Tucows Reports Continued Strong Financial Performance for Third Quarter Fiscal 2004

November 2, 2004

Quarter Highlighted by Record Revenue and the Company's Ninth Consecutive Quarter of Profitability

TORONTO, CANADA, November 2, 2004 –

Summary Financial Results Tucows Inc.

(Numbers in Thousands, Except Per Share Data)

*Includes recognition of $1.1 million of deferred revenue as current revenue as a result of a domain name reseller becoming an accredited registrar customer and that customer’s registrations being transferred from Tucows’ tag to the customer’s own tag such that Tucows was no longer accountable for those registrations. Included in cost of revenue is $0.8 million previously deferred against these names in prepaid domain name registry fees.

Tucows Inc. (OTCBB: TCOW) today reported its results for the third quarter of fiscal 2004 ended September 30, 2004.

Key highlights for the quarter included:

• A 33% year-over-year increase in net revenue to a record $12.4 million;
• Income from operations of $614,000;
• Positive cash flow from operations of $1.1 million;
• Net income of $821,000;
• An 18% year-over-year increase in deferred revenue to a record $32.5 million;
• A 10% year-over-year increase in domain name transactions to 865,000; and
• Gross margin from non-domain Internet services increased to 36% from 27% for the third quarter last year.

“The momentum inherent in our business continued to drive growth in both the top and bottom lines in the third quarter. I’m particularly pleased that our ongoing efforts to diversify our revenue streams are proving successful while we continue to maintain our dominant market position and ability to consistently win new business in the wholesale domain market,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “The fundamentals of our business remain strong as we achieved record revenue and our ninth consecutive quarter of profitability.”

Net revenue for the third quarter of fiscal 2004 increased 33% to $12.4 million from $9.3 million for the third quarter of fiscal 2003. The increase was primarily the result of a higher number of domain name transactions, as well as higher revenue from services other than domain name registrations. In addition, during the third quarter of this year, $1.1 million in deferred revenue was recognized as current revenue as the result of the change in status of a customer from a high-volume reseller to an accredited registrar customer. Excluding this amount, third quarter revenue increased 21% on a year-over-year basis.

“We pride ourselves on having the flexibility to address the changing needs of our customers. Our service bureau pricing model allows high-volume customers to take advantage of our services and avoid the cost and complexity of building their own system,” said Mr. Noss. “Not only does this strengthen our customer relationships, it provides significant opportunity to sell them additional Internet services.”

Income from operations for the third quarter was $614,000 (which included a net gain from foreign exchange forward contracts of $98,000) compared to $13,000 for the corresponding quarter last year (which included a net loss from foreign exchange forward contracts of $308,000). Net income for the quarter was $821,000, or $0.01 per share, compared to $179,000, or $0.00 per share, for the third quarter last year.

Deferred revenue at the end of the third quarter of fiscal 2004 was $32.5 million, an increase of 18% from $27.5 million at the end of the third quarter of fiscal 2003 and down marginally from the end of the second quarter of this year. The decrease in deferred revenue compared to the end of the second quarter of this year is a reflection of the aforementioned conversion of a high-volume reseller to an accredited registrar customer.

Cash and restricted cash at the end of the third quarter of fiscal 2004 was $13.3 million compared to $12.1 million at the end of the third quarter of fiscal 2003 and $12.3 million at the end of the second quarter of this year. The increase compared to the second quarter of fiscal 2004 is primarily the result of positive cash flow from operations for the third quarter of this year of $1.1 million.

Domain names registered, renewed and transferred-in for the third quarter of fiscal 2004 increased 10% to 865,000 from 785,000 for the same quarter of last year. Total active domain names under management at the end of the second quarter increased to 4.27 million.

Conference Call

Tucows will host a conference call on Tuesday, November 2, 2004, at 5:00 p.m. (ET) to discuss the company’s third quarter fiscal 2004 results. To access the conference call via the Internet go to www.tucowsinc.com, and click on “Investor Relations.”