Good afternoon, ladies and gentlemen. Welcome to the Tucows Third Quarter 2017 Conference Call. Earlier today, Tucows issued a news release reporting its financial results for the third quarter ended September 30, 2017 that news release along with the company’s 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 1 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, Dave Singh. Today’s call will follow our usual format. I will begin with an overview of the financial and operational highlights for the third quarter of 2017; Dave will then provide a detailed review of our financial results; and I will return with some concluding comments before opening the call to questions. I would like to begin by reminding you that the numbers we will present today reflect the consolidated domains business, including the contribution of the Enom businesses we acquired on January 20 of this year. I will however continue to breakout any numbers that I think will be helpful. The third quarter of 2017 saw the continuation of strong performance across all areas of the business, which combined with the contribution of the Enom acquisition, drove 73% growth in revenue to a record $85 million. Net income for the quarter was $3.4 million or $0.33 a share and adjusted EBITDA was $9.4 million. As I have discussed on prior calls, the required accounting treatment of deferred revenue for the Enom acquisition in January will have a negative non-cash impact on adjusted EBITDA of about $8 million, the vast majority of which will be realized in 2017. As a reminder, that impact was $3.8 million in Q1 and $1.6 million in Q2. For Q3, it was $1.5 million bringing the total for the year to $7 million. I should also mention that the year-over-year comparison suffers from a quarter of outsized Ting Mobile margin in Q3 2016. As we reported at the time, we received price breaks from our carrier partners early in that quarter before passing on that price break to our customers by the end of that quarter. That price…

Thanks, Elliot. Total revenue for the third quarter grew 73% to $85 million from $49.1 million for the same period last year. Growth was primarily driven by the acquisition of Enom and to a lesser extent by the contribution of the larger Ting Mobile subscriber base and growth in our legacy domains business. Cost of revenues before network cost increased 98% to $61.1 million from the $30.8 million from the third quarter of last year, with the increase driven by our growth in revenue. Gross margin before network cost increased 31% to $22.9 million from $18.2 million and I will take this opportunity to remind you that our overall gross margin throughout this year will be negatively impacted by the acquisition of Enom business, the accounting of which required amortizing into revenue, deferred revenue that was reported at fair value at the acquisition date. The impact of this accounting which can be calculated by referencing our 8-K filing from April 3 will lower our overall gross margin as well as our disclosed adjusted EBITDA as Elliot mentioned earlier by roughly $8 million, the majority of which will be reflected in our 2017 results. As a result, gross margin for network cost for Q3 of this year contracted to 28% from 37% for the same period last year. I will now review gross margin for each domain services and network access businesses. For our domain services, gross margin for the third quarter increased 67% to $14.3 million from $8.6 million for the same period last year. As a percentage of revenue, gross margin for domain services decreased to 22% from 29% for the reason I just mentioned and a slightly lower gross margin profile on the Enom business. Looking at the various components of domain services individually, gross margin or the…

Thanks, Dave. We have now been actively working on the fiber-to-the-home business for nearly 3 years and the time has come till we have framework for investors to follow our progress in more detail. We currently pass 13,100 homes and have roughly 3,900 customers across our existing three markets. Each quarter we will be providing the total number of homes passed and the total number of customers. In addition to sharing any modifications to our previously provided metrics dealing with take rate, build cost and CapEx spend. We think investors should be following the business as a whole. So, while we will always be providing information about individual markets and their progress, we will not be providing passes and customers for individual markets. There are number of things that I would like investors to note about those metrics. First, timing, when we go into a market, there will be some amount of CapEx that proceeds of adding any homes passed. This covers things like network design and designing and building a core facility. Next, our take rate goals of 20% in 1 year and 50% in 5 years are end of the year goals. In other words, a 20% take rate for serviceable addresses that have been available for 12 months. Particularly, in the early years, the bulk of the addresses that we have available will not have been available for that length of time. This will even out over time, but in this case, over time will be 3 to 5 years from now. I will note that the numbers that I reported above have been held down by the re-audit that we talked about in Charlottesville. So, that’s the serviceable addresses that have been held down showing how individual events can impact these numbers. Because of the flow…

[Operator Instructions] Your first question is from Hubert Mak from Cormark Securities.

Hi, guys. I guess first question I have is on the domain business. Can you guys talk about the margins in terms of – it looks like it’s sequentially down in terms of a percentage margin? So, can you just kind of give us some color and the reason for that?

Yes, there is nothing that stands out there. You are just going to see a little bit of the flow, particularly with new gTLD promotions and things like that. So, we are not seeing anything systemic. We have continued to see kind of a slight uptick in gross margin in that business over time. There is going to be a little bit of an ebb and flow as the Enom business gets adopted, but there is nothing particularly sort of jumping out that’s systemic.

So, when I take the Q3 as the potential run-rate or at least the margin that you guys are comfortable with or would this – do you expect this to move backup heading into ‘18 here?

Look I think it’s always best to be conservative and you can model at these levels and then we are all happy as it goes out.

Okay. And then similarly on the mobile large, the Ting Mobile as well, is there any commentary around the margins, it looks like it’s also down as well, sequentially at least?

Yes, again, there was – Dave, is there something you wanted to add there?

No.

No. I think, you are just seeing a little bit of a flow. There could be a little bit of the RingPlus stuff coming in and you are also starting to see particularly if you are looking just at the reported margins, Hubert, you are going to see the step up in device sales particularly Apple sales. And as you know, those are essentially zero margin transactions. So, my guess is we will both get to step away a little bit and check the MD&A and we should be able to strip that stuff out for you and I think you will see it’s pretty consistent.

Okay. And then on the mobile side, can you just give us an update in terms of the competitive environment whether that’s continuing to become more competitive for you guys or has that stabilized. Can just maybe talk to that?

It’s very interesting on the competitive environment side, because I don’t know if you happen to see apparently Marcelo Claure, Sprint’s CEO, said at a conference yesterday was sort of reported today that they were going to be raising prices shortly. I don’t know what that signals. It will be interesting to see. So, that’s kind of it looks all the sort of the merger fell back and maybe that is just Sprints in particular getting rid of some of the aggressive promotions they had during the merger discussions. So, we don’t know, but that could signal also potentially a bit of a trough in terms of pricing. I think that most of the incumbents are really sort of dealing with their kind of down market stuff through their flanker brands now and it’s a zero growth market. It’s all about people taking share from each other and I think that the incumbents are playing around with tactics. I think for us though on the price competition side, we still believe that we have got loads of value in there. And so I think there is nothing worsening certainly.

Okay. And then I just want to clarify something, you didn’t iterate your $50 million operating EBITDA. So, I just want to make sure my math is correct. So, am I correct to take that as currently your adjusted EBITDA was about $26 million and you recognized or at least you had an impact of $7 million in terms of accounting adjustments. So – and I think that total is about 33, so am I taking that in the quarter, Q4, you are looking for a difference between the 50 and then 33. So I guess ‘16 is that sort of how I think about that?

Yes.

Okay. Okay, great. Thanks.

[Operator Instructions] The next question is from Patrick Retzer with Retzer Capital Management.

Good afternoon, gentlemen. Congratulations on another good quarter.

Thank you.

So, I wanted to talk about the fiber a bit, Elliot you mentioned the Burlington situation a couple of times, I mean just to clarify, if I have agonized over watching some of the hearings if in fact that gets to the point where it’s not worth pursuing there is plenty of opportunities out there for Ting Fiber, right?

Yes. The pipeline is as nice as it’s ever been. And remember, Pat, we are now kind of active in 5 markets, not 3 anymore. So, there is lots of work. I think that Burlington is a unique situation in so many ways. So, my inbox has been full with people who find themselves frustrated sometimes watching those hearings. We have been on the ground there a bunch of times and I get that if you are watching those hearings and I will tell you it’s a great city with an incredibly active community. So, I think that for me to provide any specifics would be spoilers for Monday’s episode and I think that will be wrong, but I would say that we continue to be hopeful and I understand your frustration and appreciate it.

Okay. I see Madison, Wisconsin put out an RFP just a day or two ago, how many opportunities are you currently looking at?

There is always – boy, there is never a time when there is not sort of 10 or 12 under consideration, 3 or 4 under quite active consideration. And I would also add we are very aware of the situation of Madison. We like the way they are going about it and obviously we like that market.

Okay. Well, thanks for the updates on Charlottesville, Holly Springs and Westminster. I mean, clearly you have made a lot of progress there and keep up the good work.

Thank you, Pat.

[Operator Instructions] And we have another question from Hubert Mak from Cormark Securities. Your line is open.

Hey, I just want to also talk about that fixed as well. So, I want to make sure I am clear in terms of the operating cash flow that you are targeting here. So, I think I heard I guess or at least for this overall, it sounded like you guys are expecting to be on target in terms of generating positive cash flow I guess late 2018 as a sort of at a high level. Is that correct?

That’s looking give or take a couple of few months on either side that’s looking when it’s about to turn. We are seeing enough visibility in particularly those markets that I mentioned. And then it’s really going to be a question of how fast we are ramping up elsewhere. So, for instance, if we are actively spinning up in a couple of markets on top of what we see now, that’s going to push that period out. If we are lucky enough to be successful with Burlington Telecom, obviously it’s going to bring that period in, right. So, you have got a lot of puts and takes. What I am trying to do is keep people with visibility to the total picture and make sure that you can track the progress the same way we are. So, when you have a market like Holly Springs, where we kind of started the pre-work late in ‘16 we were building and are building through ‘17 we will probably complete the build in ‘18 and then that starts to contribute to cash later in ‘18 right out of city level. So, what I mean there is we have a set of expenses that are in the city and then we have gross margin that the city is generating. Right, it’s now contributing, then we have a small centralized operation back in Toronto and it’s a question of when that gets covered off to, but we are seeing all the right indications.

And just related to that now depending obviously at the success of the Burlington Telecom, if successful you would be utilizing some of your cash here. So, would you continue to push through in terms of other cities or would you slow the organic initiatives or how do I think about timing of that resuscitated?

Yes. I don’t think that will have to do as much with cash as with operational breadth. And I will note that great Burlington Telecom has an amazing staff and a great leader today. So, we really have to see what work on the ground we have to engage in, but that’s really going to be again I don’t want to get out, actually I don’t want to get out ahead of that one at all, because it is completely speculative at this point.

Okay, understand. Thank you.

Thank you.

And I will now turn the call back over to Mr. Noss for closing comments.

Thank you very much and we look forward to speaking with you all again next quarter and between then a Merry Christmas and a Happy New Year. Thank you.