Tucows Inc. (BULLETIN BOARD: TCOW) , a leading provider of outsourced Internet services to ISPs and web hosting companies worldwide, today reported its results for the first quarter of fiscal 2003 ended March 31, 2003. The quarter was highlighted by:

* net revenue of $9.0 million;
* record income from operations of $618,000;
* record deferred revenue of $25.8 million;
* positive cash flow from operations of $710,000;
* net income of $880,000; and
* a record number of domain name transactions.

"The first quarter of fiscal 2003 marked the continuation of the strong operational and financial performance that we achieved throughout 2002, despite a challenging market environment where the demand for new names essentially remained flat and competition remained intense," said Elliot Noss, president and chief executive officer, Tucows Inc. "Through efficient management of our operations and financial discipline, we achieved our sixth consecutive quarter of positive cash flow from operations and third consecutive quarter of profitability, further strengthening the financial foundation upon which we will continue to grow the Company."

For the first quarter of fiscal 2003, net revenue was $9.0 million compared to $8.3 million for the first quarter of fiscal 2002 (excluding $1.6 million in revenue from products and services that were disposed of during fiscal 2002).

Net income for the quarter was $880,000, or $0.01 per share, compared to $766,000, or $0.01 per share, for the first quarter of fiscal 2002. Net income for the current quarter included a gain of $547,000 resulting from the change in fair value of forward contracts and a gain of $236,000 associated with the disposal of the Company's registry management services business in March 2002. Net income for the same quarter of last year included a gain of $2.0 million realized on the sale of the registry management services business.

Deferred revenue at March 31, 2003, was $25.8 million, an increase of 12% from $22.9 million at March 31, 2002, and an increase of 6% from $24.4 million at December 31, 2002. Deferred revenue at March 31, 2002, included deferred revenue of $2.1 million from products and services that were disposed of during fiscal 2002.

Cash and restricted cash at the end of the first quarter of fiscal 2003 increased to $10.3 million from $9.8 million at the end of the fourth quarter of fiscal 2002. The increase is primarily the result of positive cash flow from operations for the quarter of $710,000 and the gain on the disposal of the registry management services business of $236,000.

Domain names registered, renewed and transferred-in for the first quarter of fiscal 2003 totaled approximately 772,000, a record number of direct transactions in a single quarter. Total active domain names under management at the end of the first quarter of fiscal 2003 increased by approximately 88,000 to 3.5 million.

Conference Call

Tucows will host a conference call on Wednesday, May 7, 2003, at 5:00 p.m. (ET) to discuss its first quarter fiscal 2003 results. Participants can access the conference call via the Internet at www.tucows.com by clicking on "About Tucows" and then on "Investor Relations."

For those unable to participate in the conference call at the scheduled time, it will be archived for replay both by telephone and via the Internet beginning approximately one hour following completion of the call. To access the archived conference call by telephone, dial 416-695-5800 or 1-800-408-3053 and enter the pass code 1407324. The telephone replay will be available until Wednesday, May 14, 2003, at midnight. To access the archived conference call via the Internet, go to www.tucows.com and click on "About Tucows" and then on "Investor Relations."

About Tucows

Tucows Inc. is a leading provider of outsourced Internet services to ISPs and web hosting companies worldwide. An ICANN-accredited registrar, Tucows provides domain name registration services for generic and country code top-level domains (TLDs), plus digital certificates and email services. Tucows also distributes software and other digital content through its integrated network of affiliates and offers more than 30,000 software titles in libraries located around the world. For more information, please visit: http://www.tucows.com/.