Good afternoon, ladies and gentlemen. Welcome to Tucows Third Quarter 2016 Conference Call. Earlier today, Tucows issued a news release reporting its financial results for the third quarter; that news release and the financial statements are available on the Company's website at tucows.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 one hour following the completion of this call. Details on how to access the replays are available in today's news release. Before we begin, let me remind you that the matters the Company will be discussing include forward-looking statements and, as such, are subject to risks and uncertainties that could 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 reports on the Form 10-K and Form 10-Q. The Company urges you to read its security filings for a full description of the risk factors applicable for its 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. And thanks, everyone, for joining us today. With me is our Chief Financial Officer, Mike Cooperman. Today's call will follow our usual format. I'll begin with an overview of the financial and operational highlights for the third quarter. Mike will then provide a detailed review of our financial results, and I'll return with some closing thoughts before we open things up for questions. The third quarter again saw record performances across each of our key financial metrics. Continued growth in both Ting Mobile and Domain Services drove a year-over-year increase in overall revenue of 11% to just shy of $50 million. Net income and adjusted EBITDA were up 50% and 48% respectively, as a result of the significant operating leverage in our business. Ting Mobile added over 3,000 accounts and 8,000 devices in Q3 to bring our total to 147,000 accounts and 235,000 devices. I'm pleased to see a couple of quarters in a row now where our devices per count have risen above our typical 1.6 ratio. That is void of it by a few large customers but it is primarily driven by accounts that are coming in at or growing to the two to five device range. We've always said that families should see the greatest savings from our pricing plan with low lying fees and full usage, and the greatest benefit from our administrative features. This increase in devices per account seems like evidence that our message is getting through and that families are starting to discover these benefits for themselves. This positively impact the value of each subscriber and we will wait a bit more to see if we want to more permanently move any of our other key variables. Churn was 2.8% in Q3. We are seeing some successes with efforts intended…

Thanks, Elliot. As Elliot discussed, Q3 saw our financial performance achieve records in terms of revenue, net income, earnings per share and adjusted EBITDA. Revenue grew 11% to $49.1 million from $44.3 million to Q3 of last year, driven by both the larger Ting Mobile subscriber base and the incremental contribution of Melbourne IT International, also the main reseller channel which we acquired in the second quarter of this year. Custom revenues before natural costs increased 7% to $30.8 million and $28.7 million for Q3 of last year. This is resulted in the increase in gross before network cost of 17% to $18.2 million or $15.6 million which as a percentage of revenue expanded to 37% from 35%. Looking at gross margin for network access increased by $2.5 million or 36% to $9.6 million from $7.1 million for the third quarter of last year with the increase driven entirely by Ting Mobile. As a percentage of revenue, gross margin for network access increased to 50% or 44%. Gross margin for the main services for the third quarter increased 2% to $8.6 million from $8.4 million for the corresponding period last year. As a percentage of revenue, gross margin for the main services contracted slightly to 29% from 30%. Looking at each component of the main services individually, gross margin for the wholesale channel increased 4% to $5.8 million from $5.6 million with the increase attributable to the incremental contribution from the acquisition of the international wholesale reseller channel for Melbourne IT. As a percentage of revenue, gross margin decreased to 23% from 24%. Gross margin for retail services increased 11% to $2 million from $1.8 million for the third quarter of last year. As a percentage of revenue, gross margin for retail services was down slightly to 54% from 56%.…

Thanks, Mike. As we look for the remainder of the year, with nine months of solid financial performance in the books, we are reiterating our existing adjusted EBITDA guidance of $30 million for 2016. A couple of notes, first, we now expect CapEx for Ting Internet to come in it less than $10 million for the year. There is nothing negative in this lowered number. Simply learning about the nature and pace of fiber deployments. We will apply this learning to 2017 and beyond. In addition, when we laid out our guidance for the year. We share what we expected to spend, roughly $2.5 in 2016 on Ting Internet at an operating level. At this point, we think this number will more likely come in at $3.5 million to $4 million. Again, we continue to grow and learn and are very happy with the spend. In fact 2016 has really been a year of learning for us. In the domains business, we have learned great lessons in efficiency and profitability in a more mature platform business. In Ting Mobile, we have learned many lessons through a good hard look across our customer acquisition method. In Ting Internet, we have learned the nuts and bolts of operating a fiber channel. We have learned how to work city opportunities through a pipeline. We have learned how to start a build in a new market dealing with everything; from design to staffing. We have done it all while spending wisely. Most importantly, we have learned that Ting Internet plays to our organizational strengths of strong back office, excellent customer service, attention to detail, and sense of community and building long-term win-win partnerships with communities in the same way we have historically done so with customers, employees and investors. All in all, Q3 was another quarter of solid performance for Tucows. Growth in both Ting Mobile and domain services combined with a significant leverage in our business model continue to drive growth and profitability to support our investments in Ting Internet and our work in allocating capital more generally. Our shareholders have continually praised us for our capital allocation and for years we've shared with them that we were simply running the business employing time tested principles. As we look towards 2017 and beyond, we expect to be deploying capital towards fiber and other significant opportunities on a greater scale than in the past. We feel that the combination of operating opportunities and capital deployment opportunities that sit in front of us really play to our strengths and bode well for our ability to provide outsized returns for years to come. And with that, I'd like to open the call to questions. Operator?

[Operator Instructions] We do not have any questions at this time. Mr. Noss, I will try to call over to you. Pardon me, we do now have a question from Mr. Hubert Mark from Cormark Securities. Your line is open.

I'm missed on the call here, I just want to be clear in terms of the G&A, it came down sequentially and I think I heard a reversal, I guess sequentially quarter-by-quarter can you guys sort of talk to that?

Yes, so we have -- there is a part of the call that's kind of overachievement. So we've got regular compensation, then we've got bonus and then for some outsized performance, we have some overachievement targets as well. We had originally approved some of them across the year '15 to '16. We went back and forth on some of the targets here, and when we looked at what we had put some of it against and very specifically, don't mind sharing that was some that we had put against growth ads for Ting Mobile -- maybe it's was a good whack of money, it was about $320,000.

Okay. So even with that it looks like the G&A came down sequentially, what else cost of decline -- is there anything else that…

I'm looking at the furrow on Mike and I think what I'll say Hubert is he is going to dig into it and get back to you.

Okay, that's fair. And then in terms of sales and marketing, correct me if I'm wrong but I think I heard that -- it looks there is some investment here in the sales here and I think I heard in a mid-six, did you figure -- can you sort of again, clarify what type of investments these are when did they come through in the -- I guess these are over next two quarters or a is there like a one-time thing?

No, you see, just about all of that at the start in Q3 and that's for the infomercial that I've referenced, so there is a chunk of that that's production costs. And then there is another piece of that, that media buys sufficient to allow us to test the success. And then if that's successful which will be a great and happy outcome. There will be some flow-through on both, revenues and expenses but I will kind of walk you through in Q4 if we need to. But for your purposes now, in Q3 you'll see another couple of few hundred thousand dollars in sales and marketing expense and thus attributable to the infomercial.

Okay. And then not just on the cash flow statement, I know this quarter seems like you've guys didn't repurchase any common stock here; can you maybe just give us some color as to how you do you guys kind of think through that like you guys, obviously you guys have a debt capacity, are you guys holding that back on potentially CapEx plan for next year? Can you just give us some color in terms of how you guys are thinking over there?

Sure. No it's tactical as always, if you go back and look at that chart. You'll see remember that we have time between -- the time of the call till the end of the calendar quarter and you'll see a pretty big run up early there and that's just caused us to kind of pull in our claws a little bit and we're always trying to leave space for people to accumulate, we're always trying to -- sort of be shareholder friendly in the way we roll it out, as well as being tactical around it. So there is no -- there is not much to read into it other than just the way that tape ran through the quarter.

Okay. And then on the Ting Internet, you indicated you're not adding any sales but can you talk '17 -- I think last time you talked about six cities you're going to go into -- can you give some idea for '17? And how the CapEx might actually pan out for that year?

No surprise, I'm going to speak to both of those two things, specifically on next quarter's call. I think it's comfortable to say at this point -- you're going to see CapEx rise pretty significantly year-over-year; and Hubert, that's -- we could do that just putting money in the ground [indiscernible]. So there is a lot of boring and digging to be done simply in those markets. So will see the increase pretty significantly. And in terms of the pipeline, I think we're learning that cities take a long time to come through on one hand and on the other, that -- when you're doing as a noble build, there is a lot of work involved. And so what I was trying to do a little bit when I was laying out simply the number of addresses that you see in these markets is to say look, there is a lot here, there is a business here already that by no means means we're not going to be adding markets in 2017, I fully expect us to but it's to say that's probably not the most important variable to track. And as always, we'll keep you well in the loop as we go along.

Okay, and then on a Ting Mobile. Actually you guys have put in the initiatives in place over the past quarter or several quarters here. And by the sound of it, it sounds like it's taken a little bit slower to take hold here; and it sounds like you guys are pushing towards a new initiatives here. Are these initiatives in place like these increasing assets, like the new phone tactics, are they already in place or is it something us rolling out in Q4? And can you sort of talk to -- given we're basically one month -- can you guys talk to Q4, how you're seeing the pan out, do you see it in terms of the net adds? And how do I think about also next year; if you can -- if people talk to that?

Yes. Next year I would say I'll talk about that next quarter. To give you a little bit more detail there, I think that what we're seeing in the -- in the steady state business, what I was trying to do in describing in detail lot of the initiatives that I talked about for the last few quarters, to say; hey. Look in the first couple of buckets the first bucket doesn't look like there's anything that's going to change the game for us, in the second bucket, you know what? We found some things that do work, now we've got to figure out how and if we can scale those things. And in the third bucket. A lot of that work had to be put in place. So both -- I think I talked last quarter about the cultural transformation you need for an organization needs to kind of do sales more successfully. We put the pieces in place, over the last two or three quarters that have allowed us to do something like this infomercial. So we just kind of started from a standing start, and contracted for a grand something like this. You'd be -- you'd be generating need into a much less efficient back end. So we had to do some real hard work and that work has been done. We expect it to continue to refine and improve, as we get more and more practice with it like any muscle. But that work has been done. And then in terms of the infomercial itself. We've seen a near final version now and it'll start running about a week or so. I'm hoping that you are neither in the markets where it's running humored or up late enough to watch it, but beyond that this is now, this is moving to execution phase or we're kind of in market with it.

Okay, great, thanks I will pass by.

Your next question comes from Patrick Retzer from Retzer Capital. Your line is open.

Hi, congratulations on another very good quarter.

Thank you.

I wanted to just -- your ramp number some metrics for the fiber towns that you're already in, I think you said you will have a total of 85,000 serviceable addresses.

Yes, five of the currently announced towns are built out, that adds up to about 85,000 addresses.

Okay. And then using -- you still stick by your estimate of about a 50% penetration rate after five years and a $1000 of gross profit per subscriber.

Yes, we're not seeing any data that's taking us a way from those.

Okay. So just on, the -- we're looking at when the companies reach that point, gross profit of $42.5 million a year.

That the math based on those assumptions, I mean I was laying it out like that to say; hey look there's a lot there and you can look at that up against where we are right now and saying mobile. And it's pretty good.

I mean and to put that in perspective, your gross profit for the first nine months of the year for their entire company was $46.6 million.

Yes, remember just to sort of moderate things a little bit. That is a 2021 number, five years right. But yes what you said is correct.

Okay, great. And then Google's sort of pulling back on that fibered business, I would think that puts tenure a stronger position when they're talking to a new potential market, have you seen that or do you expect that.

And we haven't seen it yet. But we've been kind of working the things there in the pipeline. So what we haven't seen yet is one of the cities that Google explicitly pulled back from, reaching out to us but I would note Pat, that I really when people talk about them pulling away or pulling back. I really think it's more accurate to describe them as taking stock and recognizing, that they're in I want to say it's their business not mine; So don't quote me, I want to see the 11 market that they're staying in and that we're looking at five markets and saying; wow this is plenty for us to really sort of refine our game here and I think they're looking at the markets they're in and saying the same thing. It's an operationally complex business and I looked at their announcement in some ways sort of a positive reinforcement of our view that this was complicated operationally and that the right thing to do was kind of get okay, and then good and then great. So, we felt whatever really smart people like they have at Google kind of see something through the same lens as we do, we're quite happy with that.

Okay. All right, keep up the good work.

Thanks, Pat.

The next question comes from Matt Miller from Bayview Asset Management. Your line is open.

Hello, everyone thanks for taking my questions. I wonder if you could comment on what concerns if any you have from an infomercial approach to brand editing.

What would I say not none. So if so when and -- so I think the way that we experienced it when we first considered it. And really throughout the process is that the response was more emotional than rational. So I think that there is it's a very, very different voice, which is what I tried to call out in the script there than we usually talk to our customers, we usually talk to our customers more conversationally, we usually talk to them in a little more sophisticated way. We have to respect that there's a lot of great product that is moved in a lot of high volume through these channels, and I think we I don't mean you and I, I mean we internally here. And I think that probably what gave us -- I mean when you see it and happy to let you, when you see it, it certainly is an infomercial. There's no -- it's clear that that's what it is, but I will also tell you that the biggest Body of topic in there is customer testimonials, and those are completely consistent with the way that we approach our communication. And had completely consistent with everything that we would have wished and hoped our customers would say of us. So I think that what sometimes you serve a dish that you might not eat regularly and it serves you well.

Great appreciate that. I wonder you said you had some things that you thought kind of early on were reducing churn could you expand on that.

Sure, there are with reducing churn that's really about grinding. There's good work is being done and on boarding, there's good work that's being done in starting to get out ahead of the more predicted with people device needs, things like that. So it really is -- really kind of in the details programs and processes.

And just a couple questions on competition if I might. Wonder what you're seeing or think about some of the potential changes in pricing around mobile data, that have been out there and then secondly I think there's some new potential and the MSO competition coming in perhaps next year, with some of the large players on the cable side, can you talk to each of those.

Yes. So we didn't really see a lot of what I would call aggressive competition with more recent moves. We think it's more what sort of moving piles around than anything else. What I'm talking about now kind of incumbent's moves, they tend to be focused on each other and they don't really tend to materially affect people's cell phone bills. With respect to the sort of the entrance of the MSO cable companies, into the mobile space, I flagged I want to say, a quarter or two ago that will be the next big competitive change in this industry. And I would -- it would be my conjecture just like anybody else is. I think if you want to understand what we're looking for we think more or what they offer is like the existing experience and the lower the price, the more concerned we are and the more sort of promoting Wi-Fi first or calling and the less competitive the price; the less worry we are; and those are two variables that will be watching most closely.

Right. And my last two if I might get two there on the fiber business. What do you think is the biggest hurdle or hurdles to achieving that 50% penetration target in five years from your perspective, and then secondly what might be the biggest hurdle at this point to adding to that fiber city pipeline, or closing what's in there and then that'll be it for me, thank you.

I'll do the second one first. With the pipeline, I guess the short answer is we don't really see much in the way of hurdles, the limiting factor there is our ability to want to sort of increase the breath of what we take on or the surface area of attack, we're really treating it very seriously. We want to be great at it and we think to rush it would be a mistake. So there are there is -- there is it's not hurdles that we see there is just sort of us keeping ourselves in check. In terms of hurdles around penetration, I think there is two that I would call out. One internal one external, the external we really haven't yet seen, we haven't seen I won't say yet as if it's an eventuality but we do expect it, a strong competitive response from competitors in our markets, we think a part of that is because it's early days, the first and most likely place we would see that would be Charlottesville. I think it's an expectation, we certainly have of bring it on attitude, but we do respect the competition and we well understand that that's going to be something that we would be -- we would minimize it to our churn. So, I think we -- that's kind of its unknown and it's certainly a hurdle. The internal hurdle that I reference. Is we really do think that what we're trying to do on a marketing level is a bit unique? When I talk about hyper local marketing on a national scale. How do you go into a location the size of Holly Springs, or Sam point or Santino and really achieve national brand scale in that small footprint. It takes new and innovative thinking and approaches and techniques and we're really just at the beginning of that, I've got real confidence in the folks that are handling it. I think people are thinking about the problem in the right way and I think it's like a lot of other things, it's going to take experience and practice and learning.

Correct. Thank you, I appreciate it.

[Operator Instructions] Your next question comes from Daniel Asoski [ph] from Asoski Capital. Your line is open.

Gentlemen, thank you so much for hosting this call.

Thanks, happy to have you.

Once again, great execution. Really just one question at this point is could you do an excellent job relaying the story and then your thoughts on capital allocation. Really curious about your thoughts regarding 5G risks and potential tech-up lessons risk when it comes to the fiber business; and along that lines when you think about tech ups for associated competitive risk, what are your key concerns if you were a prioritize them, regarding the fiber business. It's really two questions. Thank you.

I guess we'll plug our own videos, we've got a couple newer investor videos, and so I've encouraged folks to go to the Tucows investor site or the investor section of the Tucows websites in one of the -- I talked about some of this -- talk about it Wireless more generally because we could be talking about 5G. [ph] we could be talking about three to five we could be talking about a millimeter wave, which is what web company Google bought a few others are doing, at the end of the day we are very comfortable that fiber is the best, fastest, most reliable medium or for internet access. We think that there is the fact that it's light over glass, really puts us bumping up against some of the limits that physics provide and that 5G. In the longer term, I think most people who talk about it know that we're still three to five years away from a standard for 5G. So I don't mind saying that we think 5G. provides more opportunity than it does a threat in that, when you project out a few years. The thing -- that 5G will need the most is to get on a fiber backbone as quickly as possible, the one thing that we are unmistakable truth is that in tin towns, we will have by far the richest and deepest fiber network. Meaning if you want to have a great 5G coverage in the same town you need to speak to us about back call, and I think I can say that no we're in the back call business, you should model that in four years; I could say that because we're talking about 5G. which again is three to five years away. So, we're not worried when it comes to five or about tech ups lessons. And then when you talk about sort of what are we most worried about, I think that that it will be by far it's executing around these opportunities; don't take on too much too fast, but take on enough that we're continually challenging ourselves. I talked just in the previous set of questions about competitive response from some of the existing competitors, that's something again that we take very seriously. And I think that the one of the things that we don't worry about is whether the demand for better, faster, cheaper, more reliable internet access, will continue to increase significantly. I hope that gets at it for you.

That is perfect, thank you so much.

Thank you.

We have no further questions at this time. Mr. Noss, I will turn the call over to you.

Thank you all for joining us, and we look forward to being with you again next quarter. Thank you, operator.

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