Good afternoon ladies and gentlemen. Welcome to Tucows Inc.'s First Quarter 1012 Conference Call. Earlier this afternoon Tucows issued a news release reporting the financial results for the first quarter. That news release and the financial statements are available on the company's website at tucowsinc.com under the investors heading. Please note that today's call is being broadcast live over the internet and will be archived for replay both by telephone and via the internet beginning approximately 1 hour following the completion of this call. Details on how to access the replays are available in today's news release as well as Tucows’ website. Before we begin let me remind you that matters the company will be discussing include forward looking statements and as such are subject to risks and uncertainties that can cause the actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC. Specifically, the most recent report on form 10K and form 10Q. The company urges you to read its security filings for a full description of the risk factors available for this business. I would now like to turn the call over to Tucows’ President and Chief Executive Officer, Mr. Elliot Noss. Please go ahead Mr. Noss.

Thank you, Operator. With me is Michael Cooperman our Chief Financial Officer. I'll begin today with a brief overview of the financial and operational highlights for the quarter. Mike will then review our financial results in more detail. Then I will return with some concluding comments before opening the call up to questions. Q1 was another solid quarter for Tucows and our results again, underscore the growth consistency and reliability in our business. We saw growth across all the areas of our business and generated strong cash flow from operations. We recorded our 8th consecutive quarter of record revenue at $27.5 million, up 22% from the same quarter of last year. Cash provided by operating activities was $2.1 million, up significantly, from $0.8 million for Q1 last year. While already a strong quarter, I will note that Q1 did benefit from items that while typical in the course of a year stand out in the course of a quarter. An unusually high level of sales of gems from our domain portfolio and marketing funds we receive from domain registries that were front-end loaded. Importantly, Q1 was quarter in which you can really see the leverage in our business. Growth in revenue and gross margin far exceeded growth and operating expenses. Typically, we look, for at least $0.50 of every of incremental dollar in billed gross margin to drop to the bottom line. This year, our leverage was much better. Before I walk through more highlights of the quarter, I will note, that we changed the way in which we classify the different sources of revenue in our disclosure. Beginning this quarter, we are breaking up revenue and gross margin by wholesale, retail, and portfolio. We believe this realignment better reflects the manner in which revenue is generated and the way in which management currently assesses the business. More specifically wholesale, which includes the OpenSRS Domain Service and other value-added services, which are, email, digital certificates and ISP billing software. Also, now includes revenue generated from the Domain Name Expiry Stream. These were previously included in YummyNames. Retail includes Hover, as well as the current Ting offering. Portfolio includes the resale names from our domain names portfolio and advertising revenue from those names. Both of which, were previously included under YummyNames, as well as our two advertising supported websites, which were previously discussed as Butterscotch. Beginning with wholesale, Q1 was another solid quarter for domain service transactions which up 21% from Q1 of last year to another record at more than $2.4 million. Domain service revenues increased 19% year over year. Growth in, both, new registrations and renewed registrations, was strong, at 24% and 21%, respectably. We, also, saw healthy sequential growth in overall transactions volume at 15%. Renewal rates continue to be strong and take up slightly at 76%, remaining above the industry average. Total domains under management at the end of Q1 were up 9% from the same point last year and surpassed the 12 million mark for the first time. As I mentioned a moment ago, revenue generated by sales and advertising from our Domain Expiry Stream, is now being included in our wholesale numbers. Our Expiry Stream business had a very good quarter in Q1. Sales of bulk direct-navigation names almost doubled from Q1 of last year, benefiting from the addition of a secondary partner. Advertising revenue from park domains, from both expiry and portfolio, continue to improve. Moving to retail, Hover revenue increased more than 30% year-over-year and almost 10% sequentially. Hover continues to show excellent customer growth and strong renewal performance. New transactions, which include new domains, transfers and email accounts experienced solid growth of 30% year over year and 27% sequentially. Renewal rates continue to impress. Our great support and simple, useful website are both amplified by our customers through social media. We continue to attract new customers away from our competitors. The ratio of transfers-in to transfers-out climbed even higher then Q4, reaching well over 5 to 1. Given our role as the largest wholesaler, we well understand how impressive that transfer ratio is. Ting, the other component of our retail numbers, formally launched to the public February 1st and is off to a strong start. There is one important point that I would like to bring to investors attention about the way we will discuss Ting's performance in the future. We essentially sell our phones for what we pay for them or slightly less. We don't subsidize our devices the way our competitors do and our service is fairly priced. When you combine these things, it is the case that for the foreseeable future, certainly for more than a year, the revenue from equipment sales will swamp service revenue. At some point in the future, when we're talking about Ting revenue or growth in revenue, we will completely ignore the contribution from equipment. This is different from most carriers, where phones are a small component of revenue and a large component of marketing costs. Due to accounting rules you will see equipment sales as part of our reported revenue. However, we are just going to focus on metrics around recurring monthly service revenue. As is our practice, we like our investors and potential investors to understand where we make money, not top line growth. Looking at the quarter, there is one big success for Ting that I would like to discuss. We think it is the most important success that we could have. That is that people love Ting. Our pricing innovations are on tethering minutes, messages and megabytes, involving multiple devices on the same plan and allowing for variability in usage. As our approach is novel, there is no significant competitive data available. We had hoped that we would provide real savings for 90% of U.S. postpaid mobile users and based upon early returns, our customers are telling us we have succeeded. Customers are also having a great experience from a service prospective, everything from customer support, to the web app, to delivery, to the overall feel of the communications and the relationship with the company. We are in this business for the long term and that means the most important thing is that in the short term, is that we have the service right. This certainly appears to be the case. Sales are just fine, but we are more thrilled with how customers are responding. One final point on Ting before I move on, following on the success we have with Hover, we are very focused on leveraging social marketing for Ting. Things like sponsorship of podcasts and intelligent use of social media. As a result for investors who really want to understand how Ting is doing, the two best ways are to go to the Ting Facebook page and to watch how Ting is discussed on Twitter. Any investor, who is interested, should contact me and I can walk them through this. Or you can simply go to the "People Love Ting" page on the Ting website. We believe Ting is an example of the ideal Tucows service offering, one that was launched with little CapEx or impact on ongoing costs, and one that will generate steady, incremental growth and revenue and gross margin, increasing its contribution to the business period after period after period. I often use the analogy of a snowball with investors. Ting in fact is even a little bit better than our other services because most of those are based on annual subscriptions and Ting customers pay monthly. Moving to portfolio, Q1 was a record quarter for individual domain sales from our portfolio, with sales of gems being especially strong. Revenue increased 61% year-over-year. On previous calls I have discussed the success of our efforts to increase the average selling price [inaudible] of brandables and gems, and we saw this again in Q1 as we achieved another record average selling price, and our largest ever number of transactions in excess of $10,000. I'd like to remind you of my comment earlier that we did have a disproportionately large amount of gem sales in Q1, which we expect to even out over the year. Finally, a brief note on the new top level domain name program. The original target set by ICANN were for applications to close on April 12th, and for all applicants and applications to be made public by May 1st. Due to technical difficulties that have been quite public, those dates have not been met, and the exact dates are still to be determined. We had expected to share some information on this call, but given the change in dates we will not be doing so. In summary, Q1 was a typically solid Tucows quarter; efficient growth, strong EBITDA, and healthy cash flow generation. When our business is operating as it should, it's the type of result we should be delivering quarter-after-quarter. I would now like to turn the call over to Mike to review our financial results for the quarter in greater detail. Mike.

Thanks Elliot. Net revenue for the first quarter of 2012 grew by $4.9 million or 22% to a record $27.5 million, from $22.6 million for the same quarter of last year. Cost of revenues before network costs was $19.3 million, an increase of $3.6 million, or 23%, from $15.7 million. Gross margin before network costs increased $1.4 million or 21% to $8.3 million from $6.9 million for the same quarter of 2011. As a percentage of net revenue, gross margin was unchanged at 30%. I'd now like to highlight our gross margin performance for each of our service offerings. As Elliot discussed, we are now breaking out our gross margin performance into three distinct service categories: wholesale, retail and portfolio. We took this step to better reflect the manner in which our revenue streams are generated and assessed by management. First, wholesale services. Wholesale services continued to generate over 60% of our gross margin primarily from provisioning domain services and supplying other value-added services such as hosted email, [inaudible] services and the sale of domain names and advertising from the OpenSRS Expiry Stream which I will note, we previously included in our disclosure as part of YummyNames. Gross margin for wholesale services increased by $950,000 or 20%, to $5.7 million from 4.7 million. The increase was primarily the result of continued strong growth from domain name services as well as from a higher level of development market funds we received from vendors during the quarter, which I will discuss in a moment. As a percentage of revenue, gross margin from wholesale services was unchanged from the first quarter last year at 24%. Gross margin for the domain services component of wholesale serviced increased by $520,000 or 18% to $3.5 million. A result of higher transaction volumes from existing customers, a contribution of the EPAG acquisition that we completed during the third quarter of last year and the impact of programs our vendors run to expand their market share. I will note that these programs are entirely discretionary and thus may not be repeatable. Gross margins for other value-added services component of wholesale services increased $429,000 or 24% to $2.2 million from $1.8 million. The increase primarily reflects the improved results we have been achieving through our relationship with our current Expiry Stream partner that we migrated to at the end of the second quarter last year. Gross margins from retail services which is primarily composed of services we sold through our Hover 18 websites, increased $144,000 or 19% to $920,000 from $776,000. The increase is the result of the continued success of the initiatives we have taken to attract new customers and to retain existing ones. As a percentage of revenue however, retail services gross margin decreased to 50% from 65%. This decrease primarily relates to the impact of the sale Ting phones which we sell at slightly below cost. Gross margin from our third quarter revenue stream portfolio increased $317,000 or 23% to $1.7 million from $1.4 million. The increase is primarily the result of a strong for individual name sales especially gems as Elliott discussed earlier. Sales of domain name from our portfolio totaled $1.4 million compared to $800,000 for the first quarter of last year. I will remind you that the timing of the domain sales from our portfolio can vary significantly from quarter-to-quarter. On a percentage basis, gross margins for the portfolio revenue stream was 89%, up marginally from 88% for the first quarter of last year. Turning to costs, net to costs for the first quarter of 2012 decreased $79,000 or 5% to $1.4 million from $1.5 million. Primarily the result of the efficiencies in operating and managing our co-location facilities, as well as the decreased commitment we have needed to make to capital expenditures on network equipment. Total operating expenses for the first quarter of 2012 were unchanged from the same quarter last year at $4.8 million. A $200,000 increase in work force related cost was offset by a $200,000 increase in gain on foreign currency contracts, compared to the first quarter of last year. As a reminder, beginning last quarter as part of our efforts to improve our disclosure and improve the clarity and transparency around foreign exchange, we now offset any impact that maturing contracts have against a gain or loss on currency forward contracts line, rather than the G&A line. Accordingly, the aggregate impact of the forward contract is presented on one line, and the trending of G&A expenses can be tracked without having to make an adjustment for its effect. As a percentage of revenue, total operating expenses decreased to 17% from 21%. Net income for the first quarter of 2012 was $1.7 million, or $0.04 per share, compared with $700,000 or $0.01 per share for the first quarter of last year. I will note that net income for the first quarter of this year benefited by a half million generated on the sale of certain intangible assets that did not have a book value. Cash flow generated by operating activities during the first quarter of this year increased to $2.1 million from $800,000 from the same quarter last year. In addition, cash flow also benefited from the proceeds of the intangible asset sale I just mentioned. During the quarter, we announced that we have successfully concluded our modified Dutch Tender offer that we initiated last December. Under the terms of the tender, we repurchased 7.6 million shares at a cost of $5.9 million. The tender was funded from available cash and an advance of $4 million under our credit facility with the Bank of Montreal. With regard to our credit facility, we elected to make capital repayments of $540,000 during the quarter, and at the end of the quarter had an outstanding balance under our facilities of $1.3 million. During the quarter we also invested $330,000 in equipment purchases. As a result, cash and cash equivalents at the end of the first quarter of 2012 were $6.4 million, up $2.2 million from $4.2 million at the same point a year ago, and unchanged from the end of the fourth quarter of 2011. Deferred revenue at the end of the first quarter of this year was $73 million, an increase of 13% from $64.9 million at the end of the first quarter of 2011 and up 6% from the end of the fourth quarter of 2011. In summary, our results for the first quarter of 2012 were once again demonstrative of our consistency and reliability of our business, and the leverage that is inherent in our business model. And with that, I would now like to turn the call back over to Elliot. Elliot?

Thanks Mike. As those who regularly listen to these calls have heard me say many times, Tucows' business is all about consistency and reliability, within the context of steady efficient growth, not catalysts. That's why we view this as such a good quarter. You see solid growth across all three areas of the business and you see the leverage in the business. It's the snowball getting bigger. We believe this type of performance rewards investors who have taken a long term view of the company, investors not traders. As those of you who listen to our calls regularly know, I normally don't talk about the share price. But given the increase in the share price in the last quarter, I've had many shareholders asking me why. I'm not sure anyone could have predicted the timing of the upward move. I might be close to the company than anyone, and I couldn't have predicted it. I have been saying for a number of year, that the stock would be recognized at some point. I just couldn't tell you when. But that long-term investors, that appreciated the consistency and reliability and steady build, will eventually be rewarded. Certainly reducing the float by over 40% in the last few years has an impact. Certainly people are excited about Ting. But more than anything else, this is just the market as a weighing machine. Our whole sale business is going well, with more service introductions, more customer wins, and the benefit of our unique focus on service providers, showing in the results. Our retail business has great gains in the number of customers, improving performance with add-ons, and fantastic word of mouth and renewal, due to a relentless attention to customer experience. Our portfolio business is benefiting from the work we have put in to making those revenue streams more predictable, to focusing on long term value and brandables, and to the maturing of the secondary market for domain names, when these are combined with our capacity for innovation as evidenced by Ting. The leverage in our business, as top line, growth is out stripped by bottom line growth, and with our relentless focus on returning capital for shareholders, we believe that best for Tucows is yet to come. And with that I'd like to open the call over to questions. Operator?

(Operator instructions) Your first question comes from the line of Thanos Moschopoulos. Your line is open.

Hi, good afternoon.

Hi, Thanos.

Hi, Elliott. It seems like a strong quarter. On the Ting front there's probably not much you could share with us in terms of metrics but maybe just going back to the comment you made on last quarter's call. Is Ting still on track to become your second largest revenue stream by year-end?

Well, you know, there's nothing that would have happened in this quarter that really would've made it more or less likely to frankly. I think that in the second or third quarter it'll be easier to comment on that. Thanos Moschopoulos - BMO Capital Markets Okay. I mean but it sounds like overall in the early days of the launch the business seems to be on track with your plans?

Yes, we're happy with where we are right now.

Okay. Now how should we think about OpEx going forward? We saw an up-tick in OpEx which makes sense given that the overall business is growing. Just as we sort of try to model and quantify that going forward, do we think about OpEx remaining fairly consistent at these levels relative to revenues? Or should we continue to see some operating leverage going forward?

es, there was a little bit of a pop sequentially but not much year over year when you look at it. So if you look forward to Q1 which is I think what you've probably done there.

Yes.

It might look like there's a little bit of a pop there, but look at Q1 versus Q1 and you'll see some consistency. There tends to be because labor is such a high components of our OpEx that you get a few expenses early in the year that are just that. So we think that when you look at that leverage metrics that we're always putting out we think we're doing great like that. And OpEx should continue to be in this range. There's nothing material that's going to happen there.

Okay. So what I'm hearing is that there's some seasonality in the number, but that going forward this is probably around a consistent range?

Yes, yes. You'll see it sort of tick up at a much slower rate than you'll see the built gross margin tick up, which is the important thing.

Hover work continues to see some really good growth in that business. And can you just remind us in terms of what's driving the performance there?

Really with Hover it's a very encouraging example for us of what happens when you focus on social marketing over time. So what's happening there is just happy customers, great word of mouth and then that being reinforced through that focused podcast marketing. So, one of the things that we're always looking at is Twitter mentions, because that gives you a good sense of the Site gist. And we consistently see that I'm growing and growing. And we check with our customers as to where they're coming from and they're coming from exactly where we want them to be coming from; word of mouth, and to some extent, from our key advertisers. We think that we've learned some fantastic lessons for Hover. Again, it's that kind of snowball, building and building. And then it starts to take on a life of its own. And we think that we're going to be able to apply a lot of those same lessons to the take.

Finally, you talked about the excess gem revenue in the quarter. I'm just trying to quantify that, given that the segmentations also changed at the same time. Would it be right to think of that being in the 500 day kind of range?

No, I think that's a little bit too high. I would put the excess number more in the 200 to 300 range.

Okay. That's fine, then. I'll pass the line. Thanks.

Great. Thanks, Thanos.

Your next question comes from the line of Aaron Fuchs. Your line is open. Aaron Fuchs - Fertilemind Capital Regarding Ting, I was wondering if you can break down with more precision the cogs or the gross margin in general. That will at least give us a chance to model and guess at customers in ARPO.

Sure. First of all, hi, Aaron. Nice to hear from you. I think what I'd be comfortable saying at this point. First of all, what I'm going to be talking about cogs or ARPO margin. I want to refer to my comments on the call, where I want to be talking about is the service margin. The equipment is app, at-cost, or at a very slight loss, and that's by design. On the service side, we want to see margins coming in the 30% to 50% range. And so far, with where we are, we're quite happy.

You mentioned using the Web 2.0 community Baysides [sounds like] to hope for a viral word-of-mouth marketing.

Yes.

But why haven't you thought of experimenting with some PPC ads? They're easily scalable, they're easily turn-on, turn-off. What's your thought process there?

We have done some experimentation. The great thing about the Internet is that you can experiment with a lot of things relatively inexpensively. And our thesis pretty much played out, which is when you're really boiling the ocean, you get a less qualified visitor who spends less time on the site. And who tends to be less engaged. And when we track things through the conversions, we found that it just really wasn't very efficient. There's another bit too, which is, unlike Hover or the domain registration business in general, where the advertising tends to lead to a transaction pretty quickly. One of the things we are learning with Ting is that we have people who are coming and getting informed and then they might be waiting for a specific piece of hardware. They might be waiting for a contract to end. There are a number... they might just be watching the service and watching the Facebook page, seeing what the dialogue is like. What we're really trying to do is engage at this point. We looked at the way that conversions track through and we've learned pretty quickly that it's a different, sort of a longer lived sales process. Where that's, I'll give you two examples of where that becomes important for us. One of the key metrics we're looking at when we're looking at marketing sources is how long the visit to the site was from that source. Because you're seeing the engagement, you're seeing how interested. How many pages did they turn? How long did they stay? The second thing I'll note for you is we're trying to think through metrics gold, let me call it, that are something less than a sale, that are still going to be material in leading to more sales in the longer term. So we got a couple of things we're starting to play with now there but it's a really, really important piece of learning. I'm not sure I explained it well, but if you like, we can go offline on it too.

Okay. You basically mean a sort of engagement between a land on your page and a sale, right?

Trying to rush somebody to the cash register here is, we've clearly learned, unlike domain names, not necessarily the best idea here. We might want to have drinks and dinner first.

Okay. And the portfolio business was this just the one-off sale from inventory or was this something that you left out and Expiry Stream this quarter or is there anything that we can read into?

I think there are a couple of things there. The Expiry Stream performance was extremely strong this quarter and that's because we've got great, better performance from our primary partner who's becoming more and more comfortable with the relationship over time. So that's going up. And we've also added a secondary partner. So that's really just had a bit of a step function for the Expiry Stream. But expect current levels to be relatively consistent. And you've heard me say in the past, my goal with that whole area was to make it as consistent as possible. When it comes to the one-off sales, especially the big ticket items, you just really can't plan for them, you engage where you can and you bring things to conclusion where you can. So, I don't think there's anything... I don't think there's anything really out of the ordinary if you look at it over the course of a few quarters of the year. But there were a couple few big sales in there. The great thing is, Aaron, our inventory is so deep that there are no concerns about this not being repeatable.

It is just difficult to predict when, I understand.

Right, right.

Great, thanks for your time.

There are no further questions at this time.

Thank you, Operator. We look forward to having you all join us again next quarter.

This concludes today's conference call. You may now disconnect.