Tucows Reports: Revenue Up 11% But Misses on Earnings & Revenue


Tucows Inc. (NASDAQ:TCX, TSX:TC), reported its financial results for the fourth quarter ended December 31, 2013.

Although Tucows revenue increased 11% but missed by $0.98M. off of estimates

Summary Financial Results

All figures are in U.S. dollars.

(In Thousands of US Dollars, Except Per Share Data)

                   3 Months        3 Months        12 Months       12 Months 
                 Ended    Dec.   Ended    Dec.   Ended    Dec.   Ended    Dec. 
                  31, 2013        31, 2012        31, 2013        31, 2012 
                  (unaudited)     (unaudited)     (unaudited)     (unaudited) 
Net revenue             33,139          29,791         129,935         114,727 
Income before 
 provision for 
 income taxes 
 and  change 
 in fair value 
 of forward 
 contracts               1,532             789           6,476           5,745 
Net income                 923             429           4,180           4,424 
Net earnings 
 per common 
 share(1)                $0.08           $0.04           $0.40           $0.39 
Net cash 
 provided by 
 activities              1,651           2,022           8,703           6,343 

   1. Net earnings per common share reflects the 1-for-4 reverse split of 
      common shares that became effective December 31, 2013.  As a result of 
      the reverse split, 10,900,842 shares and 11,064,045 shares were used in 
      computing net earnings per common share for the 3 months ended December 
      31, 2013 and 2012, respectively, and 10,468,250 shares and 11,458,216 
      shares were used in computing net earnings per common share for the 12 
      months ended December 31, 2013 and 2012, respectively.

Summary of Revenues and Cost of Revenues

(In Thousands of US Dollars)

                                                    Cost of         Cost of 
                   Revenue         Revenue          Revenue         Revenue 
                   3 Months        3 Months 
                 Ended    Dec.   Ended    Dec.  3 Months Ended  3 Months Ended 
                  31, 2013        31, 2012       Dec. 31, 2013   Dec. 31, 2012 
                  (unaudited)     (unaudited)     (unaudited)     (unaudited) 
  Services              21,595          22,391          17,949          18,893 
  Services               2,417           2,705             548             456 
 Wholesale              24,012          25,096          18,497          19,349 

Retail                   8,027           3,628           4,966           2,454 
Portfolio                1,100           1,067             143             201 

Network, other 
 costs                       -               -           1,120           1,296 
 costs                       -               -             175             187 
 of revenue             33,139          29,791          24,901          23,487

“Our financial results for the fourth quarter once again underscore not only the consistency and reliability in our business but also our continued ability to generate sustainable growth,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “In the domains component of our business, we continue to see solid performance from both our Wholesale and Portfolio services, while our retail channel, Hover, delivered another quarter of 20%-plus year-over-year top-line growth.”

“For the seventh straight quarter, Ting set new records for net adds, adding more than 12,000 accounts and 18,000 devices. We ended the year with over 48,000 accounts and 74,000 devices and, in January, surpassed the 50,000 accounts and 80,000 devices milestone.

Ting continues to be on track to positively contribute to EBITDA for 2014, although our priority will continue to be aggressive investment in customer acquisition and customer satisfaction to ultimately drive even greater long-term value for shareholders.”

Net revenue for the fourth quarter of 2013 increased 11% to $33.1 million from $29.8 million for the fourth quarter of 2012.

Net income for the fourth quarter of 2013 was $0.9 million, or $0.08 per share (based on the number of shares post-reverse split), compared with $0.4 million, or $0.04 per share (based on the number of shares post-reverse split), for the fourth quarter of 2012.

Cash and cash equivalents at the end of the fourth quarter of 2013 were $12.4 million compared with $11.5 million at the end of the third quarter of 2013 and $6.4 million at the end of the fourth quarter of 2012. The increase in cash and cash equivalents of $0.9 million when compared to the third quarter of 2013 resulted from the generation of $1.7 million in cash flow from operations, which was partially offset by the use of $0.6 million for principal repayments under the Company’s credit facility and investment of $0.2 million in equipment purchases.

German Court Says Registrars Are Responsible for Content on a Website

A ruling came out of Germany that could make registrars have to do a lot more work to earn their pay. Loek Essers wrote an article today on PC Advisor covering the case of Universal Music vs Key-Systems.

A domain name registrar can be held liable for the copyright infringements of a website it registered if it is obvious the domain is used for infringements and the registrar does nothing to prevent it, the Regional Court of Saarbrücken in Germany has ruled.

Universal had wanted to prevent unauthorized distribution of Robin Thicke’s album Blurred Lines, said Volker Greimann, Key-Systems’ general counsel, in an email.While Key-Systems argued that it was not responsible for the copyright infringement, the court ruled that the registrar had a duty to investigate after notification of infringing activity and had to take corrective action in case of obvious violations, Greimann said.

If someone notifies the registrar of a clear violation of the law, it must examine the specific allegation immediately and close the domain if necessary, the court ruled.

If Key-Systems ignores this ruling it faces a maximum fine of €250,000 (US$339,000).

This ruling will certainly open the door to more companies going after registrars to take down and police content or lose a lot of money. In the article counsel for Key Systems said that if the ruling is not over turned this could lead possibly to the whole business model being endangered.

Read the full story on PC Advisor

Go Daddy Tightens Security After @N Debacle

In another move related to the social engineering that took place at Go Daddy and allegedly Paypal (Paypal stands by the position they did not give the hijacker anything and that it was a failed attempt) Go Daddy is now changing their security practices.

In a tweet on Saturday there was an exchage from the former owner of @N and Go Daddy, he is also a former Go Daddy client as he tweeted yesterday that he has moved his names to Namecheap.

Tech Crunch covered the story:

We spoke to @N, known to most as Naoki Hiroshima, after the fact and and he detailed a few things that GoDaddy should do to tighten its security, methods that might have helped protect his account:

“[Two factor authentication] can’t prevent this from happening again,” says Hiroshima. “GoDaddy allowed the guy to reset everything over the phone. As long as a company only uses the last 4 digits of a [credit card] to verify [identity], this will keep happening. They should ask multiple questions.”

GoDaddy has made steps that mirror what Hiroshima felt was needed. In a tweet today, the company said the following:

@N_is_stolen Will do. We now require 8 card digits, lock after 3 attempts and deal with 2-factor authentication accounts differently. ^NF

Epic Bet: Name.com Vs. Enom Who You Got?

Rightside, Enom and Name.com  is involved in an  epic bet between our eNom office in Seattle and our Name.com office in Denver.

“So not only will this Sunday spell a showdown for Russell vs. Peyton, but for Registar’s eNom vs. Name as well.”

Below I’ve posted blog and video links offering the details of our #BigBowlBet.

We’ll have videos coming all week leading up to Sunday!

So we are opening the poll up for your picks

Rightside’s video

Name.com statement

The Video: http://www.youtube.com/watch?v=XOS0HM-61AE

eNom’s take

So whom do you like in the big game?

You can vote on the right for your pick.

If you want bragging rights go ahead and pick the score.

22.CN Joins SedoMLS Continuing the Network’s Asian Expansion


Sedo announced a few minutes ago that 22.cn joined their SedoMLS. As demand for domains in Asia grows this is certainly a smart decision to keep building their network with Asian registrars. Recent auctions for premium .CN domains previously reserved by CNNIC have shown demand is strong in the region.

22.cn Joins SedoMLS, Continuing the Network’s Asian Expansion

Sedo, the world’s largest domain marketplace and monetization provider, today announced that Chinese registrar 22.cn has joined the SedoMLS Premium partner network. SedoMLS is the world’s only global domain distribution network, making it easy for buyers around the world to purchase premium domains from Sedo’s inventory of over 18 million.

“It is mutually beneficial for 22.cn to join SedoMLS since 22.cn’s customers are able to directly purchase domains all over the world”, said Jianguo He, CEO of 22.cn. “Dealing with multiple currencies or language barriers are no longer a limiting factor. Meanwhile, domains owned by 22.cn’s customers can also be displayed to the world to increase the domain inventory. 22.cn is expecting to achieve a win-win result by improving the user experience and increasing the total amount of transactions.”
“By adding new registrars to the SedoMLS Premium network, we are offering our customers an even greater chance of making a sale to the right end user, regardless of their location,” said Sedo’s CEO Tobias Flaitz. “The Chinese market is the fastest-growing in the world, which is why Sedo recently launched its Chinese website. We look forward to using our new site, as well as our partnership with 22.cn and other Chinese registrars, to bring premium domains to end users across the world.”

About 22.cn
Hangzhou Aiming Network Co.,Ltd (22.cn) is a very famous domain name registrar in China, which has already approved accreditation by ICANN and CNNIC. Currently, there are approximately one million domains under their management (including gtlds and cctlds). With a rich domain name experience and strong technology, 22.cn is committed to providing quality services for domain registration, domain backorders, domain escrow, domain transaction, domain auctions and domain brokerage.

About SedoMLS
The SedoMLS Promotion Network is the largest domain distribution network, with 650 global sales partners, including Network Solutions, Tucows, Moniker and other top registrars. It supports more TLDs than any other domain distribution network, and provides its registrar partners with a new revenue stream. SedoMLS partners display matches from Sedo’s unique inventory. Some partners redirect potential buyers to Sedo.com to continue with the purchase, while others allow buyers to purchase a name directly by searching for it, adding it to their shopping cart, and completing the partner’s online checkout page.

About Sedo
Sedo, an acronym for “Search Engine for Domain Offers,” is the leading domain marketplace and monetization provider. Headquartered in Cologne, Germany and with offices in London, England and Cambridge, Mass., Sedo has assembled the world’s largest database of domain names for sale, with more than 18 million listings. The success of Sedo’s model has attracted a global base of more than 2 million members.