Tucows Inc.

Welcome to 2COWS first quarter 2022 management commentary. We have pre-recorded prepared remarks regarding the quarter and outlook for the company. A 2COWS generated transcript of these remarks with relevant links is also available on the company's website. In lieu of a live question and answer period following these remarks, shareholders, analysts, and prospective investors are invited to submit their questions to 2CAS management via email at ir2cas.com until May 13th. Management will address your questions directly or in a recorded audio response and transcript that will be posted to the 2CAS website on May 25th at approximately 4 p.m. Eastern Time. We would also like to advise that the updated 2COWS quarterly KPI summary, which provides key metrics for all of our businesses for the last five quarters, as well as for full years 2020 and 2021, and now includes summaries of fiber internet services financial results and historical financial results, is available in the investor section of the website, along with the updated TingBuild scorecard and investor presentation. Now for management's prepared remarks. On Thursday, May 5th, 2Cows issued a news release reporting its financial results for the first quarter ended March 31st, 2022. That news release and the company's financial statements are available on the company's website at 2cows.com under the Investors section. Please note that the following discussion may include forward-looking statements, which, as such, are subject to risks and uncertainties that could cause 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 reports on the Forms 10-K and 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable for its business. Finally, as discussed on our last call, starting this quarter, we will report as separate businesses, Ting, WaveLo, and 2Cows Domains, in addition to 2Cows Corporate. 2Cows Domains is unchanged. Ting is also largely unchanged, save for our historical ISP billing solutions, which have been moved under WaveLo. Wavelow no longer includes the tail from the retail mobile customer base sold to DISH or the legacy retail mobile business. Both of these are now included in the 2COWS corporate category, as well as centrally managed administrative expenses. For those that have not done so, I encourage you to watch the video we posted in February for additional detail and perspective on the rationale for this change. I would now like to turn the call over to 2COWS President and Chief Executive Officer, Elliot Noss. Go ahead, Elliot.

Thanks, Monica. With this change in our reporting segments, we're also refreshing the format of these remarks, inviting the heads of each of these businesses to deliver the remarks on their own business to let you hear them and as investors start to get to know them better. Also, in the interest of time, starting with this call, I'm going to dispense with my review of the overall financial results. This information is readily available in our disclosures and our CFO, Dave Singh, will cover it in detail in his remarks. We are essentially repeating each other. We hope our shareholders will appreciate our continuing efforts to be thorough but efficient with these commentaries. And of course, we are open to feedback. We will start with Dave Warrick, Chief Executive Officer, Two Cows Domains.

Thanks, Elliot. And for those who don't know me, I've been with the Two Cows Domains business since its inception in early 2000, just as the company was preparing to launch its wholesale domain name registration service. Our unique offering completely revolutionized the domain name business for web hosting companies and ISPs. Over the ensuing 22 years, I've been involved in all aspects of our domain business and have been running it for the last five years. Turning to the most recent quarter, I am pleased to report that Domain Services delivered another quarter of solid performance that once again underscored the consistency of the business. Revenue for Domain Services for the first quarter was essentially unchanged from the same period of last year, with gross margin down slightly. I will note, however, that gross margin for Q1 last year benefited from a registry rebate, which happens from time to time, that was not repeated this year. Excluding this rebate, gross margin was in line with that of Q1 last year. Domain services adjusted EBITDA, net of the impact of the rebate, decreased 5%. The vast majority of this decrease was the result of the stronger Canadian dollar, which increases operating expenses mainly due to Canadian dollar-based compensation costs. While the overall financial performance of the domains business was very much in line with Q1 of last year, total transactions for the business, as expected, are now settling back in at pre-pandemic levels after the elevated levels in 2020 and 2021. We are seeing signs that these are industry trends. VeriSign, the operator of the .com and .net registry, announced their Q1 results last week, commenting that the component of growth attributed to the pandemic has subsided and that their new registrations at $10.2 million for the quarter were down 12% year-over-year. Importantly, I will note here that 2Cal's overall combined renewal rate for Q1, which we view as an indicator of the health of the business, remained well above the industry at 81%, also back to our pre-pandemic levels. In the wholesale channel, revenue for Q1 was up just shy of 1% year-over-year, with gross margin down just under 2%. Excluding the benefit of the rebate to last year's numbers, gross margin was up 4%. Within the wholesale channel, domain services revenue was unchanged from Q1 last year, while gross margin was down 7%, primarily due to the benefit in last year's quarter of the rebate. Excluding the rebate, gross margin was also unchanged year over year. The value-added services component of the wholesale channel once again generated solid growth, with both revenue and gross margin up 11% compared to Q1 last year. The increases continue to be driven by the performance of our expiry stream business, where the secondary market for domain name sales continues to be strong. In our retail channel, revenue decreased 1% and gross margin decreased 10% from Q1 2021. Once again, retail gross margin was impacted by the transition in Q2 of last year of a number of Enum customers and their domains from our retail channel to our wholesale channel. Along with the realignment of the business segments, we have taken the opportunity within 2COWS domains to more closely connect the 2COWS parent and the registrar brands. For more than two decades, 2COWS has been synonymous with domain registration. In the coming months, you will see a stronger connection of the 2COWS brand with our registrar properties, with each anchored by the rich heritage of the 2COWS name. It's something that we are all proud of and reflects our two decades of success in building the world's largest wholesale domain registration business and the second largest domain registration business overall. Now over to Justin Riley to report on Wavelow.