresponding quarter of fiscal 2006.

Deferred revenue at the end the first quarter of fiscal 2007 was $48.0 million, an increase of 17% from $41.1 million at the end of the first quarter of fiscal 2006 and an increase of 6% from $45.1 million at the end of the fourth quarter of fiscal 2006.

This release may contain forward-looking statements, relating to the Company’s operations or to the environment in which it operates, which are based on Tucows Inc.’s operations, estimates, forecasts and projections. These statements are not guarantees of future performance and are subject to important risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate or differ materially from actual future events or results. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, investors should not place undue reliance on these forward-looking statements, which are based on Tucows Inc.’s current expectations, estimates, projections, beliefs and assumptions. These forward-looking statements speak only as of the date of this presentation and are based upon the information available to Tucows Inc. at this time. Tucows Inc. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Conference Call

Tucows will host a conference call today, Thursday, May 10, 2007, at 5:00 p.m. (ET) to discuss the Company’s first quarter fiscal 2007 results. To access the conference call via the Internet go to http://tucowsinc.com, and click on “Investor Relations.”

For those unable to join the conference call at the scheduled time, it will be archived for replay both by telephone and via the Internet beginning approximately one hour following completion of the call. To access the archived conference call by telephone, dial 1-877-289-8525 or 416-640-1917 and enter the pass code 21228036 followed by the pound key. The telephone replay will be available until Thursday, May 17, 2007, at midnight. To access the archived conference call via the Internet, go to http://tucowsinc.com and click on “Investor Relations.‚Äù

About Tucows

Tucows Inc. (AMEX:TCX, TSX:TC) provides Internet services and download libraries through a global distribution network of over 7,000 service providers. This distribution network primarily consists of web hosting companies, ISPs (Internet Service Providers) and other Internet related service companies. These companies use Tucows’ provisioned services to offer solutions to their customers: enterprises, small and medium businesses and consumers. Tucows is an accredited registrar with ICANN (the Internet Corporation for Assigned Names and Numbers) and earns most of its revenue from domain name registration services plus hosted email, spam and virus protection, Blogware, website building tools, the Platypus Billing System and digital certificates. For more information, please visit: www.tucowsinc.com

Contact:
Leona Hobbs
Director, Communications
Tucows Inc.
416-538-5450
ir@tucows.com

TUCOWS is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

Consolidated Balance Sheets
Consolidated Statements of Operations
Reconciliation of EBITDA and Adjusted EBITDA

Consolidated Statements of Cash Flows

Tucows Inc. Consolidated Balance Sheets (Dollar amounts in U.S. dollars) (unaudited)
		March 31 , 2007		December 31, 2006
Assets
Current assets:
Cash and cash equivalents	$	$5,819,984	$	$6,256,392
Restricted cash		767,785		1,019,423
Accounts receivable		3,822,620		2,969,997
Prepaid expenses and deposits		3,121,863		2,394,627
Prepaid domain name registry and other Internet services fees, current portion		23,708,449		22,168,558
Deferred tax asset, current portion		1,000,000		1,000,000
Total current assets		38,240,701		35,808,997
Prepaid domain name registry and other Internet services fees, long-term portion		9,952,103		9,511,341
Property and equipment		6,740,768		5,647,532
Deferred tax asset, long-term portion		2,000,000		2,000,000
Intangible assets		18,286,331		18,554,436
Goodwill		12,184,867		12,094,817
Investment		353,737		353,737
Cash held in escrow		-		694,579
Total assets	$	87,758,507	$	84,665,439
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,221,473	$	2,867,814
Accrued liabilities		2,999,362		2,567,012
Customer deposits		2,968,995		3,144,119
Deferred revenue, current portion		33,787,876		31,658,081
Accreditation fees payable, current portion		841,928		847,325
Total current liabilities		43,819,634		41,084,351
Deferred revenue, long-term portion		14,245,655		13,478,525
Accreditation fees payable, long-term portion		168,677		163,988
Promissory note payable		6,000,000		6,000,000
Deferred tax liability		5,396,000		5,396,000
Stockholders’ equity:
Preferred stock – no par value, 1,250,000 shares authorized; none issued and outstanding		-		-
Common stock – no par value, 250,000,000 shares authorized; 74,713,234 shares issued and outstanding at March 31, 2007 and 75,978,502 shares issued and outstanding at December 31, 2006		15,282,470		15,395,381
Additional paid-in capital		49,309,088		50,359,906
Deficit		(46,463,017)		(47,212,712)
Total stockholders’ equity		18,128,541		18,542,575
Total liabilities and stockholders’ equity	$	87,758,507	$	84,665,439

Tucows Inc. Consolidated Statements of Operations (Dollar amounts in U.S. dollars) (unaudited)
	Three months ended March 31,
	2007		2006
Net revenues	$	17,771,217	$	15,287,120
Cost of revenues:
Cost of revenues (*)		11,232,789		9,927,854
Depreciation of property and equipment		809,666		524,919
Amortization of intangible assets		63,532		38,540
Total cost of revenues		12,105,987		10,491,313
Gross profit		5,665,230		4,795,807
Operating expenses:
Sales and marketing (*)		1,344,444		1,459,156
Technical operations and development (*)		1,812,279		2,320,716
General and administrative (*)		1,498,769		1,619,053
Depreciation of property and equipment		61,524		37,050
Amortization of intangible assets		233,301		93,293
Total operating expenses		4,950,317		5,529,268
Income (loss) from operations		714,913		(733,461)
Other income (expenses):
Interest income (expenses), net		(41,649)		102,891
Other income		88,431		473,606
Total other income		46,782		576,497
Income before provision for income taxes		761,695		(156,964)
Provision for income taxes		12,000		-
Net income (loss) for the period	$	749,695	$	(156,964)
Basic earnings per share	$	0.01	$	(0.00)
Shares used in computing basic earnings per common share		75,459,822		71,980,393
Diluted earnings per share	$	0.01	$	(0.00)
Shares used in computing diluted earnings per common share		77,959,165		71,980,393
(*) Stock-based compensation has been included in operating expenses as follows:
Cost of revenues	$	2,500	$	2,400
Sales and marketing	$	14,200	$	17,400
Technical operations and development	$	20,100	$	23,700
General and administrative	$	25,900	$	26,700

Tucows Inc. Reconciliation of EBITDA and Adjusted EBITDA (Dollar amounts in U.S. dollars) (unaudited)
	Three months ended March 31,
	2007		2006
Net income (loss) for the period	$	749,695	$	(156,964)
Depreciation of property and equipment		871,190		561,969
Amortization of intangible assets		296,833		131,833
Interest income(expense), net		41,649		(102,891)
Provision for income taxes		12,000		-
EBITDA		1,971,367		433,947
Adjustments to EBITDA (1)
Change in prepaid fees for domain name registry and other Internet services fees		(1,980,653)		(2,313,048)
Change in deferred revenue		2,896,925		3,044,520
Dividend income		(88,431)		-
Transitional costs		-		814,263
Other income		-		(473,606)
Reversal of contingencies		(357,500)		-
Subtotal Adjustments to EBITDA		470,341		1,072,129
Adjusted Net Income	$	2,441,708	$	1,506,076
(1) Adjustments to EBITDA
We define Adjusted EBITDA as net income adjusted for depreciation, amortization, interest, taxes and further adjusted for certain cash and non-cash charges. For the three months ended March 31, 2006, we incurred $814,263 of transitional costs in connection with our acquisition of the Hosted Messaging assets of Critical Path. In addition, during the three months ended March 31, 2006, we received $473,606 in connection with settlements related to patents we acquired in the merger with Infonautics in 2001. The net amount of cash we collected for domain registrations and other Internet services paid for the full term at the time of activation and deferred, amounted to $916,272 for the three months ended March 31, 2007 compared to $2,896,925 for the three months ended March 31, 2006.

Tucows Inc. Consolidated Statements of Cash Flows (Dollar amounts in U.S. dollars) (unaudited)
	Three months ended March 31,
	2007		2006
Cash provided by (used in):
Operating activities:
Net income(loss) for the period	$	749,695	$	(156,964)
Items not involving cash:
Depreciation of property and equipment		871,190		561,969
Amortization of intangible assets		296,833		131,833
Unrealized change in the fair value of forward exchange contracts		(216,789)		182,944
Stock-based compensation		62,700		70,200
Change in non-cash operating working capital:
Interest receivable		-		37,594
Accounts receivable		(852,623)		(1,827,642)
Prepaid expenses and deposits		(727,236)		3,413
Prepaid fees for domain name registry and other Internet services fees		(1,980,653)		(2,313,048)
Accounts payable		(408,137)		492,667
Accrued liabilities		649,139		1,327,080
Customer deposits		(175,124)		147,834
Deferred revenue		2,896,925		3,044,520
Accreditation fees payable		(708)		131,264
Cash (used in) provided by operating activities		1,165,212		1,833,664
Financing activities:
Proceeds received on exercise of stock options		101,071		28,009
Purchase of Shares		(1,327,500)		-
Cash (used in) provided by financing activities		(1,226,429)		28,009 s
Investing activities:
Cost of domains acquired		(28,728)		-
Additions to property and equipment		(1,202,630)		(886,279)
Decrease in investment in short-term investments		-		1,699,569
Decrease (increase) in restricted cash – being margin security against forward exchange contracts		251,638		(552,500)
Acquisition of Hosted Messaging Assets, net of cash acquired		(90,050)		(6,583,454)
(Increase) decrease in cash held in escrow		694,579		(1,766,504)
Cash used in investing activities		(375,191)		(8,089,168)
Decrease in cash and cash equivalents		(436,408)		(6,227,495)
Cash and cash equivalents, beginning of period		6,256,392		17,348,088
Cash and cash equivalents, end of period	$	5,819,984	$	11,120,593
Supplemental cash flow information:
Interest paid	$	105,000	$	-
Non-cash investing activity
Capital assets acquired during the period not yet paid for		1,146,066		-
Dividend receivable		88,431		-