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Toronto, Canada - (Cheap Web Hosting Directory) - May 15, 2007 - Domain registrar and Internet services firm, Tucows Inc., has reported continued strong results for the first quarter of fiscal 2007, including record revenue, adjusted net income and cash flow generation.

The first quarter fiscal 2007 financial results include: - 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; and, - A 17% year-over-year increase in deferred revenue to a record $48.0 million.

Elliot Noss, President and Chief Executive Officer of Tucows Inc. remarked, ”The first quarter of 2007 was highlighted by another solid financial performance. 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. 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.”

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.

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.

Company management hosted a conference call, to discuss the results and outlook. Participants can access the conference call via the Internet at http://about.tucows.com, which will be archived for replay both by telephone and via the Internet until Thursday, May 17, 2007, at midnight. 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.

Tucows Inc. provides Internet services and download libraries through a global distribution network of 6,000 service providers. The distribution network primarily consists of web hosting companies, ISPs (Internet Service Providers) and other Internet related service companies. The companies use Tucows’ provisioned services to offer solutions to customer: 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 about Tucows, please visit: www.tucowsinc.com.

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