Tucows Inc. (NYSE AMEX:TCX, TSX:TC), today reported its financial results for the third quarter ended September 30, 2013 beating EPS estimates by $0.03 and beating revenue estimates by $3.8M.
Shares are trading up over 15% after hours.
Tucows sold a total of $4.167,000 in domain names for the 3rd quarter of 2013 or maybe not.
To be clear Tucows reported portfolio income of $4.1 million which has always consisted of domain name sales but now includes some serious cash they may have gotten from new gTLD strings they sold interests in.
For the same quarter of 2012 Tucows.com only sold a little over $1.5 million dollars in domain names.
According to the financials “Portfolio Income” includes the net amounts received from the previously announced confidential arrangements related to the Company’s withdrawal of its applications under the ICANN New gTLD Program for .media and .marketing. The Company continues to be involved in the ICANN new gTLD Program and holds a minority interest in the contested .online, .group, .tech and .store strings”
Here are the numbers:
All figures are in U.S. dollars.
Summary Financial Results
(In Thousands of US Dollars, Except Per Share Data)
_____________________________________________________________________
| | 3 Months | 3 Months | 9 Months | 9 Months |
| | Ended Sept. | Ended Sept. | Ended Sept. | Ended Sept. |
| | 30, 2013 | 30, 2012 | 30, 2013 | 30, 2012 |
| | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
|_____________|_____________|_____________|_____________|_____________|
|Net revenue | 35,637| 29,246| 96,795| 84,936|
|_____________|_____________|_____________|_____________|_____________|
|Income before| | | | |
|provision for| | | | |
|income taxes | | | | |
|and | | | | |
|change in | 3,565| 1,597| 4,944| 4,956|
|fair value of| | | | |
|forward | | | | |
|exchange | | | | |
|contracts | | | | |
|_____________|_____________|_____________|_____________|_____________|
|Net income | 2,593| 1,635| 3,258| 3,995|
|_____________|_____________|_____________|_____________|_____________|
|Net earnings | $0.06| $0.04| $0.08| $0.09|
|per common | | | | |
|share | | | | |
|_____________|_____________|_____________|_____________|_____________|
|Net cash | 3,664| 2,237| 7,052| 4,321|
|provided by | | | | |
|operating | | | | |
|activities | | | | |
|_____________|_____________|_____________|_____________|_____________|
Summary of Revenues and Cost of Revenues
(In Thousands of US Dollars)
___________________________________________________________________
| | Revenue | Cost of Revenue |
|_____________|_______________________|_____________________________|
| | 3 Months | 3 Months | 3 Months | 3 Months |
| | Ended | Ended | Ended | Ended |
| | Sept. 30, | Sept. 30, |Sept. 30, 2013|Sept. 30, 2012|
| | 2013 | 2012 | (unaudited) | (unaudited) |
| |(unaudited)|(unaudited)| | |
|_____________|___________|___________|______________|______________|
|Wholesale | | | | |
|_____________|___________|___________|______________|______________|
| Domain | 22,003| 22,268| 18,581| 18,645|
|Services | | | | |
|_____________|___________|___________|______________|______________|
| Value-Added| 2,606| 2,603| 484| 532|
|Services | | | | |
|_____________|___________|___________|______________|______________|
|Total | 24,609| 24,871| 19,065| 19,177|
|Wholesale | | | | |
|_____________|___________|___________|______________|______________|
| | | | | |
|_____________|___________|___________|______________|______________|
|Retail | 6,861| 2,965| 4,543| 2,064|
|_____________|___________|___________|______________|______________|
|Portfolio (1)| 4,167| 1,410| 661| 205|
|_____________|___________|___________|______________|______________|
| | | | | |
|_____________|___________|___________|______________|______________|
|Network, | -| -| 1,193| 1,159|
|other costs | | | | |
|_____________|___________|___________|______________|______________|
|Network, | -| -| 176| 193|
|depreciation | | | | |
|and | | | | |
|amortization | | | | |
|costs | | | | |
|_____________|___________|___________|______________|______________|
|Total | 35,637| 29,246| 25,638| 22,798|
|revenue/cost | | | | |
|of revenue | | | | |
|_____________|___________|___________|______________|______________|
(1) Portfolio revenue includes the net amounts received from the
previously announced confidential arrangements related to the
Company's withdrawal of its applications under the ICANN New gTLD
Program for .media and .marketing. The Company continues
to be involved in the ICANN new gTLD Program and holds a minority
interest in the contested .online, .group, .tech and .store strings.
“Our financial results for the third quarter were once again demonstrative of the consistency and reliability in our business, alongside our ability to generate growth, as we delivered our fourteenth consecutive quarter of record revenue, driven by solid performance across our business,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “Each of our Wholesale, Hover and Portfolio businesses continue to perform well.”
“Ting saw another quarter of tremendous customer growth, adding 11,000 accounts and 16,000 devices during the quarter, to bring these totals to 36,000 accounts and 56,000 devices at the end of September. Importantly, we are consistently delivering on our commitment to the very highest levels of customer service, while maintaining our low customer acquisition costs and continuing to generate attractive gross margin. All of this continues to position Ting to achieve breakeven during the fourth quarter this year.”
Net revenue for the third quarter of 2013 increased 22% to a record $35.6 million from $29.2 million for the third quarter of 2012.
Net income for the third quarter of 2013 was $2.6 million, or $0.06 per share, compared with $1.6 million, or $0.04 per share, for the third quarter of 2012.
Net income for the third quarter of 2013 included the benefit of the previously announced confidential arrangements related to the Company’s withdrawal of its applications under the ICANN New gTLD Program for .media and .marketing.
Net income for the third quarter included a gain on foreign exchange contracts of $28,000 compared with a gain on foreign exchange contracts of $0.6 million in the third quarter of 2012. Net income for the third quarter of 2013 also included the incremental investment of approximately $1.2 million made during the quarter for the acquisition and support of Ting customers.
Deferred revenue at the end of the third quarter of 2013 was $72.0 million, a decrease of 2% from $73.3 million at the end of the third quarter of 2012 and a decrease of 1% from $73.0 million at the end of the second quarter of 2013.
Cash and cash equivalents at the end of the third quarter of 2013 were $11.5 million compared with $6.5 million at the end of the second quarter of 2013 and $5.0 million at the end of the third quarter of 2012.
The increase in cash and cash equivalents of $5.0 million when compared to the second quarter of 2013 resulted from the generation of $3.7 million in cash flow from operations and the receipt of $2.2 million from the exercise of stock options.
These were 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.
