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Published: 2021-08-05

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-32600

TUCOWS INC.

(Exact Name of Registrant as Specified in Its Charter)

Pennsylvania

23-2707366

(State or Other Jurisdiction of

(I.R.S. Employer

Incorporation or Organization)

Identification No.)

96 Mowat Avenue,

Toronto, Ontario M6K 3M1, Canada

(Address of Principal Executive Offices) (Zip Code)

(416) 535-0123

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Trading

Title of each class

Symbol(s)

Name of each exchange on which registered

Common Stock

TCX

NASDAQ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days: Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T§232.405 of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growthcompany. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the ExchangeAct.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging Growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of August 3, 2021, there were 10,670,394 outstanding shares of common stock, no par value, of the registrant.

Table of Contents
	TUCOWS INC.
		Form 10-Q Quarterly Report
	INDEX

	PART I
		FINANCIAL INFORMATION

Item 1.			Consolidated Financial Statements	3

			Consolidated Balance Sheets (unaudited) as of June 30, 2021 and December 31, 2020	3

			Consolidated Statements of Operations and Comprehensive Income (unaudited) for the three and six months ended June 30, 2021 and 2020	4

			Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2021 and 2020	5

			Notes to Consolidated Financial Statements (unaudited)	6

Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.			Quantitative and Qualitative Disclosures About Market Risk	43

Item 4.			Controls and Procedures	44

	PART II
	OTHER INFORMATION

Item 1.			Legal Proceedings	45

Item 1A.			Risk Factors	45

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 3.			Defaults Upon Senior Securities	46

Item 4.			Mine Safety Disclosures	46

Item 5.			Other Information	46

Item 6.			Exhibits	47

Signatures				48
					TRADEMARKS, TRADE NAMES AND SERVICE MARKS

			Tucows®, EPAG®, Hover®, OpenSRS®, Platypus®, Ting®, eNom®, Roam®, Roam Mobility®, Bulkregister®, Ascio®, Cedar®, and YummyNames® are
registered trademarks of Tucows Inc. or its subsidiaries. Other service marks, trademarks and trade names of Tucows Inc. or its subsidiaries may be used in thisQuarterly Report on Form 10-Q (this “Quarterly Report”). All other service marks, trademarks and trade names referred to in this Quarterly Report are the property oftheir respective owners. Solely for convenience, any trademarks referred to in this Quarterly Report may appear without the ® or TM symbol, but such references arenot intended to indicate, in any way, that we or the owner of such trademark, as applicable, will not assert, to the fullest extent under applicable law, our or its rights, orthe right of the applicable licensor, to these trademarks.

						2

Table of Contents
	PART I. FINANCIAL INFORMATION
	Item 1. Consolidated Financial Statements
		Tucows Inc.
	Consolidated Balance Sheets

	(Dollar amounts in thousands of U.S. dollars)
		(unaudited)

				June 30,		December 31,
				2021		2020

Assets

Current assets:
Cash and cash equivalents			$		7,258 $		8,311
Accounts receivable, net of allowance for doubtful accounts of $202 as of June 30, 2021 and $222 as of December 31,2020
					14,811		15,540
Inventory					2,836		1,875
Prepaid expenses and deposits					19,637		16,845
Derivative instrument asset, current portion (note 5)					1,704		3,860
Deferred costs of fulfillment, current portion (note 11)					96,148		93,467
Income taxes recoverable					4,041		1,302
Total current assets								146,435	141,200

Deferred costs of fulfillment, long-term portion (note 11)					18,490		17,599
Derivative instrument asset, long-term portion (note 5)					83		-
Investments					2,012		-
Deferred tax asset					168		226
Property and equipment								144,187	117,530
Right of use operating lease asset					12,541		11,238
Contract costs					617		362
Intangible assets (note 6)					42,695		47,444
Goodwill (note 6)								116,304	116,304
Total assets			$					483,532 $	451,903


Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable			$		7,430 $		6,329
Accrued liabilities					14,003		10,235
Customer deposits					15,812		15,402
Derivative instrument liability, current portion (note 5)					110		99
Operating lease liability, current portion (note 12)					2,270		1,761
Deferred revenue, current portion (note 10)								130,094	127,336
Accreditation fees payable, current portion					958		940
Income taxes payable					20		863
Total current liabilities								170,697	162,965

Derivative instrument liability, long-term portion (note 5)					-		114
Deferred revenue, long-term portion (note 10)					24,766		24,909
Accreditation fees payable, long-term portion					183		195
Operating lease liability, long-term portion (note 12)					10,202		9,179
Loan payable, long-term portion (note 7)								139,867	121,733
Other long-term liability (note 4)					3,607		3,416
Deferred tax liability					23,386		24,694

Stockholders' equity (note 14)
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding					-		-
Common stock - no par value, 250,000,000 shares authorized; 10,665,514 shares issued and outstanding as of June 30,2021 and 10,612,414 shares issued and outstanding as of December 31, 2020
					23,457		20,798
Additional paid-in capital					2,208		1,458
Retained earnings					84,062		80,106
Accumulated other comprehensive income (note 5)					1,097		2,336
Total stockholders' equity								110,824	104,698
Total liabilities and stockholders' equity			$					483,532 $	451,903

Contingencies (note 18)

										See accompanying notes to consolidated financial statements

		3

Table of Contents
	Tucows Inc.
		Consolidated Statements of Operations and Comprehensive Income

		(Dollar amounts in thousands of U.S. dollars, except per share amounts)
	(unaudited)

			For the Three Months Ended June
				30,	For the Six Months Ended June 30,
						2021				2020			2021	2020


Net revenues (note 10)			$			75,093 $	82,122 $			145,968 $		166,107

Cost of revenues (note 10)
Direct cost of revenues						49,133	51,790			95,320		104,978
Network expenses				3,612	2,485			6,850		4,901
Depreciation of property and equipment				4,084	3,030			7,722		5,907
Amortization of intangible assets (note 6)				24	326				323		680
Impairment of property and equipment				1	1,525				61	1,525
Total cost of revenues						56,854	59,156			110,276		117,991

Gross profit						18,239	22,966			35,692		48,116

Expenses:
Sales and marketing				9,376	9,218			17,687		18,203
Technical operations and development				3,170	3,067			6,302		5,818
General and administrative				5,210	5,465			10,163		10,206
Depreciation of property and equipment				127	125				248		238
Loss on disposition of property and equipment				5	-				5		-
Amortization of intangible assets (note 6)				2,322	2,504			4,642		5,451
Impairment of definite life intangible assets (note 6)				-	1,431				-	1,431
Loss (gain) on currency forward contracts (note 5)				63	(381)				(190)		60
Total expenses						20,273	21,429			38,857		41,407

Income from operations				(2,034)	1,537			(3,165)		6,709

Other income (expenses):
Interest expense, net				(1,003)	(846)			(1,939)		(1,996)
Gain on sale of Ting customer assets, net (note 17)				4,808	0			10,203			0
Other expense, net				(83)	(85)				(179)		(172)
Total other income (expenses)				3,722	(931)			8,085		(2,168)

Income before provision for income taxes				1,688	606			4,920		4,541

Provision for income taxes (note 8)				(119)	449				964	1,550

Net income for the period				1,807	157			3,956		2,991

Other comprehensive income, net of tax
Unrealized income (loss) on hedging activities (note 5)				248	1,114				616		(120)
Net amount reclassified to earnings (note 5)				(1,021)	200			(1,855)			243
Other comprehensive income net of tax expense (recovery) of ($235) and $398 for thethree months ended June 30, 2021 and June 30, 2020, ($375) and $32 for the six monthsended June 30, 2021 and June 30, 2020 (note 5)
				(773)	1,314			(1,239)			123

Comprehensive income, net of tax for the period			$	1,034 $	1,471 $			2,717 $		3,114


Basic earnings per common share (note 9)			$	0.17 $	0.01 $				0.37 $		0.28

Shares used in computing basic earnings per common share (note 9)						10,633,601	10,567,382	10,625,748		10,589,806

Diluted earnings per common share (note 9)			$	0.17 $	0.01 $				0.37 $		0.28

Shares used in computing diluted earnings per common share (note 9)						10,797,921	10,653,527	10,794,523		10,684,304
		See accompanying notes to consolidated financial statements

	4

Table of Contents
	Tucows Inc.
		Consolidated Statements of Cash Flows

		(Dollar amounts in thousands of U.S. dollars)
	(unaudited)

			For the Three Months Ended June 30,	For the Six Months Ended June 30,
					2021		2020		2021					2020
Cash provided by:
Operating activities:
Net income for the period			$		1,807 $						157 $	3,956 $	2,991
Items not involving cash:
Depreciation of property and equipment					4,211		3,155	7,970	6,145
Impairment of property and equipment						1	1,525	61	1,525
Amortization of debt discount and issuance costs						67					67	134		134
Amortization of intangible assets					2,346		2,830	4,965	6,131
Net amortization contract costs						(248)					95	(255)		124
Impairment of definite life intangible assets						-	1,431	-	1,431
Other						-					223	-		223
Accretion of contingent consideration						95					85	191		172
Deferred income taxes (recovery)						(660)					(917)	(880)	(1,107)
Excess tax benefits on share-based compensation expense						(372)					(164)	(544)		(344)
Net Right of use operating assets/Operating lease liability						174					291	229		112
Loss on disposal of domain names						-	2				1		15
Loss (gain) on change in the fair value of forward contracts						191					(436)	357		(88)
Stock-based compensation					1,209						847	2,231	1,648
Change in non-cash operating working capital:
Accounts receivable					1,057						401	729	2,552
Inventory						(519)					900	(961)	1,804
Prepaid expenses and deposits					(5,058)		(3,247)	(2,792)	(3,222)
Deferred costs of fulfillment						539	(2,204)	(3,572)	(5,057)
Income taxes recoverable					(2,345)						294	(3,034)		794
Accounts payable						568	(1,521)	2,019		250
Accrued liabilities					2,975		2,165	3,768		334
Customer deposits						285					336	410		394
Deferred revenue					(2,734)		2,655	2,615	5,997
Accreditation fees payable						(71)					(31)	6		54
Net cash provided by operating activities					3,518		8,939	17,604	23,012

Financing activities:
Proceeds received on exercise of stock options					1,247						29	1,476		46
Payment of tax obligations resulting from net exercise of stock options						(80)					(165)	(298)		(347)
Repurchase of common stock						-					(164)	-	(3,281)
Proceeds received on loan payable					18,000	-				18,000		-
Payment of loan payable costs						(1)					(7)	(1)		(32)
Net cash (used in) provided by financing activities					19,166						(307)	19,177	(3,614)

Investing activities:
Additions to property and equipment					(21,661)		(12,150)					(35,605)	(22,093)
Investment in securities					(2,012)	-				(2,012)		-
Acquisition of Cedar Holdings Group, net of cash of $66 (note 4)						-	-				-	(8,770)
Acquisition of intangible assets						(63)					(69)	(217)		(69)
Net cash used in investing activities					(23,736)		(12,219)					(37,834)	(30,932)

Increase (decrease) in cash and cash equivalents					(1,052)		(3,587)	(1,053)	(11,534)

Cash and cash equivalents, beginning of period					8,310		12,446	8,311	20,393
Cash and cash equivalents, end of period			$		7,258 $		8,859 $	7,258 $	8,859



Supplemental cash flow information:
Interest paid			$			995 $					686 $	1,940 $	1,840
Income taxes paid, net			$		3,415 $		1,243 $	5,796 $	2,200
Supplementary disclosure of non-cash investing and financing activities:
Property and equipment acquired during the period not yet paid for			$			212 $					635 $	212 $		635
Fair value of shares issued for acquisition of Cedar Holdings Group			$			- $	- $				- $	2,000
Fair value of contingent consideration for acquisition of Cedar Holdings Group			$			- $	7 $				- $	3,072

													See accompanying notes to consolidated financial statements

	5

Table of Contents NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) 1. Organization of the Company:
	Tucows Inc. (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions) provides simple useful services that
help people unlock the power of the Internet. The Company provides US consumers and small businesses with high-speed fixed Internet access in selected towns.The Company also offers Mobile Service Enabler ("MSE") solutions and professional services to retail mobile providers as well as its own retail mobile phone services.The Company is also a global distributor of Internet services, including domain name registration, digital certificates, and email. It provides these services primarilythrough a global Internet-based distribution network of Internet Service Providers, web hosting companies and other providers of Internet services to end-users.

2. Basis of Presentation:
	The accompanying unaudited interim consolidated balance sheets, and the related consolidated statements of operations and comprehensive income and cash
flows reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the financialposition of Tucows and its subsidiaries as at June 30, 2021 and the results of operations and cash flows for the interim periods ended June 30, 2021 and 2020. The resultsof operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for future periods.
	The accompanying unaudited interim consolidated financial statements have been prepared by Tucows in accordance with the rules and regulations of the
United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the Company's annual auditedconsolidated financial statements and accompanying notes have been condensed or omitted. Other than the exception noted below, these interim consolidated financialstatements and accompanying notes follow the same accounting policies and methods of application used in the annual financial statements and should be read inconjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in Tucows' 2020 AnnualReport on Form 10-K filed with the SEC on March 3, 2021 (the “2020 Annual Report”). There have been no material changes to our significant accounting policies andestimates during the three and six months ended June 30, 2021 as compared to the significant accounting policies and estimates described in our 2020 Annual Report,except as described in Note 13 - Segment Reporting and Note 16 - Fair Value Measurement.

3. Recent Accounting Pronouncements: Recent Accounting Pronouncements Not Yet Adopted
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
(“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden of reference rate reform on financial reporting. Theamendments in ASU 2020-04 apply to contract modifications that replace a reference rate affected by reference rate reform and contemporaneous modifications of othercontract terms related to the replacement of the reference rate. The following optional expedients for applying the requirements of certain Topics or Industry Subtopicsin the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance:

	1.	Modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effectiveinterest rate.
2.	Modifications of contracts within the scope of Topic 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments ofthe lease classification and the discount rate or remeasurements of lease payments that otherwise would be required under those Topics for modifications notaccounted for as separate contracts.

3.	Modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that isclearly and closely related to the economic characteristics and risks of the host contract under Subtopic 815-15, Derivatives and Hedging— EmbeddedDerivatives


	The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently charged interest and
standby fees associated with its Amended 2019 Credit Facility (as defined below) based on LIBOR which are partially hedged by interest rate swaps, which are alsobased on LIBOR. Both the Amended 2019 Credit Facility and the interest rate swaps will need to be amended when an alternative reference rate is chosen, at which timewe may adopt some of the practical expedients provided by ASU 2020-04.

4. Acquisitions:
	On January 1, 2020, the Company entered into a Stock Purchase Agreement to purchase all of the issued and outstanding shares of Cedar Holdings Group,
Incorporated (“Cedar”), a fiber Internet provider business based in Durango, Colorado. For more information, see Note 3 - Acquisitions of the 2020 Annual Report.
		6

Table of Contents 5. Derivative Instruments and Hedging Activities:
	The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are foreign
exchange rate risk and interest rate risk.
	Since October 2012, the Company has employed a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred
on its future cash flows related to a portion of payroll, taxes, rent and payments to Canadian domain name registry suppliers that are denominated in Canadian dollarsand are expected to be paid by its Canadian operating subsidiary. In May 2020, the Company entered into a pay-fixed, receive-variable interest rate swap with a Canadianchartered bank to limit the potential interest rate fluctuations incurred on its future cash flows related to variable interest payments on the Amended 2019 Credit Facility.The notional value of the interest rate swap was $70 million.
	The Company does not use hedging forward contracts for trading or speculative purposes. The foreign exchange contracts typically mature between one and
eighteen months, and the interest rate swap matures in June 2023.
	The Company has designated certain of these foreign exchange transactions as cash flow hedges of forecasted transactions under ASU 2017-12, Derivatives and
Hedging (Topic 815) (“ASC Topic 815”). For certain contracts, as the critical terms of the hedging instrument, and of the entire hedged forecasted transaction, are thesame, in accordance with ASC Topic 815, the Company has been able to conclude that changes in fair value and cash flows attributable to the risk of being hedged areexpected to completely offset at inception and on an ongoing basis. The Company has also designated the interest rate swap as a cash flow hedge of expected futureinterest payments. Accordingly, for the foreign exchange and interest rate swap contracts, unrealized gains or losses on the effective portion of these contracts havebeen included within other comprehensive income and reclassified to earnings when the hedged transaction is recognized in earnings. Cash flows from hedgingactivities are classified under the same category as the cash flows from the hedged items in the consolidated statements of cash flows. The fair value of the contracts, asof June 30, 2021 and December 31, 2020, is recorded as derivative instrument assets or liabilities. For certain contracts where the hedged transactions are no longerprobable to occur, the loss on the associated forward contract is recognized in earnings.
	As of June 30, 2021, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $10.8 million, of
which $9.2 million met the requirements of ASC Topic 815 and were designated as hedges.
	As of December 31, 2020, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $31.8 million,
of which $26.8 million met the requirements of ASC Topic 815 and were designated as hedges.
	As of June 30, 2021, we had the following outstanding forward contracts to trade U.S. dollars in exchange for Canadian dollars:

				Weighted average
		Notional amount of		exchange rate of U.S.		Fair value Asset /
	Maturity date (Dollar amounts in thousands of U.S. dollars)		U.S. dollars		dollars		(Liability)

	July - September 2021			10,782		1.4361		1,703
		$		10,782		1.4361 $		1,703

	As of June 30, 2021 and December 31, 2020, the notional amount of the Company's interest rate swap designated as a cash flow hedge was $70 million.
Fair value of derivative instruments and effect of derivative instruments on financial performance
	The effect of these derivative instruments on our consolidated financial statements were as follows (amounts presented do not include any income tax effects).
Fair value of derivative instruments in the consolidated balance sheets
								As of December
						As of June 30,		31, 2020 Fair
						2021 Fair ValueAsset (Liability)		Value Asset
Derivatives (Dollar amounts in thousands of U.S. dollars)			Balance Sheet Location					(Liability)
Foreign Currency forward contracts designated as cash flow hedges (net)		Derivative instruments				$	1,456 $		3,254
Interest rate swap contract designated as a cash flow hedge (net)		Derivative instruments					(26) $		(213)
Foreign Currency forward contracts not designated as cash flow hedges (net)		Derivative instruments					247		606
Total foreign currency and interest swap forward contracts (net)		Derivative instruments				$	1,677 $		3,647

		7

Table of Contents Movement in accumulated other comprehensive income (AOCI) balance for the three months ended June 30, 2021 (Dollar amounts in thousands of U.S. dollars)
	Gains and losses on
		cash flow hedges		Tax impact	Total AOCI
Opening AOCI balance - March 31, 2021	$	2,432 $		(562) $	1,870
Other comprehensive income (loss) before reclassifications		322		(74)	248
Amount reclassified from AOCI		(1,330)		309	(1,021)
Other comprehensive income (loss) for the three months ended June 30, 2021		(1,008)		235	(773)

Ending AOCI Balance - June 30, 2021	$	1,424 $		(327) $	1,097
Movement in accumulated other comprehensive income (AOCI) balance for the six months ended June 30, 2021 (Dollar amounts in thousands of U.S. dollars)
	Gains and losses on
		cash flow hedges		Tax impact	Total AOCI
Opening AOCI balance - December 31, 2020	$	3,038 $		(702) $	2,336
Other comprehensive income (loss) before reclassifications		802		(186)	616
Amount reclassified from AOCI		(2,416)		561	(1,855)
Other comprehensive income (loss) for the six months ended June 30, 2021		(1,614)		375	(1,239)

Ending AOCI Balance - June 30, 2021	$	1,424 $		(327) $	1,097
Effects of derivative instruments on income and other comprehensive income (OCI) for the three months ended June 30, 2021 and 2020 are as follows (Dollaramounts in thousands of U.S. dollars)
						Amount of Gain or	Location of Gain or(Loss) Reclassified	Amount of Gain or
						(Loss) Recognized in	(Loss) Reclassified
						OCI, net of tax, on	from AOCI into	from AOCI into
Derivatives in Cash Flow Hedging Relationship						Derivative		Income		Income
		Operating expenses $			1,088
Foreign currency forward contracts for the three months ended June 30, 2021	$	275 Cost of revenues		$	268

			Interest expense,net
Interest rate swap contract for the three months ended June 30, 2021	$	(27)		$	(26)

		Operating expenses $			(201)
Foreign currency forward contracts for the three months ended June 30, 2020	$	1,314 Cost of revenues		$	(58)

			Interest expense,net
Interest rate swap contract for the three months ended June 30, 2020	$	-		$	-
Effects of derivative instruments on income and other comprehensive income (OCI) for the six months ended June 30, 2021 and 2020 are as follows (Dollar amountsin thousands of U.S. dollars)
						Amount of Gain or	Location of Gain or(Loss) Reclassified	Amount of Gain or
						(Loss) Recognized in	(Loss) Reclassified
						OCI, net of tax, on	from AOCI into	from AOCI into
Derivatives in Cash Flow Hedging Relationship						Derivative		Income		Income
		Operating expenses $			2,037
Foreign currency forward contracts for the six months ended June 30, 2021	$	509 Cost of revenues		$	424

			Interest expense,net
Interest rate swap contract for the six months ended June 30, 2021	$	107		$	(45)

		Operating expenses $			(246)
Foreign currency forward contracts for the six months ended June 30, 2020	$	123 Cost of revenues		$	(71)

			Interest expense,net
Interest rate swap contract for the six months ended June 30, 2020	$	-		$	-

							In addition to the above, for those foreign currency forward contracts not designated as hedges, the Company recorded the following fair value adjustments on
settled and outstanding contracts (Dollar amounts in thousands of U.S. dollars):

		Three Months Ended June 30,							Six Months Ended June 30,
Forward currency contracts not designated as hedges:		2021						2020		2021	2020

Gain (loss) on settlement	$					129 $	(55) $	549 $		(148)

Gain (loss) on change in fair value	$					(192) $	436 $	(359) $		88

									8

Table of Contents 6. Goodwill and Other Intangible Assets Goodwill:
	Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our
acquisitions.
	The Company's Goodwill balance is $116.3 million as of June 30, 2021 and $116.3 million as of December 31, 2020. The Company's goodwill relates 7% ($8.6 million)
to its Fiber Internet Services operating segment, nil to its Mobile Services operating segment and 93% ($107.7 million) to its Domain Services operating segment.
	Goodwill is not amortized, but is subject to an annual impairment test, or more frequently if impairment indicators are present. No impairment was recognized
during the three and six months ended June 30, 2021 and 2020. Other Intangible Assets:
	Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The
Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company hasthe exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. Theindefinite life intangible assets are not amortized but are subject to impairment assessments performed throughout the year. As part of the normal renewal evaluationprocess during the periods ended June 30, 2021 and June 30, 2020, the Company assessed that all domain names that were originally acquired in the June 2006acquisition of Mailbank.com Inc. that were up for renewal, should be renewed.
	Intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of two to
fifteen years.
	Net book value of acquired intangible assets consist of the following (Dollar amounts in thousands of U.S. dollars):
			Direct
		Surname	navigation
		domain	domain		Customer	Network
			names		names		Brand		relationships Technology	rights		Total
		indefinite	indefinite
	Amortization period		life								life		7 years	3 - 7 years 2 - 7 years	15 years

	Balances, March 31, 2021	$	11,156 $	1,135 $	6,503 $						25,016 $	- $	1,168 $		44,978
	Acquisition of customer relationships		-	-	-						61	-	-	61
	Acquisition of network rights		-	-	-						-	-	2		2
	Amortization expense		-	-	(517)						(1,804)	-	(25)	(2,346)
	Balances, June 30, 2021	$	11,156 $	1,135 $	5,986 $						23,273 $	- $	1,145 $		42,695

			Direct
		Surname	navigation
		domain	domain		Customer	Network
			names		names		Brand		relationships Technology	rights		Total
		indefinite	indefinite
	Amortization period		life								life		7 years	3 - 7 years 2 - 7 years	15 years

	Balances, December 31, 2020	$	11,157 $	1,135 $	7,021 $						26,664 $	274 $	1,193 $		47,444
	Acquisition of customer relationships		-	-	-						215	-	-	215
	Acquisition of network rights		-	-	-						-	-	2		2
	Additions to/(disposals from) domain
	portfolio, net		(1)	-	-						-	-	-		(1)
	Amortization expense		-	-	(1,035)						(3,606)	(274)	(50)	(4,965)
	Balances, June 30, 2021	$	11,156 $	1,135 $	5,986 $						23,273 $	- $	1,145 $		42,695
	The following table shows the estimated amortization expense for each of the next 5 years, assuming no further additions to acquired intangible assets are made
(Dollar amounts in thousands of U.S. dollars):

							Year ending
							December 31,
	Remainder of 2021					$		4,689
	2022							9,376
	2023							8,683
	2024							3,227
	2025							2,587
	Thereafter							1,842
	Total					$		30,404

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Table of Contents 7. Loan Payable:
Amended 2019 Credit Facility

	On June 14, 2019, the Company and its wholly-owned subsidiaries, Tucows.com Co., Ting Fiber, Inc., Ting Inc., Tucows (Delaware) Inc. and Tucows (Emerald),
LLC entered into an Amended and Restated Senior Secured Credit Agreement with Royal Bank of Canada (“RBC”), as administrative agent, and lenders party thereto(collectively with RBC, the “Lenders”) under which the Company has access to an aggregate of up to $240 million in funds, which consists of $180 million guaranteedcredit facility and a $60 million accordion facility. On November 27, 2019, the Company entered into Amending Agreement No. 1 to the Amended and Restated SeniorSecured Credit Agreement (collectively with the Amended and Restated Senior Secured Credit Agreement, the “Amended 2019 Credit Facility”) to amend certain definedterms in connection with the Cedar acquisition.
	The Amended 2019 Credit Facility replaced a secured Credit Agreement dated January 20, 2017 with Bank of Montreal, RBC and Bank of Nova Scotia.

	The obligations of the Company under the Amended 2019 Credit Agreement are secured by a first priority lien on substantially all of the personal property and
assets of the Company and has a four-year term, maturing on June 13, 2023.
Credit Facility Terms

	The Amended 2019 Credit Facility is revolving with interest only payments with no scheduled repayments during the term.

	The Amended 2019 Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The Amended
2019 Credit Facility requires that the Company to comply with the following financial covenants: (i) at all times, a Total Funded Debt to Adjusted EBITDA Ratio (asdefined in the Amended 2019 Credit Agreement) of 3.50:1; and (ii) with respect to each fiscal quarter, an Interest Coverage Ratio (as defined in the Amended 2019 CreditAgreement) of not less than 3.00:1. Further, the Company’s maximum annual Capital Expenditures cannot exceed 110% of the forecasted capital expenditures of its annualbusiness plan. In addition, share repurchases require the Lenders’ consent if the Company’s Total Funded Debt to Adjusted EBITDA ratio exceeds 2.00:1. During thethree and six months ended June 30, 2021, and the three and six months ended June 30, 2020 the Company was in compliance with these covenants.

	Borrowings under the Amended 2019 Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to Adjusted EBITDA ratio
and the availment type as follows:
			If Total Funded Debt to EBITDA is:
			Greater than or	Greater than or
			equal to 1.00 and	equal to 2.00 and	Greater than or
Availment type or fee		Less than 1.00	less than 2.00		less than 2.50		equal to 2.50
Canadian dollar borrowings based on Bankers’ Acceptance or U.S. dollarborrowings based on LIBOR (Margin)
						1.50%	1.85%	2.35%	2.85%
Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowingsbased on Base Rate (Margin)
						0.25%	0.60%	1.10%	1.60%
Standby fees						0.30%	0.37%	0.47%	0.57%

	The following table summarizes the Company’s borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars):
							June 30, 2021	December 31, 2020

Revolver		$				140,400 $	122,400
Less: unamortized debt discount and issuance costs			(533)	(667)
Total loan payable						139,867	121,733
Less: loan payable, current portion			-					-
Loan payable, long-term portion		$				139,867 $	121,733
	The following table summarizes our scheduled principal repayments as of June 30, 2021 (Dollar amounts in thousands of U.S. dollars):
Remainder of 2021			$					-
2022								-
2023				140,400
			$	140,400
8. Income Taxes:
For the three months ended June 30, 2021, the Company recorded an income tax recovery of $0.1 million on net income before income taxes of $1.7 million, using anestimated effective tax rate for the fiscal year ending December 31, 2021 (“Fiscal 2021”). Our income tax recovery includes a $0.5 million tax recovery related to discreteadjustments resulting from foreign exchange and mark-to-market adjustments as well as the inclusion of a $0.4 million tax recovery related to ASU No. 2016-09—Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which requires all excess taxbenefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense (recovery).

Comparatively, for the three months ended June 30, 2020, the Company recorded an income tax expense of $0.4 million on income before taxes of $0.6 million, using anestimated tax rate for the fiscal year ending December 31, 2020 (“Fiscal 2020”) adjusted for certain minimum state taxes. Our income tax expense includes a $0.5 milliontax expense related to discrete adjustments resulting from foreign exchange and mark-to-market adjustments as well as the inclusion of a $0.1 million tax recoveryrelated to ASU 2016-09. Our effective tax rate for the three months ended June 30, 2020 is also adversely affected by discrete losses of $3.7 million related to theimpairment of Ting TV and Roam Mobility assets, the tax benefit of which has only been partially recognized. For the six months ended June 30, 2021, the Company recorded an income tax expense of $1.0 million on income before income taxes of $4.9 million, using an estimatedeffective tax rate for Fiscal 2021. Our income tax expense includes a $0.8 million tax recovery related to discrete adjustments resulting from foreign exchange and mark-to-market adjustments as well as the inclusion of a $0.2 million tax recovery related to ASU No. 2016-09.

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Table of Contents
Comparatively, for the six months ended June 30, 2020, the Company recorded an income tax expense of $1.6 million on income before taxes of $4.5 million, using anestimated effective tax rate for Fiscal 2020 adjusted for certain minimum state taxes. Our income tax expense includes a $0.2 million tax recovery related to ASU 2016-09. Our effective tax rate for the six months ended June 30, 2020 is also adversely affected by discrete losses of $3.7 million related to the impairment of Ting TV andRoam Mobility assets, the tax benefit of which has only been partially recognized.
	In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which thosetemporary differences become deductible. Management considers projected future taxable income, uncertainties related to the industry in which the Companyoperates, and tax planning strategies in making this assessment.

	In connection with the eNom acquisition in 2017, we acquired deferred tax liabilities primarily composed of prepaid registry fees. As a result, we aligned our tax
methodology pertaining to the deductibility of prepaid registry fees for our other subsidiaries. In the first quarter of 2019, we determined that we were in technicalviolation with respect to the administrative application of the accounting method change relating to the deductibility of prepaid registry fees for these additionalsubsidiaries. In February 2019, the Company filed an application for relief ("9100 Relief") to correct the issue. In November 2019, the Company was granted 9100 Reliefand was given 30 days to file the appropriate forms based on prescribed instructions. The Company filed the forms in December 2019 and now awaits the final IRSresponse and acceptance of the change in accounting method. Management is of the view that it is more likely than not that the IRS will accept the 9100 Relief andfiling of the prescribed forms. As such, no additional tax uncertainties or related interest or penalties have been recorded as at June 30, 2021.

	The Company recognizes accrued interest and penalties related to income taxes in income tax expense. The Company did not have significant interest and
penalties accrued at June 30, 2021 and December 31, 2020 respectively.

9. Basic and Diluted Earnings per Common Share: The following table reconciles the numerators and denominators of the basic and diluted earnings per common share computation (Dollar amounts in thousands of USdollars, except for share data):
			Three Months Ended June 30,	Six Months Ended June 30,
					2021		2020		2021				2020

Numerator for basic and diluted earnings per common share:
Net income for the period		$			1,807 $	157 $				3,956 $	2,991

Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares outstanding					10,633,601		10,567,382	10,625,748				10,589,806
Effect of outstanding stock options					164,320	86,145	168,775	94,498
Diluted weighted average number of shares outstanding					10,797,921		10,653,527	10,794,523				10,684,304

Basic earnings per common share		$				0.17 $	0.01 $				0.37 $	0.28

Diluted earnings per common share		$				0.17 $	0.01 $				0.37 $	0.28


	For the three months ended June 30, 2021, options to purchase 43,445 common shares were not included in the computation of diluted income per common share
because the options’ exercise price was greater than the average market price of the common shares for the period as compared to the three months ended June 30, 2020,where 734,388 outstanding options were not included in the computation.
	For the six months ended June 30, 2021, options to purchase 42,752 common shares were not included in the computation of diluted income per common share
because the options’ exercise price was greater than the average market price of the common shares for the period as compared to the six months ended June 30, 2020,where 734,388 outstanding options were not included in the computation.

10. Revenue: Significant accounting policy
	The Company’s revenues are derived from (a) the provisioning of retail fiber Internet services in our Fiber Internet Services segment, (b) the provisioning of
wholesale mobile platform services, professional services and the provisioning of retail mobile services in our Mobile Services segment; and from (c) domain nameregistration contracts, other domain related value-added services, domain sale contracts, and other advertising revenue in our Domain Services segment. Amountsreceived in advance of meeting the revenue recognition criteria described below are recorded as deferred revenue. All products are generally sold without the right ofreturn or refund.
	Revenue is measured based on consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third
parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

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Table of Contents Nature of goods and services
	The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed
information about reportable segments, see Note 13 – Segment Reporting.
(a) Fiber Internet Services

	The Company generates Fiber Internet Services revenues primarily through the provisioning of fixed high-speed Internet access, Ting Internet, as well as
billing solutions to Internet Service Providers (“ISPs”).
	Fiber Internet services (Ting Internet) contracts provide customers Internet access at their home or business through the installation and use of our fiber optic
network. Ting Internet contracts are generally prepaid and grant customers with unlimited bandwidth based on a fixed price per month basis. Because consideration iscollected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access. Though the Companydoes not consider the installation of fixed Internet access to be a distinct performance obligation, the fees related to installation are immaterial and therefore revenue isrecognized as billed.
	Ting Internet access services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract
following each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Internet customers is computed based on the customer’s activation date. Inaddition, revenues associated with the sale of Internet hardware to subscribers are recognized when title and risk of loss is transferred to the subscriber and shipmenthas occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.
	In those cases, where payment is not received at the time of sale, revenue is not recognized at contract inception unless the collection of the related accounts
receivable is reasonably assured. The Company records costs that reflect expected refunds, rebates and credit card charge-backs as a reduction of revenues at thetime of the sale based on historical experiences and current expectations.
(b) Mobile Services
	The Company generates Mobile Services revenues through the provisioning of mobile services to wholesale and retail customers. Mobile services consist of
mobile platform services provided to wholesale customers to whom we also provide other professional services. Mobile services also consist of retail servicesprovided to Ting Mobile customers.
	Mobile platform services agreements contain both MSE services and professional services. MSE services represent a single promise to provide continuous
access (i.e. a stand-ready performance obligation) to the platform and software solutions. As each month of providing access to the platform is substantially thesame and the customer simultaneously receives and consumes the benefits as access is provided, the performance obligation is comprised of a series of distinctservice periods. Consideration for these arrangements is variable each month depending on the number of subscribers hosted on the platform. The Company alsoprovides professional services as a part of the mobile platform services agreements. These professional services can include implementation, training, consulting orsoftware development/modification services. Revenues from arrangements to provide professional services are generally distinct from the other promises in thecontract(s) and are recognized as the related services are performed. Consideration payable under the professional service arrangements is included with the variableconsideration from the mobile platform services, which would represent variable consideration estimated using the most likely amount based on the range of hoursexpected to be incurred in providing the services. Where consideration for professional services is included in the consideration for mobile platform services, theCompany estimates the standalone selling price (“SSP”) for professional services based on observable standalone sales, and applies the residual approach toestimate the SSP for mobile platform services. The total variable consideration is estimated at contract inception (considering any constraints that may apply andupdating the estimates as new information becomes available) and the transaction price is allocated to the performance obligations based on the relative SSP basisand recognized over the period to which it relates.

	Other professional services consist of professional service arrangements that are billed separately on a time-and-materials basis as well as revenues from the
Transitional Services Agreement (“TSA”) with DISH Wireless L.L.C. ("DISH"). For professional services billed separately on a time-and-materials basis, revenues arerecognized based on the actual hours of services provided. Under the TSA, the Company will provide certain other services such as customer service, marketing andfulfillment services. DISH has the option to terminate services provided under the TSA throughout the term of the agreement, which is for five years effective August1, 2020. Consideration payable under this arrangement is based on cost plus margin, and revenues are recognized as the services are provided to DISH each monthunder the ‘as-invoiced’ practical expedient.
	Retail mobile services (Ting Mobile) wireless usage contracts grant customers access to standard talk, text and data mobile services. Some Ting Mobile
contracts are billed based on the actual amount of monthly services utilized by each customer during their billing cycle. Voice minutes, text messages and megabytesof data are each billed separately based on a tiered pricing program. Some contracts are billed a flat rate for unlimited talk and text plus a fixed amount of data. Allcustomers are billed on a postpaid basis. The Company recognizes revenue for Ting Mobile usage based on the actual amount of monthly services utilized by eachcustomer.
	Ting Mobile services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following
each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Mobile and Ting Internet customers is computed based on the customer’s activationdate. In order to recognize revenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed from the end of each billingcycle to the end of each reporting period. In addition, revenues associated with the sale of wireless devices and accessories and Internet hardware to subscribers arerecognized when title and risk of loss is transferred to the subscriber and shipment has occurred. Incentive marketing credits given to customers are recorded as areduction of revenue.
	In those cases, where payment is not received at the time of sale, revenue is not recognized at contract inception unless the collection of the related accounts
receivable is reasonably assured. The Company records costs that reflect expected refunds, rebates and credit card charge-backs as a reduction of revenues at thetime of the sale based on historical experiences and current expectations.

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Table of Contents
	(c)	Domain Services

	Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive
right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new,renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registrationperiod. Though fees are collected upfront, revenue from domain registrations are recognized rateably over the registration period as domain registration contractscontain a ‘right to access’ license of IP, which is a distinct performance obligation measured over time. The registration period begins once the Company hasconfirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.
	Domain related value-added services like digital certifications, WHOIS privacy, website hosting and hosted email provide our resellers and retail registrant
customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services are considered distinctperformance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain related value-addedservices are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction ofthe performance obligations.
	The Company is an ICANN accredited registrar. Thus, the Company is the primary obligor with our reseller and retail registrant customers and is responsible for
the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller andretail registrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to thosecustomers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.

	The Company also sells the rights to the Company’s portfolio domains or names acquired through the Company’s domain expiry stream. Revenue generated
from sale of domain name contracts, containing a distinct performance obligation to transfer the domain name rights under the Company’s control, is generallyrecognized once the rights have been transferred and payment has been received in full.
	Advertising revenue is derived through domain parking monetization, whereby the Company contracts with third-party Internet advertising publishers to direct
web traffic from the Company’s domain expiry stream domains and Internet portfolio domains to advertising websites. Compensation from Internet advertisingpublishers is calculated variably on a cost-per-action basis based on the number of advertising links that have been visited in a given month. Given that the variableconsideration is calculated and paid on a monthly basis, no estimation of variable consideration is required.
Disaggregation of Revenue
	The following is a summary of the Company’s revenue earned from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):

			Three Months Ended June 30,	Six Months Ended June 30,
					2021		2020		2021			2020
Fiber Internet Services:
Fiber Internet Services		$			5,825 $	4,414	11,196	8,722

Mobile Services:
Retail mobile services					2,548	17,567 $				4,563 $	37,715
Mobile platform services					2,457	-				2,806	-
Other professional services					2,001	-				3,917	-
	Total Mobile				7,006	17,567	11,286	37,715

Domain Services:
Wholesale
Domain Services					47,883	46,206	94,874	92,169
Value Added Services					5,482	4,741	10,562	9,049
	Total Wholesale				53,365	50,947	105,436				101,218

Retail					8,897	9,194	18,050	18,452
Total Domain Services					62,262	60,141	123,486				119,670

		$			75,093 $	82,122 $	145,968 $				166,107

	During the three and six months ended June 30, 2021 and the three and six months ended June 30, 2020 no customer accounted for more than 10% of total
revenue.
	At June 30, 2021, one customer represented 45% of accounts receivables.
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Table of Contents
	The following is a summary of the Company’s cost of revenue from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):
			Three Months Ended June 30,	Six Months Ended June 30,
					2021		2020		2021				2020

Fiber Internet Services:
Fiber Internet Services		$			3,026 $	1,665 $				5,661 $	3,381

Mobile Services:
Retail mobile services					1,487	8,660				2,541	18,517
Mobile platform services						93	-				151	-
Other professional services					1,740	-				3,406	-
	Total Mobile				3,320	8,660				6,098	18,517

Domain Services:
Wholesale
Domain Services					37,707	36,354	73,483	72,823
Value Added Services						583	734				1,180	1,489
	Total Wholesale				38,290	37,088	74,663	74,312

Retail					4,497	4,377				8,898	8,768
Total Domain Services					42,787	41,465	83,561	83,080

Network Expenses:
Network, other costs					3,612	2,485				6,850	4,901
Network, depreciation and amortization costs					4,108	3,356				8,045	6,587
Network, impairment						1	1,525				61	1,525
Total Network Expenses					7,721	7,366	14,956	13,013

		$			56,854 $	59,156 $	110,276 $				117,991
Contract Balances
	The following table provides information about contract liabilities (deferred revenue) from contracts with customers. The Company accounts for contract assets
and liabilities on a contract-by-contract basis, with each contract presented as either a net contract asset or a net contract liability accordingly.
	Given that Company’s long-term contracts with customers are billed in advance of service, the Company’s contract liabilities relate to amounts recorded as
deferred revenues. The Company does not have material streams of contracted revenue that have not been billed.
	Deferred revenue primarily relates to the portion of the transaction price received in advance related to the unexpired term of domain name registrations and other
domain related value-added services, on both a wholesale and retail basis, net of external commissions. To a lesser extent, deferred revenue also includes a portion of thetransaction price received from mobile platform services, which is related to professional services.
	Significant changes in deferred revenue for the six months ended June 30, 2021 were as follows (Dollar amounts in thousands of U.S. dollars):

							June 30, 2021

Balance, beginning of period						$	152,245
Deferred revenue							106,486
Recognized revenue							(103,871)
Balance, end of period						$	154,860
Remaining Performance Obligations:
	For retail mobile and internet access services, where the performance obligation is part of contracts that have an original expected duration of one year or less
(typically one month), the Company has elected to apply a practical expedient to not disclose revenues expected to be recognized in the future related performanceobligations that are unsatisfied (or partially unsatisfied).
	Although domain registration contracts are deferred over the lives of the individual contracts, which can range from one to ten years, approximately 80 percent of
our deferred revenue balance related to domain contracts is expected to be recognized within the next twelve months.
	Deferred revenue related to Exact hosting contracts is also deferred over the lives of the individual contracts, which are expected to be fully recognized within the
next twelve months.
	Professional service revenue related to mobile platform services is deferred over a maximum of twelve-month periods.

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Table of Contents 11. Costs to obtain and fulfill a Contract Deferred costs of fulfillment
	Deferred costs to fulfill contracts primarily consist of domain registration costs which have been paid to a domain registry, and are capitalized as deferred costs of
fulfillment. These costs are deferred and amortized over the life of the domain which generally ranges from one to ten years. The Company also defers certaintechnology design and data migration costs it incurs to fulfil its performance obligations contained in our MSE arrangements. For the six months ended June 30, 2021,the Company deferred $92.3 million and amortized $88.7 million of contract costs. There was no impairment loss recognized in relation to the costs capitalized during thesix months ended June 30, 2021. Amortization expense of deferred costs is primarily included in cost of revenue.
	The breakdown of the movement in the prepaid domain name registry and ancillary services fees balance for the six months ended June 30, 2021 is as
follows (Dollar amounts in thousands of U.S. dollars).

			June 30, 2021

Balance, beginning of period		$		111,066
Deferral of costs			92,308
Recognized costs				(88,736)
Balance, end of period		$		114,638
12. Leases
	We lease datacenters, corporate offices and fiber-optic cables under operating leases. The Company does not have any leases classified as finance leases. Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may
include options to terminate the leases within 1 year.
	The components of lease expense were as follows (Dollar amounts in thousands of U.S. dollars):
					For the Three Months Ended June 30, For the Six Months Ended June 30,
						2021		2020		2021				2020
Operating Lease Cost (leases with a total term greater than 12 months)									$603	$527		$1,138	$1,074
Short-term Lease Cost (leases with a total term of 12 months or less)									33	130		83		374
Variable Lease Cost									66	145		242		273
Total Lease Cost									$702	$802		$1,463	$1,721
	Lease Cost is presented in general and administrative expenses and network expenses within our consolidated statements of operations and comprehensive
income.
	Information related to leases was as follows (Dollar amounts in thousands of U.S. dollars):
					For the Three Months Ended June 30, For the Six Months Ended June 30,
Supplemental cashflow information:						2021		2020		2021				2020
Operating Lease - Operating Cash Flows (Fixed Payments)					$				560 $	429 $		1,112 $		987
Operating Lease - Operating Cash Flows (Liability Reduction)					$				476 $	359 $		948 $		797
New ROU Assets - Operating Leases					$				1,169 $	36 $		2,563 $		911
Supplemental balance sheet information related to leases:
											June 30, 2021		December 31, 2020
Weighted Average Discount Rate											3.30%				3.60%
Weighted Average Remaining Lease Term											7.87 yrs				8.35 yrs

	Maturity of lease liability as of June 30, 2021 (Dollar amounts in thousands of U.S. dollars):

								June 30, 2021
Remaining of 2021							$	1,311
2022								2,658
2023								2,670
2024								1,867
2025								1,248
Thereafter								4,246
Total future lease payments								14,000
Less imputed interest								1,528
Total							$	12,472

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Table of Contents
	Operating lease payments include payments under the non-cancellable term, without any additional amounts related to options to extend lease terms that are
reasonably certain of being exercised.
	As of June 30, 2021, we have entered into lease agreements for total payments of $4.1 million that have not yet commenced, and therefore are not included in the
lease liability.
	The Company has elected to use the single exchange rate approach when accounting for lease modifications. Under the single exchange rate approach, the entire
right of use asset is revalued at the date of modification in the Company’s functional currency provided the re-measurement is not considered a separate contract or ifthe re-measurement is related to change the lease term or assessment of a lessee option to purchase the underlying asset being exercised. 13. Segment Reporting:
	Reportable operating segments:

	We are organized and managed based on three operating segments which are differentiated primarily by their services, the markets they serve and the
regulatory environments in which they operate. No operating segments have been aggregated to determine our reportable segments.

	During the first quarter of 2021, the Company completed a reorganization of its reporting structure into three operating and reportable segments: Fiber Internet
Services, Mobile Services and Domain Services. Previously, we disclosed two operating and reportable segments: Network Access Services and Domain Services.

	The change to our reportable operating segments was the result of a shift in our business and management structures that was initiated in 2020 and
completed during the first quarter of 2021. The operations supporting what was previously known as our Network Access Services segment have become increasinglyoperationally distinct between our mobile services (which includes both retail mobile MNVO based services and wholesale MSE services) and our fiber Internetservices which were also included in our Network Access Services segment. As a result, commencing in the first quarter of 2021, our Chief Executive Officer ("CEO"),who is also our chief operating decision maker, reviews the operating results of Mobile Services and Fiber Internet Services as two distinct segments in order to makekey operating decisions as well as evaluate segment performance. Certain corporate costs are excluded from segment EBITDA results as they are centrally managedand not monitored by or reported to our CEO by segment, including Finance, Human Resources, Legal, Corporate IT, depreciation and amortization expense orimpairments, interest expense, stock-based compensation and other income and expense items not monitored as part of our segment operations. Our comparativeperiod financial results have also been reclassified to reflect the reorganized segment structure.

	Our reportable operating segments and their principal activities consist of the following:

	1. Fiber Internet Services - This segment derives revenue from the retail high speed Internet access to individuals and small businesses primarily through
the Ting website, and other revenues including billing solutions to small ISPs. Revenues are generated in the United States.

	2. Mobile Services – This segment derives revenue from MSE platform services and professional services to wholesale customers. This segment also
derives revenue from the retail sale of mobile phones, retail telephony services to individuals and small businesses primarily through the Ting website. Revenues aregenerated in the United States.

	3. Domain Services – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The
Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the saleof retail Internet domain name registration and email services to individuals and small businesses. Domain Services revenues are attributed to the country in which thecontract originates, primarily Canada and the United States.
	Key measure of segment performance:

	The CEO, as the chief operating decision maker, regularly reviews the operations and performance by segment. The CEO reviews segment gross margin and
adjusted EBITDA (as defined below) as (i) key measures of performance for each segment and (ii) to make decisions about the allocation of resources.

	During the first quarter of 2021, the Company changed its key measures of segment performance to segment gross margin and adjusted EBITDA. Previously,
we disclosed one key measure of segment performance, gross profit.

	The change to our key measures of segment performance was also a result of shift in our business and management structures that were completed in the first
quarter of 2021, which created more distinction between the operations supporting each reportable operating segment. As a result, commencing in the first quarter of2021, our CEO, who is also our chief operating decision maker now regularly reviews segment gross margin and segment adjusted EBITDA to evaluate segmentperformance and make key operating decisions.

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Table of Contents
	Our key measures of segment performance and their definitions are:

	1. Segment gross margin - net revenues less Direct cost of revenues attributable to each segment.

	2. Segment adjusted EBITDA - segment gross margin as well as the recurring gain on sale of Ting Customer Assets, less certain operating expenses
attributable to each segment, such as sales and marketing, technical operations and development, general and administration expenses but excludes gains and lossesfrom unrealized foreign currency, stock-based compensation and transactions that are one-time in nature and not indicative of on-going performance, includingacquisition and transition costs. Certain corporate costs are excluded from segment adjusted EBITDA results as they are centrally managed and not monitored by orreported to our CEO by segment, including Finance, Human Resources, Legal, Corporate IT, depreciation and amortization expense or impairments, interest expense,stock-based compensation and other income and expense items not monitored as part of our segment operations.

	Our comparative period financial results have also been reclassified to reflect the current key measures of segment performance.
	The Company believes that both segment gross margin and adjusted EBITDA measures are important indicators of the operational strength and performance
of its segments, by identifying those items that are not directly a reflection of each segment’s performance or indicative of ongoing operational and profitabilitytrends. Segment gross margin and segment adjusted EBITDA both exclude depreciation of property and equipment, amortization of intangibles assets, impairment ofindefinite life intangible assets that are included in the measurement of income before provision for income taxes pursuant to generally accepted accounting principles("GAAP"). Accordingly, adjusted EBITDA should be considered in addition to, but not as a substitute for net income, cash flow provided by operating activities andother measures of financial performance prepared in accordance with GAAP. Total assets and total liabilities are centrally managed and are not reviewed at the segmentlevel by the CEO. The Company follows the same accounting policies for the segments as those described in “Note 2 – Significant Accounting Policies”, and “Note 10– Revenue”.

	Information by reportable segments (with the exception of disaggregated revenue, which is discussed in “Note 10 – Revenue”), which is regularly reported to
the chief operating decision maker, and the reconciliations thereof to our income before taxes, are set out in the following tables (Dollar amounts in thousands of USdollars):

		Fiber Internet		Domain		Consolidated
			Services	Mobile Services	Services	Corporate	Totals
For the Three Months Ended June 30, 2021

Net Revenues		$	5,825 $					7,006 $	62,262 $	- $	75,093
Direct cost of revenues			3,026					3,320	42,787	-	49,133
Segment Gross Margin			2,799					3,685	19,475	-	25,960

Adjusted EBITDA		$	(3,320) $					5,284 $	12,750 $	(3,556) $	11,158

		Fiber Internet		Domain		Consolidated
			Services	Mobile Services	Services	Corporate	Totals
For the Three Months Ended June 30, 2020

Net Revenues		$	4,414 $					17,567 $	60,141 $	- $	82,122
Direct cost of revenues			1,665					8,659	41,466	-	51,790
Segment Gross Margin			2,749					8,908	18,675	-	30,331

Adjusted EBITDA		$	(1,071) $					3,868 $	12,351 $	(2,973) $	12,175

		Fiber Internet		Domain		Consolidated
			Services	Mobile Services	Services	Corporate	Totals
Six Months Ended June 30, 2021

Net Revenues		$	11,196 $					11,286 $	123,486 $	- $	145,968
Direct cost of revenues			5,661					6,098	83,561	-	95,320
Segment Gross Margin			5,535					5,188	39,925	-	50,648

Adjusted EBITDA		$	(5,913) $					9,763 $	26,570 $	(6,539) $	23,881

		Fiber Internet		Domain		Consolidated
			Services	Mobile Services	Services	Corporate	Totals
Six Months Ended June 30, 2020

Net Revenues		$	8,722 $					37,715 $	119,670 $	- $	166,107
Direct cost of revenues			3,380					18,517	83,081	-	104,978
Segment Gross Margin			5,342					19,198	36,589	-	61,129

Adjusted EBITDA		$	(2,133) $					8,856 $	23,898 $	(5,765) $	24,856

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Table of Contents Reconciliation of Adjusted EBITDA to Income before Provision for Income Taxes
		Three Months Ended June 30,	Six Months Ended June 30,
(In Thousands of US Dollars)				2021		2020		2021						2020
(unaudited)		(unaudited)					(unaudited)		(unaudited)						(unaudited)

Adjusted EBITDA	$			11,158 $	12,175 $	23,881 $	24,856
Depreciation of property and equipment				4,211	3,155						7,970	6,145
Impairment and loss on disposition of property and equipment					6	1,525						66	1,525
Amortization of intangible assets				2,346	2,830						4,965	6,131
Impairment of definite life intangible assets					-	1,431						-	1,431
Interest expense, net				1,003	846						1,939	1,996
Accretion of contingent consideration					95	85						191	172
Stock-based compensation				1,209	847						2,231	1,648
Unrealized loss (gain) on change in fair value of forward contracts					191	(436)						357	(88)
Unrealized loss (gain) on foreign exchange revaluation of foreign denominatedmonetary assets and liabilities
					42	441						106	399
Acquisition and other costs1					367	845						1,136	956

Income before provision for income taxes	$			1,688 $	606 $						4,920 $	4,541
1Acquisition and other costs represents transaction-related expenses, transitional expenses, such as redundant post-acquisition expenses, primarily related to ouracquisition of Ascio in March 2019, Cedar in January 2020, and the disposition of certain Ting Mobile assets in August 2020. Expenses include severance or transitionalcosts associated with department, operational or overall company restructuring efforts, including geographic alignments.
									(b) The following is a summary of the Company’s property and equipment by geographic region (Dollar amounts in thousands of US dollars):

											June 30, 2021	December 31, 2020

									Canada	$	3,120 $					2,521
									United States		141,028					114,968
									Europe		39						41
										$	144,187 $					117,530

									(c) The following is a summary of the Company’s amortizable intangible assets by geographic region (Dollar amounts in thousands of US dollars):

											June 30, 2021	December 31, 2020

									Canada	$	1,886 $					2,385
									United States		28,518					32,767
										$	30,404 $					35,152

									(d) The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region (Dollar amounts in thousands of US
dollars):
											June 30, 2021	December 31, 2020

									Germany	$	168 $						226
										$	168 $						226

									(e) Valuation and qualifying accounts (Dollar amounts in thousands of US dollars):
										Balance at
										beginning of	Charged to costs	Write-offs	Balance at end of
									Allowance for doubtful accounts		period				and expenses			during period		period

									Six Months Ended June 30, 2021	$	222 $					- $	20 $		202
									Twelve months ended December 31, 2020	$	131 $					91 $	- $		222

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Table of Contents 14. Stockholders' Equity: The following table summarizes stockholders' equity transactions for the three-month period ended (Dollar amounts in thousands of U.S. dollars):
									Accumulated
					Additional						other		Total
	Common stock				paid in		Retained	comprehensive stockholders'
	Number			Amount		capital		earnings		income (loss)	equity

Balances, March 31, 2021	10,624,415 $		21,511 $		1,778 $		82,255 $				1,870 $	107,414

Exercise of stock options	45,688		1,946		(699)			-				-	1,247
Shares deducted from exercise of stock optionsfor payment of withholding taxes and exerciseconsideration
	(4,589)			-	(80)			-				-	(80)
Stock-based compensation		-		-	1,209			-				-	1,209
Net income		-		-		-	1,807					-	1,807
Other comprehensive income (loss)		-		-		-		-				(773)	(773)
Balances, June 30, 2021	10,665,514 $		23,457 $		2,208 $		84,062 $				1,097 $	110,824

									Accumulated
					Additional						other		Total
	Common stock				paid in		Retained	comprehensive stockholders'
	Number			Amount		capital		earnings		income (loss)	equity

Balances, December 31, 2020	10,612,414 $		20,798 $		1,458 $		80,106 $				2,336 $	104,698

Exercise of stock options	73,875		2,659		(1,183)			-				-	1,476
Shares deducted from exercise of stockoptions for payment of withholding taxesand exercise consideration
	(20,775)			-	(298)			-				-	(298)
Stock-based compensation		-		-	2,231			-				-	2,231
Net income		-		-		-	3,956					-	3,956
Other comprehensive income (loss)		-		-		-		-			(1,239)	(1,239)
Balances, June 30, 2021	10,665,514 $		23,457 $		2,208 $		84,062 $				1,097 $	110,824
\ 2021 Stock Buyback Program
On February 9, 2021, the Company announced that its Board approved a stock buyback program to repurchase up to $40 million of its common stock in the open
market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 10, 2021 and willterminate on or before February 9, 2022. For the three and six months ended June 30, 2021, the Company did not repurchase shares under this program.
2020 Stock Buyback Program
													On February 12, 2020, the Company announced that its Board had approved a stock buyback program to repurchase up to $40 million of its common stock in the
open market. The $40 million buyback program commenced on February 13, 2020 and terminated on February 12, 2021. For the six months ended June 30, 2021, theCompany did not repurchase shares under this program. For the three months ended June 30, 2020, the Company repurchased 3,500 shares under this program for totalconsideration of $0.2 million. For the six months ended June 30, 2020, the Company repurchased 70,238 shares under this program for total consideration of $3.3 million. 2019 Stock Buyback Program
													On February 13, 2019, the Company announced that its Board had approved a stock buyback program to repurchase up to $40 million of its common stock in the
open market. The $40 million buyback program commenced on February 14, 2019 and terminated on February 13, 2020. During the six months ended June 30, 2020, theCompany did not repurchase shares under this program. 15. Share-based Payments: Stock options

													The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use
of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent theweighted average of the applicable assumption used to value stock options at their grant date. The Company calculates expected volatility based on historical volatilityof the Company's common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based onhistorical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed invaluing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expecteddividend yield percentage by dividing the expected annual dividend by the market price of Tucows Inc. common shares at the date of grant.
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Table of Contents
	Details of stock option transactions for the three months ended June 30, 2021 and June 30, 2020 are as follows (Dollar amounts in thousands of U.S. dollars,
except per share amounts):
		Three Months Ended June 30, 2021 Three Months Ended June 30, 2020
					Weighted				Weighted
					average				average
		Number of		exercise price			Number of	exercise price
			shares		per share		shares		per share

Outstanding, beginning of period			808,469 $			55.55	730,037 $			50.85
Granted			239,050			79.43	190,025			59.53
Exercised			(45,538)			43.24					(16,922)	9.79
Forfeited			(9,498)			61.23		(4,826)		59.15
Expired			(1,386)			61.93		(1,036)		58.39
Outstanding, end of period			991,097			61.81	897,278			53.41
Options exercisable, end of period			438,437 $			53.16	390,868 $			46.20
Details of stock option transactions for the six months ended June 30, 2021 and June 30, 2020 are as follows (Dollar amounts in thousands of U.S. dollars, except pershare amounts):
			Six Months Ended June 30, 2021				Six Months Ended June 30, 2020
					Weighted				Weighted
					average				average
		Number of		exercise price			Number of	exercise price
			shares		per share		shares		per share

Outstanding, beginning of period			845,020 $			55.31	754,497 $			49.94
Granted			239,050			79.43	195,525			59.19
Exercised			(73,875)			44.82					(41,935)	16.23
Forfeited			(17,562)			61.00		(8,315)		60.23
Expired			(1,536)			61.93		(2,494)		59.86
Outstanding, end of period			991,097			61.81	897,278			53.41
Options exercisable, end of period			438,437 $			53.16	390,868 $			46.20
As of June 30, 2021, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows (Dollar amounts inthousands of U.S. dollars, except per share amounts):
													Options outstanding				Options exercisable
													Weighted	Weighted	Weighted	Weighted
													average	average	average					average
													exercise	remaining	Aggregate				exercise	remaining		Aggregate
												Number	price per	contractual	intrinsic		Number		price per	contractual		intrinsic
Exercise price													outstanding	share		life (years)	value		exercisable		share		life (years)		value

$15.93 - $19.95															29,239 $	18.98			0.7 $	1,793	29,239 $		18.98		0.7 $		1,793
$21.10 - $27.53															32,500	23.33			1.0	1,852	32,500		23.33		1.0		1,852
$35.25 - $37.35															4,375	37.35			0.5	188	4,375		37.35		0.5		188
$46.90 - $48.00															13,000	47.36			4.6	428	7,000		47.29		3.6		231
$51.82 - $59.98																	274,858	55.56			3.0	6,806	204,102		55.56		2.9		5,054
$60.01 - $68.41																	378,525	62.07			5.1	6,908	151,221		62.39		4.8		2,712
$72.50 - $79.87																	258,600	78.89			6.8	369	10,000		72.50		6.4		78
																	991,097 $	61.81			4.7 $	18,344		438,437 $		53.16		3.3 $		11,908

	Total unrecognized compensation cost relating to unvested stock options at June 30, 2021, prior to the consideration of expected forfeitures, is approximately
$11.2 million and is expected to be recognized over a weighted average period of 2.2 years.
	The Company recorded stock-based compensation of $1.2 million for the three months ended June 30, 2021, and $0.8 million for the three months ended June 30,
2020, respectively.
	The Company recorded stock-based compensation of $2.2 million for the six months ended June 30, 2021, and $1.6 million six months ended June 30, 2020,
respectively.
	The Company has not capitalized any stock-based compensation expense as part of the cost of an asset.

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Table of Contents 16. Fair Value Measurement:
	For financial assets and liabilities recorded in our financial statements at fair value we utilize a valuation hierarchy for disclosure of the inputs to valuation used to
measure fair value. This hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets orliabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly orindirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s ownassumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest levelinput that is significant to the fair value measurement.
	Equity investments without readily determinable fair value include ownership rights that do not provide the Company with control or significant influence. Such
equity investments are recorded at cost, less any impairment, and adjusted for subsequent observable price changes as of the date that an observable transaction takesplace. Subsequent adjustments are recorded in other income (expense), net.
	The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as at June 30, 2021
(Dollar amounts in thousands of U.S. dollars):

			June 30, 2021
						Assets
				Fair Value Measurement Using		(Liabilities)
							Level 1		Level 2			Level 3	at Fair value

Derivative instrument asset, net		$		- $	1,677 $			- $	1,677

Total assets, net		$		- $	1,677 $			- $	1,677
The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as at December 31, 2020(Dollar amounts in thousands of U.S. dollars):
			December 31, 2020
						Assets
				Fair Value Measurement Using		(Liabilities)
							Level 1		Level 2			Level 3	at Fair value

Derivative instrument asset, net		$		- $	3,647 $			- $	3,647

Total assets, net		$		- $	3,647 $			- $	3,647
17. Other income:
	On August 1, 2020, the Company entered into an Asset Purchase Agreement (the “DISH Purchase Agreement”), by and between the Company and DISH
Wireless L.L.C.(“DISH”). Under the DISH Purchase Agreement and in accordance with the terms and conditions set forth therein, the Company sold to DISH its mobilecustomer accounts that are marketed and sold under the Ting brand (other than certain customer accounts associated with one network operator) (“TransferredAssets”). For a period of 10 years following the execution of the DISH Purchase Agreement, DISH will pay a monthly fee to the Company generally equal to an amountof net revenue received by DISH in connection with the transferred customer accounts minus certain fees and expenses, as further set forth in the DISH PurchaseAgreement. The Company earned $4.8 million and $10.2 million under the DISH Purchase Agreement during the three and six months ended June 30, 2021, respectively.The Company earned did not earn any amount under the DISH Purchase Agreement during both the three and six months ended June 30, 2020.

							Three Months Ended June 30,			Six Months Ended June 30,
				2021		2020					2021	2020
Income earned on sale of Transferred Assets		$		4,808 $	- $			10,203 $	-
Gain on sale of Ting Customer Assets		$		4,808 $	- $			10,203 $	-


18. Contingencies:
	From time to time, the Company has legal claims and lawsuits in connection with its ordinary business operations. The Company vigorously defends such
claims. While the final outcome with respect to any actions or claims outstanding or pending as of June 30, 2021 cannot be predicted with certainty, management doesnot believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company's financial position.


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Table of Contents ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
	This Quarterly Report on Form 10-Q contains, in addition to historical information, forward-looking statements by us with regard to our expectations as to
financial results and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995. Words such as “may,” “should,” “anticipate,” “believe,” “plan,” “estimate,” “expect” and “intend,” and other similarexpressions are intended to identify forward-looking statements. The forward-looking statements contained in this report include statements regarding, among otherthings: the competition we expect to encounter as our business develops and competes in a broader range of Internet services; the Company's foreign currencyrequirements, specifically for the Canadian dollar; Mobile Services Platform, and fixed Internet access subscriber growth and retention rates; our belief regarding theunderlying platform for our domain services, our expectation regarding the trend of sales of domain names and advertising; our expectations regarding portfoliorevenue, our belief that, by increasing the number of services we offer, we will be able to generate higher revenues; our expectation regarding litigation; the potentialimpact of current and pending claims on our business; our valuations of certain deferred tax assets; our expectation to collect our outstanding receivables, net of ourallowance for doubtful accounts; our expectation regarding fluctuations in certain expense and cost categories; our expectations regarding our unrecognized tax; ourexpectations regarding cash from operations to fund our business; the impact of cancellations of or amendments to market development fund programs under which wereceive funds, our expectation regarding our ability to manage realized gains/losses from foreign currency contracts; the impact of the COVID-19 outbreak on ourbusiness, operations and financial performance; and general business conditions and economic uncertainty. These statements are based on management’s currentexpectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-lookingstatements. Many factors affect our ability to achieve our objectives and to successfully develop and commercialize our services including:

	•	Our ability to continue to generate sufficient working capital to meet our operating requirements;

	•	Our ability to service our debt commitments;

	•	Our ability to maintain a good working relationship with our vendors and customers;

	•	The ability of vendors to continue to supply our needs;

	•	Actions by our competitors;

	•	Our ability to attract and retain qualified personnel in our business;

	•	Our ability to effectively manage our business;

	•	The effects of any material impairment of our goodwill or other indefinite-lived intangible assets;

	•	Our ability to obtain and maintain approvals from regulatory authorities on regulatory issues;

	•	Our ability to invest in the build-out of fiber networks into selected towns and cities to provide Internet access services to residential and commercialcustomers while maintaining the development and sales of our established services;

	•	Adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, including with respect to the impact of the TaxCuts and Jobs Act of 2017;

	•	The application of judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given the ultimate taxdetermination is uncertain;

	•	Our ability to effectively integrate acquisitions;

	•	Our ability to monitor, assess and respond to the rapidly changing impacts of the COVID-19 pandemic. Our current assessment of expected impacts has beenincluded below as part of the Opportunities, Challenges & Risks section.

	•	Our ability to collect anticipated payments from DISH in connection with the 10-year payment stream that is a function of the margin generated by thetransferred subscribers over a 10-year period pursuant to the terms of the DISH Purchase Agreement;

	•	Pending or new litigation; and

	•	Factors set forth under the caption “Item 1A Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SECon March 3, 2021 (the “2020 Annual Report”).

	As previously disclosed the under the caption “Item 1A Risk Factors” in our 2020 Annual Report, data protection regulations may impose legal obligations on
us that we cannot meet or that conflict with our ICANN contractual requirements.
		22

Table of Contents
	This list of factors that may affect our future performance and financial and competitive position and the accuracy of forward-looking statements is illustrative,
but it is by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements included in this document are based on information available to us as of the date of this document, and we assume no obligation to update thesecautionary statements or any forward-looking statements, except as required by law. These statements are not guarantees of future performance.
	We qualify all the forward-looking statements contained in this Quarterly Report on Form 10-Q by the foregoing cautionary statements.

OVERVIEW
	Our mission is to provide simple useful services that help people unlock the power of the Internet.

	We accomplish this by reducing the complexity of our customers’ experience as they access the Internet (at home or on the go) and while using Internet
services such as domain name registration, email and other Internet services. During the first quarter of 2021, the Company completed a reorganization of its reportingstructure into three operating and reportable segments: Fiber Internet Services, Mobile Services and Domain Services. Previously, we disclosed two operating andreportable segments: Network Access Services and Domain Services. The change to our reportable operating segments was the result of a shift in our business andmanagement structures that was initiated in 2020 and completed during the first quarter of 2021. The operations supporting what was previously known as our NetworkAccess Services segment have become increasingly distinct between our mobile services (which includes both retail mobile MNVO based services and wholesale MSEservices) and our fiber Internet services which were also included in our Network Access Services segment. We are now both organized and managed, and also reportour financial results as three segments: Fiber Internet Services, Mobile Services and Domain Services. The three segments are differentiated primarily by their services,the markets they serve and the regulatory environments in which they operate.
	Our management regularly reviews our operating results on a consolidated basis, principally to make decisions about how we utilize our resources and to
measure our consolidated operating performance. To assist us in forecasting growth and to help us monitor the effectiveness of our operational strategies, ourmanagement regularly reviews revenues, operating results and performance for each of our service offerings in order to gain more depth and understanding of the keybusiness metrics driving our business. Commencing in the first quarter of 2021, our Chief Executive Officer (CEO), who is also our chief operating decisionmaker, reviews the operating results of Mobile Services and Fiber Internet Services as two distinct segments in order to make key operating decisions as well as evaluatesegment performance. Accordingly, effective January 1, 2021 we now report Fiber Internet Services, Mobile Services and Domain Services revenue separately.Additionally, we have adjusted segment reporting to include adjusted EBITDA as a key measure of segment performance in addition to our existing key measure ofsegment performance, gross profit.
	For the three months ended June 30, 2021 and June 30, 2020, we reported revenue of $75.1 million and $82.1 million, respectively. For the six months ended June 30, 2021 and June 30, 2020, we reported revenue of $146.0 million and $166.1 million, respectively. Fiber Internet Services

	Fiber Internet Services includes the provision of fixed high-speed Internet access services and other revenues, including billing solutions to small ISPs. The Company also derives revenue from the sale of fixed high-speed Internet access, Ting Internet, in select towns throughout the United States, with further
expansion underway to both new and existing Ting towns. Our primary sales channel of Ting Internet is through the Ting website. The primary focus of Ting Internet isto provide reliable Gigabit Internet services to consumer and business customers. Revenues from Ting Internet are all generated in the U.S. and are provided on amonthly basis. Ting Internet services have no fixed contract terms.
	Mobile Services

	Mobile Services includes the provision of Mobile Services Enabler ("MSE") platform and professional services, as well as the sale of retail mobile phone and
retail telephone services for a small subset of retail customers.
	On August 1, 2020, the Company and its wholly owned Subsidiary Ting, Inc. entered into an Asset Purchase Agreement (the "DISH Purchase
Agreement”) with DISH pursuant to which Ting sold substantially all of its legacy retail mobile customer relationships, and mobile handset and SIM inventory to DISHand granted DISH the right to use and an option to purchase the Ting brand. The transferred assets under the DISH Purchase Agreement did not include thetechnology platforms and related intellectual property and infrastructure necessary to enable or support the mobile customers. The Company retained the assets used toprovide MSE platform and other professional services to DISH, as discussed below. Revenues from our retail mobile services, MSE platform and professionalservices are all generated in the U.S. and are provided on a monthly basis. Our MSE customer agreements have set contract lengths with the underlying Mobile VirtualNetwork Operator ("MVNO"). As part of the DISH Purchase Agreement, as a form of consideration for the sale of the customer relationships, the Company receives apayout on the margin associated with the legacy customer base sold to DISH. This has been classified as Other Income and not considered revenue in the currentperiod.
	Domain Services

	Domain Services includes wholesale and retail domain name registration services, as well as value added services derived through our OpenSRS, eNom, Ascio,
EPAG and Hover brands. We earn revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domain nameregistrations. In addition, we earn revenues from the sale of retail domain name registration and email services to individuals and small businesses. Domain Servicesrevenues are attributed to the country in which the contract originates, which is primarily in Canada and the U.S for OpenSRS and eNom brands. Ascio domain servicescontracts and EPAG agreements primarily originate in Europe.
	Our primary distribution channel is a global network of approximately 36,000 resellers that operate in over 150 countries and who typically provide their
customers, the end-users of Internet-based services, with solutions for establishing and maintaining an online presence. Our primary focus is serving the needs of thisnetwork of resellers by providing the broadest portfolio of generic top-level domain (“gTLD”) and the country code top-level domain options and related services, awhite-label platform that facilitates the provisioning and management of domain names, a powerful Application Program Interface, easy-to-use interfaces,comprehensive management and reporting tools, and proactive and attentive customer service. Our services are integral to the solutions that our resellers deliver to theircustomers. We provide “second tier” support to our resellers by email, chat and phone in the event resellers experience issues or problems with our services. Inaddition, our Network Operating Center proactively monitors all services and network infrastructure to address deficiencies before customer services are impacted.
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	We believe that the underlying platforms for our services are among the most mature, reliable and functional reseller-oriented provisioning and management
platforms in our industry, and we continue to refine, evolve and improve these services for both resellers and end-users. Our business model is characterized primarilyby non-refundable, up-front payments, which lead to recurring revenue and positive operating cash flow.
	Wholesale, primarily branded as OpenSRS, eNom, EPAG and Ascio, derives revenue from its domain service and from providing value-added services. The
OpenSRS, eNom, EPAG and Ascio domain services manage 25.6 million domain names under the Tucows, eNom, EPAG and Ascio ICANN registrar accreditations andfor other registrars under their own accreditations, which has increased by 1.0 million domain names since June 30, 2020. The increase is driven by increasedregistrations experienced by our brands during COVID-19, as more businesses established an online presence, offset by the continued erosion of registrations related tonon-core customers from our eNom brand.
	Value-Added Services include hosted email which provides email delivery and webmail access to millions of mailboxes, Internet security services, WHOIS
privacy, publishing tools and other value-added services. All of these services are made available to end-users through a network of 36,000 web hosts, ISPs, and otherresellers around the world. In addition, we also derive revenue by monetizing domain names which are near the end of their lifecycle through advertising or auction sale.
	Retail, primarily the Hover and eNom portfolio of websites, including eNom, eNom Central and Bulkregister, derive revenues from the sale of domain name
registration, email services to individuals and small businesses. Retail also includes our Personal Names Service – based on over 36,000 surname domains – that allowsroughly two-thirds of Americans to purchase a surname-based email address. The retail segment now includes the sale of the rights to its portfolio of surname domainsused in connection with our Realnames email service, however the Company expects surname portfolio revenue to materially decline through Fiscal 2021 andthereafter. Retail also includes our Exact Hosting Service, that provides Linux hosting services for websites of individuals and small businesses. KEY BUSINESS METRICS AND NON-GAAP MEASURES
	We regularly review a number of business metrics, including the following key metrics and non-GAAP measures, to assist us in evaluating our business,
measure the performance of our business model, identify trends impacting our business, determine resource allocations, formulate financial projections and makestrategic business decisions. The following tables set forth the key business metrics which we believe are the primary indicators of our performance for the periodspresented: Adjusted EBITDA
	Tucows reports all financial information in accordance with United States generally accepted accounting principles (“GAAP”). Along with this information, to
assist financial statement users in an assessment of our historical performance, we typically disclose and discuss a non-GAAP financial measure, adjusted EBITDA, oninvestor conference calls and related events that exclude certain non-cash and other charges as we believe that the non-GAAP information enhances investors’ overallunderstanding of our financial performance. Please see discussion of adjusted EBITDA in the Results of Operations section below. Ting Internet
		June 30,
				2021			2020
		(in '000's)
Ting Internet accounts under management		20	13
Ting Internet serviceable addresses (1)		71	48

(1) Defined as premises to which Ting infrastructure, or Ting's network partner Westminster, have the capability to provide a customer connection in a service area.
Domain Services
		For the Three Months Ended June 30,(1)
				2021			2020
		(in 000's)
Total new, renewed and transferred-in domain name registrations provisioned		4,409	4,747
Domains under management

(1) For a discussion of these period-to-period changes in the domains provisioned and domains under management and how they impacted our financial results
	see the Net Revenues discussion below.
Domain Services
				For the Six Months Ended June 30,(1)
				2021			2020
		(in 000's)
Total new, renewed and transferred-in domain name registrations provisioned		9,227	9,503
Domains under management

(1) For a discussion of these period-to-period changes in the domains provisioned and domains under management and how they impacted our financial results
	see the Net Revenues discussion below.
Domain Services
		June 30,
				2021				2020
		(in 000's)
Registered using Registrar Accreditation belonging to the Tucows Group		19,471			19,385
Registered using Registrar Accreditation belonging to Resellers		6,144			5,207
Total domain names under management		25,615			24,592

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Table of Contents OPPORTUNITIES, CHALLENGES AND RISKS
	Our revenue is primarily realized in U.S. dollars and a major portion of our operating expenses are paid in Canadian dollars. Fluctuations in the exchange rate
between the U.S. dollar and the Canadian dollar may have a material effect on our business, financial condition and results from operations. In particular, we may beadversely affected by a significant weakening of the U.S. dollar against the Canadian dollar on a quarterly and an annual basis. Our policy with respect to foreigncurrency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some or all of the impact of foreigncurrency exchange movements by entering into foreign exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We maynot always enter into such forward contracts and such contracts may not always be available and economical for us. Additionally, the forward rates established by thecontracts may be less advantageous than the market rate upon settlement.
	Fiber Internet Services As an ISP, we have invested and expect to continue to invest in new fiber to the home (“FTTH”) deployments in select markets in the United States. The
investments are a reflection of our ongoing efforts to build FTTH network via public-private partnerships in communities we identify as having strong, unmet demandfor FTTH services. Given the significant upfront build and operational investments for these FTTH deployments, there is risk that future technological and regulatorychanges as well as competitive responses from incumbent local providers, may result in us not fully recovering these investments.
	The communications industry continues to compete on the basis of network reach and performance, types of services and devices offered, and price. Mobile Services The prior year sale of substantially all of the Company’s mobile customer base and pivot from MVNO to MSE will be a strategic shift for our Mobile Services
segment. At the start, DISH will be our sole customer and will represent 100% of our MSE platform revenues until such time that we are able to scale our services toother customers interested in our enablement services. With all our MSE platform and professional services revenues concentrated with one customer, we are exposedto significant risk if we are unable to maintain this customer relationship or establish new relationships in the future. Additionally, our revenues as an MSE are directlytied to the subscriber volumes of DISH's MVNO or MNO networks, so our profitability is contingent on the ability of DISH to continue to add subscribers onto ourplatform.
	Additionally, as described above, the Company will be entitled to a 10-year payment stream that is a function of the margin generated by the transferred
subscribers over the 10-year period. This consideration structure may not prove to be successful or profitable in the long-term to us if the existing subscriber basechurns at an above average rate upon acquisition by DISH. Additionally, given DISH controls the revenues and costs incurred associated with the acquiredsubscribers, there could arise a situation where profitability for the subscriber base is diminished either by lower price points or cost inflation.
	As part of the transactions contemplated by the DISH Purchase agreement, the Company has retained a small number of customer accounts associated with
one MNO agreement that was not reassigned to DISH at time of sale. We continue to be subject to the minimum revenue commitments previously agreed to withthis excluded MNO agreement. The Company will be able to continue adding customers under the excluded MNO network working with DISH in order to meet thecommitment. However, with no direct ability to change customer pricing or renegotiate contract costs or terms, the Company may be unable to meet the minimumcommitments with this MNO partner and could incur significant and recurring penalties until such a time that the contract is complete. These penalties would negativelyimpact our operational performance and financial results if enforced by the MNO.
	Domain Services The increased competition in the market for Internet services in recent years, which we expect will continue to intensify in the short and long term, poses a
material risk for us. As new registrars are introduced, existing competitors expand service offerings and competitors offer price discounts to gain market share, we facepricing pressure, which can adversely impact our revenues and profitability. To address these risks, we have focused on leveraging the scalability of our infrastructureand our ability to provide proactive and attentive customer service to aggressively compete to attract new customers and to maintain existing customers.
	Substantially all of our Domain Services revenue is derived from domain name registrations and related value-added services from wholesale and retail
customers using our provisioning and management platforms. The market for wholesale registrar services is both price sensitive and competitive and is evolving withthe introduction of new gTLDs, particularly for large volume customers, such as large web hosting companies and owners of large portfolios of domain names. We havea relatively limited ability to increase the pricing of domain name registrations without negatively impacting our ability to maintain or grow our customer base. Growth inour Domain Services revenue is dependent upon our ability to continue to attract and retain customers by maintaining consistent domain name registration and value-added service renewal rates and to grow our customer relationships through refining, evolving and improving our provisioning platforms and customer service for bothresellers and end-users. In addition, we also generate revenue through pay-per-click advertising and through the OpenSRS Domain Expiry Stream. The revenueassociated with names sales and advertising has recently experienced flat to declining trends due to the uncertainty around the implementation of ICANN’s New gTLDProgram, lower traffic and advertising yields in the marketplace, which we expect to continue.
	From time-to-time certain of our vendors provide us with market development funds to expand or maintain the market position for their services. Any decision
by these vendors to cancel or amend these programs for any reason may result in payments in future periods not being commensurate with what we have achievedduring past periods.

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Table of Contents Critical Accounting Policies

	The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgements that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. There have been no material changes to thecritical accounting policies and estimates as previously disclosed in Part II, Item 7 of our 2020 Annual Report. For further information on our critical accounting policiesand estimates, see Note 3 – Recent Accounting Pronouncements to the consolidated financial statements of the Company in Part I, Item 1 in this Quarterly Report onForm 10-Q.

Current COVID-19 Response
	Our Employees

	Tucows is a global business and has long encouraged a culture of remote work even prior to this global pandemic. Since the onset of this pandemic,
all employees who could conceivably work from home were and continue to be encouraged to do so. Tucows continues to actively and strongly encourage itsworkforce to heed travel and all other emergency advisories, including social distancing and where appropriate, self-isolation. We expect our work from home policy toremain in effect until emergency state and governmental declarations where we have physical offices have ended and we believe the risk of community spread of thedisease has subsided. Given our experience with remote work prior to COVID-19, we have not and do not expect to have productivity issues while the overwhelmingmajority of our office-based workforce is dispersed. For the small group of employees who are unable work from home during this time, including our order fulfillmentand Fiber installation teams, many of whom work in the field, they are encouraged to practice social distancing and to continue to follow hygiene best practices andsafety protocols as outlined by the Centers for Disease Control and Prevention. In the prior year, the Ting Internet team established an installation solution for ouremployees and customers that minimizes risks associated with person-to-person contact and they continue to effectively deploy this installation solution currently.
	Our Customers

	We recognize the important role we play within the Internet space and are committed to continue providing quality service during the COVID-19 outbreak.
Across our three segments, Domain Name Services and our Mobile Services segments do not rely on in-person interaction or the supply chain in the same way physicalproducts and services do. We continue to provide uninterrupted services for all Domains and Mobile related services. Our Fiber Internet business does not havebandwidth caps or other such limitations. Likewise, our networks are built with the capacity to accommodate future needs. To help our customers remain connected athome during this time, we upgraded all our lower-tier fiber customers to symmetrical gigabit access at no charge. Any additional traffic from our customers working fromhome has not had and is not expected to have any negative impact on connectivity. As discussed above, our modified safe-install solution was implemented in earlyMay 2020. With this service limitation, new customer acquisition will remain slower than pre-pandemic levels of growth and installation. Even with an install solutionthat minimizes risks, customers may be unwilling to have service personnel visit their homes or offices.
	Our Community

	Tucows believes the Internet is essential infrastructure and an immensely powerful tool, especially in times of crises where coordination is essential. From an
early point in the current global crisis, it was clear to us that we were going to need to do something new and different in how we responded to COVID-19 related domainregistrations. We developed a strategy of compliance activities that encompassed three major components: (i) identification, (ii) assessment for harm, and (iii)stakeholder engagement. In order to provide Internet access and assistance to residents of cities and towns that are part of the Ting Fiber network, we have set up free,fiber-fed, drive-up Wi-Fi hotspots. These hotspots enable those with no home Internet access, or insufficient access, to access critical services like online learning andtelehealth services, work remotely, check in on and access vital health, government and other services and generally access information. These hotspots will remain inoperation as long as they are needed and as long as it is safe and prudent to do so. We have not experienced any material resource constraints nor do we foreseerequiring any material expenditures to continue to implement our business continuity plans described above. Current and expected COVID-19 Impacts
	Financial & Operational Impacts

	Further to the below discussion within this Quarterly Report around the financial condition and results of operations for the current period financial results, the
current impact from COVID-19 has been limited so far in 2021. Over the past year, we've monitored the situation and its impacts on our businesses but have ultimatelyseen trends stabilize, with some hints at recovery in U.S. markets due to large-scale vaccination programs. Management continues to assess the impact regularly butexpects limited impact through the remainder of 2021, should the COVID-19 pandemic persist. On a segment basis, our current assessment is as follows:
	Fiber Internet Services:

	As discussed above, the Ting Internet team established a smart-install solution at the start of the pandemic. This smart-install solution is faster and more
efficient than our existing process, all while protecting the health and safety of our employees and customers alike. Although new customer installations initially slowedat the start of the pandemic, we are now seeing returned growth in both subscribers under management as well as serviceable addresses relative to the prior quarter.
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	Mobile Services:

	The Company now only retains a small subset of customers to which it continues to provide retail mobile services. COVID-19 has impacted the demand for our
Mobile Services as customer usage patterns have changed, which has had a corresponding negative impact on our revenues over the past year. However, we do notexpect the impact to significantly worsen over the coming months or year, as we have seen usage slowly begin to normalize during the current period due to seasonallywarmer weather and continued vaccine roll-out across the U.S. Our new MSE platform and professional services businesses are completely online and do not rely onphysical storefronts to attract or service customers’ needs. We are fully prepared to continue providing uninterrupted Mobile related enablement services to our MVNOcustomers. We have not and do not expect a negative COVID-19 impact on our new MSE platform and professional services revenue, nor do we expect any impact tosubstantially worsen over the coming months.
	Domain Services:

	Domain Services are foundational to the functioning of the Internet. Services like individual and wholesale domain names, email and hosting do not rely on in-
person interaction or the supply chain in the same way physical products and services do. We have not experienced any negative COVID-19 related impacts, eitherfinancially or operationally for Domains related services, across our OpenSRS, eNom, Ascio, EPAG & Hover brands. As more businesses faced the reality of prolongedphysical shutdown and moved to establish an online presence, we have seen growth in this segment over the course of the pandemic, where total domains undermanagement increased by 1.7 million since March 31, 2020. This growth rate in domains under management was driven by the pandemic, and may not be sustained in thefuture as domain registrations plateau. Our results of operations for the current period financial results are in line with management’s expectation for the period givenproduct, customer mix and current brand trajectories. We will continue to monitor the impact but do not foresee any negative financial or operational impacts associatedwith this segment.
	Liquidity & Financial Resource Impacts

	For a complete assessment of our liquidity and covenant positions please reference the relevant discussions within this Quarterly Report. We have experienced
no significant change to our liquidity position or credit risk as a result of the financial and operational impacts related to COVID-19, as discussed above. Our cost oraccess to funding sources has not changed and is not reasonably likely to change in the near future as a result of the pandemic. Our sources and uses of cash have notbeen materially impacted and there is no known material uncertainty about our ongoing ability meet covenants or repayment terms of our credit agreements at this time.
	Internal Controls over Financial Reporting

	Tucows has long encouraged a culture of remote work even prior to COVID-19. Our financial reporting systems and our internal controls over financial
reporting and disclosure controls and procedures are already adapted for a remote work environment. There have been no changes during the current period that, as aresult of COVID-19, would affect our ability to maintain these systems and controls.
	COVID-19 Related Assistance & Support

	Currently, Tucows has not received any form of financial or resource related assistance from any government or local authority. There do exist programs in the
regions in which we operate that are designed to support corporations like Tucows during this time, primarily in the form employee wage subsidization. Tucows willcontinue to review the applicability of these programs but does not expect to seek any assistance.
	Accounting Policy Impacts

	After monitoring the COVID-19 pandemic over the past year and assessing the impacts on our business as discussed above, Tucows does not anticipate a
material impairment with respect to goodwill, intangible assets, long-lived assets, or right of use assets. We will continue to monitor the impacts closely as the situationcontinues to evolve and will approach the situation with cautious optimism about economic recovery resulting from widespread vaccination programs and will bemindful of any emerging risks as they arise. We do not foresee any changes in accounting judgements in relation to COVID-19 that will have a material impact on ourfinancial statements.
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Table of Contents RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AS COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30,2020 NET REVENUES
	Fiber Internet Services

	Fiber Internet Services derive revenues from providing Ting Internet to individuals and small businesses in select cities. In addition, we provide billing,
provisioning and customer care software solutions to ISPs through our Platypus billing software. Ting Internet access contracts provide customers Internet access attheir home or business through the installation and use of our fiber optic network. Ting Internet contracts are generally prepaid and grant customers with unlimitedbandwidth based on a fixed price per month basis.
	Ting Internet services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following
each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Internet access customers is computed based on the customer’s activation date. Sinceconsideration is collected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access withineach reporting period. In addition, revenues associated with the sale of Internet hardware to subscribers are recognized when title and risk of loss is transferred to thesubscriber and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.
	In those cases, where payment is not received at the time of sale, revenue is not recognized until contract inception unless the collection of the related
accounts receivable is reasonably assured. The Company records costs that reflect expected refunds, rebates and credit card charge-backs as a reduction of revenues atthe time of the sale based on historical experiences and current expectations.
	Mobile Services

	Retail Mobile Services
Ting Mobile wireless usage contracts grant customers access to standard talk, text and data mobile services. Ting Mobile contracts are billed based on thecustomer's selected rate plan, which can either be usage based or an unlimited plan. All rate plan options are charged to customers on a postpaid, monthly basis at theend of their billing cycle. As discussed previously, in the prior year the Company sold substantially all of its retail mobile customer relationships, and mobile handsetand SIM inventory to DISH and granted the right to use and option to purchase the Ting brand. The Company only retains a small subset of customers to which itcontinues to provide retail mobile services. All future revenues associated with Retail Mobile Services stream will only be for this subset of customers retained by Ting,Inc.
Ting Mobile services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following eachcustomer's monthly billing cycle. The Company's billing cycle for all Ting Mobile customers is computed based on the customer's activation date. In order to recognizerevenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed from the end of each billing cycle to the end of eachreporting period. In addition, revenues associated with the sale of wireless devices and accessories are recognized when title and risk of loss is transferred to thecustomer and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.
	As a form of consideration for the sale of the customer relationships, the Company receives a payout on the margin associated with the legacy customer base
sold to DISH, over a period of 10 years. This has been classified as Other Income and not considered revenue in the current period.
	Mobile Platform Services
Tucows' MSE platform provides network access, provisioning and billing services for MVNOs. These platform fees are billed to our MVNO customers monthly,on a postpaid basis. The fees are based on the volume of their subscribers utilizing the platform during a given month. The Company recognizes revenue over this newrevenue stream as the Company satisfies its obligations to provide MSE services on a monthly basis. For any bundled professional services where collection iscollected before the service period as part of MSE Platform Revenues, the professional services revenue is initially deferred and recognized only as the Companyperforms its obligation to provide professional services.
	Other Professional Services
This revenue stream includes any other professional services, including transitional services, earned in connection with Tucows' new MSE business. These arebilled to our customers monthly at set and established rates for services provided in period. The Company recognizes revenue over this new revenue stream as theCompany satisfies its obligations to provide professional services.
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	Domain Services

	Wholesale - Domain Services

	Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive
right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new,renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period.Though fees are collected upfront, revenue from domain registrations are recognized rateably over the registration period as domain registration contracts contain a‘right to access’ license of IP, which is a distinct performance obligation measured over time. The registration period begins once the Company has confirmed that therequested domain name has been appropriately recorded in the registry under contractual performance standards.
	Historically, our wholesale domain service has constituted the largest portion of our business and encompasses all of our services as an accredited registrar
related to the registration, renewal, transfer and management of domain names. In addition, this service fuels other revenue categories as it often is the initial service forwhich a reseller will engage us, enabling us to follow on with other services and allowing us to add to our portfolio by purchasing names registered through us upontheir expiration. Domain services will continue to be the largest portion of our business and will further fuel our ability to sell add-on services.
	The Company is an ICANN accredited registrar. Thus, the Company is the primary obligor with our reseller and retail registrant customers and is responsible for
the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retailregistrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to thosecustomers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.
	Wholesale – Value-Added Services

	We derive revenue from domain related value-added services like digital certifications, WHOIS privacy and hosted email and by providing our resellers and
retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services areconsidered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain relatedvalue-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with thesatisfaction of the performance obligations.
	We also derive revenue from other value-added services, which primarily consists of proceeds from the OpenSRS, eNom and Ascio domain expiry streams. Retail

	We derive revenues mainly from Hover and eNom’s retail properties through the sale of retail domain name registration and email services to individuals and
small businesses. The Company also provides Linux hosting services for websites through its Exact Hosting brand. The retail segment now includes the sale of therights to its portfolio of surname domains used in connection with our Realnames email service, however the Company expects surname portfolio revenue to materiallydecline through Fiscal 2021 and thereafter.

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Table of Contents
	The following table presents our net revenues, by revenue source (Dollar amounts in thousands of U.S. dollars):

(Dollar amounts in thousands of U.S. dollars)		For the Three Months Ended June 30,	For the Six Months Ended June 30,
			2021			2020		2021				2020

Fiber Internet Services:
Fiber Internet Services		$		5,825 $	4,414 $	11,196 $	8,722

Mobile Services:
Retail mobile services				2,548	17,567	4,563	37,715
Mobile platform services				2,457	-			2,806		-
Other professional services				2,001	-			3,917		-
	Total Mobile			7,006	17,567	11,286	37,715

Domain Services:
Wholesale
Domain Services				47,883	46,206	94,874	92,169
Value Added Services				5,482	4,741	10,562	9,049
	Total Wholesale			53,365	50,947				105,436	101,218

Retail				8,897	9,194	18,050	18,452
Total Domain Services				62,262	60,141				123,486	119,670

		$		75,093 $	82,122 $				145,968 $	166,107
(Decrease) increase over prior period		$		(7,029)	$						(20,139)
(Decrease) increase - percentage				(9)%				(12)%

	The following table presents our revenues, by revenue source, as a percentage of total revenues (Dollar amounts in thousands of U.S. dollars):

(Dollar amounts in thousands of U.S. dollars)			For the Three Months Ended	For the Six Months Ended June 30,
			2021			2020		2021				2020

Fiber Internet Services:
Fiber Internet Services				8%	5%			8%		5%

Network Access Services:
Mobile Services											Mobile Services
Retail mobile services				3%						22%	3%		23%
Mobile platform services				3%	0%			2%		0%
Other professional services				3%	0%			3%		0%
	Total Mobile			9%						22%	8%		23%

Domain Services:
Wholesale
Domain Services				64%						56%	65%		55%
Value Added Services				7%	6%			7%		6%
	Total Wholesale			71%						62%	72%		61%

Retail				12%						11%	12%		11%
Total Domain Services				83%						73%	84%		72%

				100%						100%	100%		100%

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	Total net revenues for the three months ended June 30, 2021 decreased by $7.0 million, or 9%, to $75.1 million from $82.1 million when compared to the three
months ended June 30, 2020. The three-month decrease in revenue was primarily driven by $10.6 million of reduced revenues attributable to our Mobile Servicessegment that was impacted by both the sale of the majority of the customer base of Ting Mobile to DISH Wireless and the shutdown of Roam Mobility brands in lateFiscal 2020. When compared to the three months ended June 30, 2020, the Mobile Services segment in the current period looks different as a result of our shift fromMVNO to MSE. As part of the DISH Purchase Agreement, as a form of consideration for the sale of the customer relationships, the Company receives a payout on themargin associated with the legacy customer base sold to DISH over the 10-year term of the agreement. This has been classified as Other Income and not consideredrevenue in the current period. This decrease in overall revenues is partially offset by increases from both Domain Services and Fiber Internet Services of $2.1 million and$1.4 million, respectively. For Domain Services this is reflective of continued wholesale registration growth as a result of the COVID-19 pandemic creating the need for anonline presence. For Fiber Internet Services, this is a result of the attraction of additional customers to Ting Internet from the continued buildout of our Fiber networkfootprint across the United States.
	Total net revenues for the six months ended June 30, 2021 decreased by $20.1 million, or 12%, to $146.0 million from $166.1 million when compared to the six
months ended June 30, 2020. The six-month decrease in revenue was primarily driven by $26.4 million of reduced revenues attributable to our Mobile Services segmentthat was impacted by both the sale of the majority of the customer base of Ting Mobile to DISH Wireless and the shutdown of Roam Mobility brands in late Fiscal 2020.When compared to the six months ended June 30, 2020, the Mobile Services segment in the current period looks different as a result of our shift from MVNO to MSE. Aspart of the DISH Purchase Agreement, as a form of consideration for the sale of the customer relationships, the Company receives a payout on the margin associatedwith the legacy customer base sold to DISH over the 10-year term of the agreement. This has been classified as Other Income and not considered revenue in the currentperiod. This decrease in overall revenues is partially offset by increases from both Domain Services and Fiber Internet Services of $3.8 million and $2.5 million,respectively. For Domain Services this is reflective of continued wholesale registration growth as a result of the COVID-19 pandemic creating the need for an onlinepresence. For Fiber Internet Services, this is a result of the attraction of additional customers to Ting Internet from the continued buildout of our Fiber network footprintacross the United States.
	Deferred revenue from domain name registrations and other Mobile and Internet services at June 30, 2021 increased by $2.7 million to $154.9 million from
$152.2 million at December 31, 2020. This increase was primarily driven by Domain Services, accounting for $3.4 million of the increase which is due to the increase incurrent period billings for domain name registration and service renewals. Fiber Internet Services accounted for less than $0.3 million of the increase. Theseincreases from Domain Services was offset by the impact from our Mobile Services segment, driving a $1.0 million decrease to deferred revenue due to provision ofservice for previously deferred billings for bundled professional services offered in connection with our MSE business.
	No customer accounted for more than 10% of total revenue during the three and six months ended June 30, 2021 or the three and six months ended June 30,
2020. DISH accounted for 45% of total accounts receivable as at June 30, 2021 and 59% of total accounts receivable as at December 31, 2020. Though a significantportion of the Company’s domain services revenues are prepaid by our customers, where the Company does collect receivables, significant management judgment isrequired at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing basis, we assess the abilityof our customers to make required payments. Based on this assessment, we expect the carrying amount of our outstanding receivables, net of allowance for doubtfulaccounts, to be fully collected.
	Fiber Internet Services

	Revenues from Ting Internet and billing solutions generated $5.8 million in revenue during the three months ended June 30, 2021, up $1.4 million or 32%
compared to the three months ended June 30, 2020. This growth is driven by subscriber growth across our Fiber network relative to the three months ended June 30,2020, as well as the continued expansion of our Ting Internet footprint to new Ting towns throughout the United States.
	Revenues from Ting Internet and billing solutions generated $11.2 million in revenue during the six months ended June 30, 2021, up $2.5 million
or 29% compared to the six months ended June 30, 2020. This growth is driven by subscriber growth across our Fiber network relative to the six months ended June 30,2020, as well as the continued expansion of our Ting Internet footprint to new Ting towns throughout the United States.
	As of June 30, 2021, Ting Internet had access to 71,000 serviceable addresses and 20,000 active subscribers under its management compared to having access
to 48,000 serviceable addresses and 13,000 active subscribers under its management as of June 30, 2020. These figures include the increase in serviceable addressesand subscribers attributable to the acquisition of Cedar Holdings Group, Incorporated ("Cedar") in January 2020.
	Mobile Services

	Retail Mobile Services

	Net revenues from Retail Mobile Services for the three months ended June 30, 2021 decreased by $15.1 million or 86% to $2.5 million as compared to the three
months ended June 30, 2020. This decrease is a result of the significant changes to our Mobile Services segment that occurred during Fiscal 2020 as we transitionedfrom MVNO to MSE. These changes include both the shutdown of the Roam Mobility brands in the second quarter of 2020 followed by the sale of substantially allof the Ting Mobile customer base on August 1, 2020 to DISH. Ting Mobile accounts for substantially all of this decrease (of which $2.0 million is reduced devicerevenues and $13.1 million relates to service revenues), followed by Roam Mobility at less than $0.1 million of the total decrease.
	Net revenues from Retail Mobile Services for the six months ended June 30, 2021 decreased by $33.1 million or 88% to $4.6 million as compared to the six
months ended June 30, 2020. This decrease is a result of the significant changes to our Mobile Services segment that occurred during Fiscal 2020 as we transitionedfrom MVNO to MSE. These changes include both the shutdown of the Roam Mobility brands in the second quarter of 2020 followed by the sale of substantially allof the Ting Mobile customer base on August 1, 2020 to DISH. Ting Mobile accounts for substantially all of this decrease (of which $3.6 million is reduced devicerevenues and $28.5 million relates to service revenues), followed by Roam Mobility at $1.1 million of the total decrease.
	The revenues earned from Retail Mobile Services for three and six months ended June 30, 2021 is only reflective of the mobile telephony services and
device revenues associated with the small group of customers retained by the Company from the sale of the historically larger Ting Mobile customer base to DISH. Asmentioned above, the payout the Company receives from the aforementioned sale has been classified as Other Income and not considered revenue in the current period.
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	Mobile Platform Services

	Net revenues from Mobile Platform Services for the three months ended June 30, 2021 increased to $2.5 million as compared to the three months ended June 30,
2020. Similarly, net revenues from Mobile Platform Services for the six months ended June 30, 2021 increased to $2.8 million as compared to the six months ended June 30,2020. These increases are both a result of the new MSE business created as a result of the DISH Purchase Agreement in the prior year. No such comparable revenuestream existed for the three or six months ended June 30, 2020. During the current period, the net revenues recognized include both platform fee billings as well asrevenues recognized from the previous deferral of bundled professional fees offered in connection with Mobile Platform Services. The Company has satisfied itsobligations to provide any bundled professional services revenues recognized in the current period. Tucows' MSE platform provides network access, provisioning andbilling services for MVNOs, of which DISH is currently our sole customer.
	Other Professional Services

	Net revenues from Other Professional Services for the three months ended June 30, 2021 increased to $2.0 million as compared to the three months ended June
30, 2020. Similarly, net revenues from Other Professional Services for the six months ended June 30, 2021 increased to $3.9 million as compared to the six months endedJune 30, 2020. These increases are both a result of the new MSE business created as a result of the DISH Purchase Agreement in the prior year. No such comparablerevenue stream existed for the three or six months ended June 30, 2020. Tucows' professional services include IT system development and other transitional servicesincluding sales, marketing, customer support, order fulfillment, and data analytics for MVNOs, of which DISH is currently our sole customer.
	Domain Services

	Wholesale - Domain Services

	During the three months ended June 30, 2021, Wholesale domain services revenue increased by $1.7 million or 4% to $47.9 million, when compared to the three
months ended June 30, 2020. Increases from Wholesale domain registration of $2.3 million from OpenSRS, EPAG, and Ascio brands driven by COVID-19 registrationgrowth were offset by decreases of $0.6 million from the eNom brands, which continues to see a decline in registrations by non-core customers relative to the threemonths ended June 30, 2020.
	During the six months ended June 30, 2021, Wholesale domain services revenue increased by $2.7 million or 3% to $94.9 million, when compared to the six
months ended June 30, 2020. Increases from Wholesale domain registration of $4.4 million from OpenSRS, EPAG, and Ascio brands driven by COVID-19 registrationgrowth were offset by decreases of $1.7 million from the eNom brands, which continues to see a decline in registrations by non-core customers relative to the six monthsended June 30, 2020.
	Total domains that were managed under the OpenSRS, eNom, EPAG, and Ascio domain services increased by 1.0 million domain names to 25.6 million as of
June 30, 2021, when compared to 24.6 million at June 30, 2020. The increase is a driven by the continued growth in registrations over this period as a result of the COVID-19 pandemic, as discussed above.
	Wholesale - Value Added Services

	During the three months ended June 30, 2021, value-added services revenue increased by $0.8 million to $5.5 million compared to the three months ended June
30, 2020. The increase was primarily driven by increased expiry revenue of $0.8 million and to a lesser extent from email revenues of $0.2 million, from both OpenSRS andeNom brands and their respective domain expiry streams. These increases were offset by other small decreases in Digital Certificates, and Other revenues of $0.2 million.
	During the six months ended June 30, 2021, value-added services revenue increased by $1.6 million to $10.6 million compared to the six months ended June 30,
2020. The increase was primarily driven by increased expiry revenue of $1.7 million and to a lesser extent from email revenues of $0.3 million, from both OpenSRS andeNom brands and their respective domain expiry streams. These increases were offset by other small decreases in Digital Certificates, and Other revenues of $0.4 million.
	Retail

	During the three months ended June 30, 2021, retail domain services revenue decreased by $0.3 million or 3% to $8.9 million compared to the three months
ended June 30, 2020. This was driven by decreased revenues related to Realnames email service and related surname portfolio sales of $0.3 million and a small decreasein retail domain name registrations of less than $0.1 million. These decreases were offset by a small increase in Exact Hosting revenues of less than $0.1 million. TheCompany expects all Realnames surname portfolio related sales to materially decline in Fiscal 2021 and thereafter.
	During the six months ended June 30, 2021, retail domain services revenue decreased by $0.4 million or 2% to $18.1 million compared to the six months ended
June 30, 2020. This was driven by decreased revenues related to Realnames email service and related surname portfolio sales of $0.4 million and a small decrease in ExactHosting revenues of less than $0.1 million. These decreases were offset by a small increase in retail domain registrations of less than $0.1 million. The Company expectsall Realnames surname portfolio related sales to materially decline in Fiscal 2021 and thereafter.

COST OF REVENUES
	Fiber Internet Services

	Cost of revenues primarily includes the costs for provisioning high speed Internet access, which is comprised of network access fees paid to third-parties to
use their network, leased circuit costs to directly support enterprise customers, the personnel and related expenses (net of capitalization) related to the physicalplanning, design, construction and build out of the physical Fiber network and as well as personnel and related expenses (net of capitalization) related to the installation,repair, maintenance and overall field service delivery of the Fiber business. Hardware costs include the cost of equipment sold to end customers, including routers,ONTs, and IPTV products, and any inventory adjustments on this inventory. Other costs include field vehicle expenses, small sundry equipment and supplies consumedin building the Fiber network and fees paid to third-party service providers primarily for printing services in connection with billing services to ISPs.

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	Mobile Services

	Retail Mobile Services

	Cost of revenues for Retail Mobile Services includes the costs of provisioning mobile services, which is primarily our customers' voice, messaging, data usage
provided by our Network Operator, and the costs of providing mobile phone hardware, which is the cost of mobile phone devices and SIM cards sold to our customers,order fulfillment related expenses, and inventory write-downs.
	Mobile Platform Services

	Cost of revenues, if any, to provide the MSE Platform services including network access, provisioning and billing services for MVNOs. This includes the
amortization of any capitalized contract fulfillment costs over the period consistent with the pattern of transferring network access, provisioning and billing services towhich the cost relates.
	Other Professional Services

	Cost of revenues to provide professional services, including transitional services, to our MVNO customers to help support their businesses. This includes any
personnel and contractor fees for any client service resources retained by the Company. Only a subset of the Company's employee base provides professional servicesto our MVNO customers. This cost reflects that group of resources.
	Domain Services

	Wholesale - Domain Services

	Cost of revenues for domain registrations represents the amortization of registry and accreditation fees on a basis consistent with the recognition of revenues
from our customers, namely rateably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domainis registered, and are initially recorded as prepaid domain registry fees. This accounting treatment reasonably approximates a recognition pattern that corresponds withthe provision of the services during the period. Market development funds that do not represent a payment for distinct goods or services provided by the Company,and thus do not meet the criteria for revenue recognition under ASU 2014-09, are reflected as cost of goods sold and are recognized as earned.
	Wholesale - Value-Added Services

	Costs of revenues for value-added services include licensing and royalty costs related to the provisioning of certain components of related to hosted email and
fees paid to third-party hosting services. Fees payable for trust certificates are amortized on a basis consistent with the provision of service, generally one year, whileemail hosting fees and monthly printing fees are included in cost of revenues in the month they are incurred.
	Retail

	Costs of revenues for our provision and management of Internet services through our retail sites, Hover.com and the eNom branded sites, include the
amortization of registry fees on a basis consistent with the recognition of revenues from our customers, namely rateably over the term of provision of the service.Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are recorded as prepaid domain registry fees and areexpensed rateably over the renewal term. Costs of revenues for our surname portfolio represent the amortization of registry fees for domains added to our portfolio overthe renewal period, which is generally one year, the value attributed under intangible assets to any domain name sold and any impairment charges that may arise fromour assessment of our domain name intangible assets.
	Network expenses

	Network expenses include personnel and related expenses related to the network operations, IT infrastructure and supply chain teams that support our various
business segments. It also includes network depreciation and amortization, communication and productivity tool costs, and equipment maintenance costs.Communication and productivity tool costs includes collaboration, customer support, bandwidth, co-location and provisioning costs we incur to support the supply ofall our services.

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	The following table presents our cost of revenues, by revenue source:

			Three Months Ended June 30,	Six Months Ended June 30,
			2021				2020		2021			2020

Fiber Internet Services:
Fiber Internet Services		$			3,026 $	1,665 $				5,661 $	3,381

Mobile Services:
Retail mobile services					1,487	8,660				2,541	18,517
Mobile platform services					93	-				151	-
Other professional services					1,740	-				3,406	-
Total Mobile					3,320	8,660				6,098	18,517

Domain Services:
Wholesale
Domain Services					37,707	36,354	73,483	72,823
Value Added Services					583	734				1,180	1,489
	Total Wholesale				38,290	37,088	74,663	74,312

Retail					4,497	4,377				8,898	8,768
Total Domain Services					42,787	41,465	83,561	83,080

Network Expenses:
Network, other costs					3,612	2,485				6,850	4,901
Network, depreciation and amortization costs					4,108	3,356				8,045	6,587
Network, impairment					1	1,525				61	1,525
Total Network Expenses					7,721	7,366	14,956	13,013

		$			56,854 $	59,156 $	110,276 $				117,991

	The following table presents our cost of revenues, as a percentage of total cost of revenues for the periods presented:

		For the Three Months Ended June 30,	For the Six Months Ended June 30,
			2021				2020		2021			2020

Fiber Internet Services:
Fiber Internet Services					5%	3%				5%	3%


Mobile Services:
Retail mobile services					3%	15%				2%	16%
Mobile platform services					0%	0%				0%	0%
Other professional services					3%	0%				3%	0%
	Total Mobile				6%	15%				5%	16%

Domain Services:
Wholesale
Domain Services					67%	61%				68%	63%
Value Added Services					1%	1%				1%	1%
	Total Wholesale				68%	62%				69%	64%

Retail					8%	7%				8%	7%
Total Domain Services					76%	69%				77%	71%

Network Expenses:
Network, other costs					6%	4%				6%	4%
Network, depreciation and amortization costs					7%	6%				7%	6%
Network, impairment					0%	3%				0%	0%
					13%	13%				13%	10%

					100%	100%				100%	100%

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	Total cost of revenues for the three months ended June 30, 2021, decreased by $2.3 million, or 4%, to $56.9 million from $59.2 million in the three months ended
June 30, 2020. The three-month decrease in cost of revenues was primarily driven by $5.3 million of reduced costs attributable to our Mobile Services segment. Asdiscussed above in the Net Revenue section, our Mobile Services segment was impacted by both the sale of the majority of the customer base of Ting Mobile to DISHWireless and the shutdown of Roam Mobility brands in late Fiscal 2020. When compared to the three months ended June 30, 2020, the Mobile Services segment in thecurrent period looks different as a result of our shift from MVNO to MSE. Both these factors contribute to the three months ended June 30, 2021 having significantlylower costs. This decrease in overall cost of revenues is offset by increases from Fiber Internet Services costs, Domain Services costs as well as increases in NetworkExpenses of $1.4 million, $1.3 million, and $0.4 million respectively. This increase from Fiber Internet Services is related to the continued expansion of our existing TingInternet footprint, which is aligned with the discussion above in the Net Revenue section for the segment. The increase from Domain Services is a result of registrycosts related to the strong performance and additions to domains under management as a result of the COVID-19 pandemic. Network expenses increased as a result ofthe expansion of the Company’s increased network infrastructure associated with the continuing expansion of the Ting Fiber footprint and an increase in communicationand productivity tool costs across our service lines.
	Total cost of revenues for the six months ended June 30, 2021, decreased by $7.7 million, or 7%, to $110.3 million from $118.0 million in the six months ended
June 30, 2020. The six-month decrease in cost of revenues was primarily driven by $12.4 million of reduced costs attributable to our Mobile Services segment. Asdiscussed above in the Net Revenue section, our Mobile Services segment was impacted by both the sale of the majority of the customer base of Ting Mobile to DISHWireless and the shutdown of Roam Mobility brands in late Fiscal 2020. When compared to the six months ended June 30, 2020, the Mobile Services segment in thecurrent period looks different as a result of our shift from MVNO to MSE. Both these factors contribute to the six months ended June 30, 2021 having significantly lowercosts. The decrease in overall cost of revenues is offset by increases from Fiber Internet Services costs, Domain Services costs as well as increases in NetworkExpenses of $2.3 million, $0.5 million, and $1.9 million respectively. This increase from Fiber Internet Services is related to the continued expansion of our existing TingInternet footprint, which is aligned with the discussion above in the Net Revenue section for the segment. The increase from Domain Services is a result of registrycosts related to the strong performance and additions to domains under management as a result of the COVID-19 pandemic. Network expenses increased as a result ofthe expansion of the Company’s increased network infrastructure associated with the continuing expansion of the Ting Fiber footprint and an increase in communicationand productivity tool costs across our service lines.
	Deferred costs of fulfillment as of June 30, 2021 increased by $3.5 million, or 3%, to $114.6 million from $111.1 million at December 31, 2020. This increase was
primarily driven by Domain Services, accounting for $2.2 million of the increase which is due to the increase in current period costs for domain name registration andservice renewals. Our Mobile Services segment followed, driving $1.3 million of the increase due to the capitalization of costs incurred in connection with the fulfillmentof our MSE agreement with DISH.
	Fiber Internet Services

	During the three months ended June 30, 2021, costs related to provisioning high speed Internet access and billing solutions increased $1.3 million or 76%,
to $3.0 million as compared to $1.7 million during three months ended June 30, 2020. The increase in costs were primarily driven by increased direct costs and bandwidthcosts related to the continued expansion of the Ting Fiber network. Although directionally aligned with the experienced growth in revenue over the same period, theoutpaced increase in cost of revenues for Fiber Internet services is a result of the necessary upfront investment and expenditure needed to build out the network inadvance of anticipated revenue growth in any particular location.
	During the six months ended June 30, 2021, costs related to provisioning high speed Internet access and billing solutions increased $2.3 million or 68%, to $5.7
million as compared to $3.4 million during six months ended June 30, 2020. The increase in costs were primarily driven by increased direct costs and bandwidthcosts related to the continued expansion of the Ting Fiber network. Although directionally aligned with the experienced growth in revenue over the same period, theoutpaced increase in cost of revenues for Fiber Internet services is a result of the necessary upfront investment and expenditure needed to build out the network inadvance of anticipated revenue growth in any particular location.
	Mobile Services

	Retail Mobile Services

	Cost of revenues from Retail Mobile Services for the three months ended June 30, 2021 decreased by $7.2 million or 82%, to $1.5 million from $8.7 million in
the three months ended June 30, 2020. Consistent with the above discussion around net revenues, this decrease is a result of the significant changes to our MobileServices segment that occurred during Fiscal 2020 as we transitioned from MVNO to MSE. Ting Mobile accounts for $6.8 million of this decrease (of which $2.3 million isreduced device costs and $4.5 million relates to reduced service costs), followed by Roam Mobility at $0.3 million of the total decrease. The cost of revenues incurredfrom Retail Mobile Services for three months ended June 30, 2021 is only reflective of the mobile telephony services and device costs associated with the small group ofcustomers retained by the Company from the sale of the historically larger Ting Mobile customer base to DISH. The decline also included reduced minimum commitmentcharges which decreased by $0.3 million as compared to the three months ended June 30, 2020.
	Cost of revenues from Retail Mobile Services for the six months ended June 30, 2021 decreased by $16.0 million or 86%, to $2.5 million from $18.5 million in
the six months ended June 30, 2020. Consistent with the above discussion around net revenues, this decrease is a result of the significant changes to our MobileServices segment that occurred during Fiscal 2020 as we transitioned from MVNO to MSE. Ting Mobile accounts for $15.2 million of this decrease (of which $4.2 millionis reduced device costs and $11.0 million relates to reduced service costs), followed by Roam Mobility at $0.8 million of the total decrease. The cost of revenues incurredfrom Retail Mobile Services for six months ended June 30, 2021 is only reflective of the mobile telephony services and device costs associated with the small group ofcustomers retained by the Company from the sale of the historically larger Ting Mobile customer base to DISH. The decline also included reduced minimum commitmentcharges which decreased by $0.4 million as compared to the six months ended June 30, 2020.
	Mobile Platform Services Cost of revenues from Mobile Platform Services for the three months ended June 30, 2021 increased to $0.1 million as compared to the three months ended June
30, 2020. Cost of revenues from Mobile Platform Services for the six months ended June 30, 2021 increased to $0.2 million as compared to the six months ended June 30,2020. These increases are both a result of the new MSE business created as a result of the DISH Purchase Agreement in the prior year. No such comparable cost ofrevenues existed for the three or six months ended June 30, 2020. Tucows' MSE platform provides network access, provisioning and billing services for MVNOs, ofwhich DISH is currently our sole customer. Costs incurred represent the amortization of previously capitalized costs incurred to fulfill the DISH MSE agreement over theterm of the agreement.
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	Other Professional Services Cost of revenues from Other Professional Services for the three months ended June 30, 2021 increased to $1.7 million as compared to the three months ended
June 30, 2020. Cost of revenues from Other Professional Services for the six months ended June 30, 2021 increased to $3.4 million as compared to the six months endedJune 30, 2020. These increases are both a result of the new MSE business created as a result of the DISH Purchase Agreement in the prior year. No such comparablecost of revenues existed for the three or six months ended June 30, 2020. Tucows' professional services include IT system development and other transitional servicesincluding sales, marketing, customer support, order fulfillment, and data analytics for MVNOs, of which DISH is currently our sole customer. Costs incurred representthe personnel and related expenses of employees providing professional services to DISH.
	Domain Services

	Wholesale - Domain Services

	Costs for Wholesale domain services for the three months ended June 30, 2021 increased by $1.3 million to $37.7 million, when compared to the three months
ended June 30, 2020. Consistent with the above discussion around net revenues, this increase in costs is aligned to the strong performance and additions to domainsunder management as a result of the COVID-19 pandemic; as registration costs are recognized from previously deferred billed costs. The Company experiencedincreases in wholesale domain registration costs of $1.8 million from OpenSRS, EPAG, and Ascio brands, offset by decreases of $0.5 million from the eNom brands whichhas seen a decline in registrations over the period.
	Costs for Wholesale domain services for the six months ended June 30, 2021 increased by $0.7 million to $73.5 million, when compared to the six months ended
June 30, 2020. Consistent with the above discussion around net revenues, this increase in costs is aligned to the strong performance and additions to domains undermanagement as a result of the COVID-19 pandemic; as registration costs are recognized from previously deferred billed costs. The Company experienced increases inwholesale domain registration costs of $2.0 million from OpenSRS, EPAG, and Ascio brands, offset by decreases of $1.3 million from the eNom brands which has seen adecline in registrations over the period.
	Wholesale - Value-Added Services

	Costs for wholesale value-added services for the three months ended June 30, 2021 decreased by $0.1 million to $0.6 million, when compared to the three
months ended June 30, 2020. This was driven by decreases in Digital Certificates and Other revenues of $0.1 million during the three months ended June 30, 2020, offsetby a small increase in Expiry stream costs.
	Costs for wholesale value-added services for the six months ended June 30, 2021 decreased by $0.3 million to $1.2 million, when compared to the six months
ended June 30, 2020. This was driven by decreases in Digital Certificates and Other revenues of $0.3 million during the six months ended June 30, 2020, offset by a smallincrease in Expiry stream costs.
	Retail

	Costs for retail domain services for the three months ended June 30, 2021 increased by $0.1 million to $4.5 million, when compared to the three months ended
June 30, 2020. This was driven by both increased costs related to retail domain name registrations and Exact Hosting related costs of less than $0.1 million, respectively.
	Costs for retail domain services for the six months ended June 30, 2021 increased by $0.1 million to $8.9 million, when compared to the six months ended June
30, 2020. This was driven by both increased costs related to retail domain name registrations and Exact Hosting related costs of less than $0.1 million, respectively.
	Network Expenses

	Network costs for the three months ended June 30, 2021 increased by $0.3 million to $7.7 million when compared to the three months ended June 30, 2020. The
three-month increase was driven by increased network costs for our Fiber and Mobile service lines of $1.1 million, followed by increased depreciation as a result of theCompany's increased network infrastructure associated with the continuing expansion of the Ting Fiber footprint of $1.0 million. These increases were offset by adecrease from impairment charges, where three months ended June 30, 2020 included a $1.5 million charge for Ting TV, a product under development for Ting Fiber thatwas discontinued. This was followed by a decrease in amortization charges of $0.3 million driven by the full amortization of the Ascio Technology intangible assetacquired in 2019.
	Network costs for the six months ended June 30, 2021 increased by $2.0 million to $15.0 million when compared to the six months ended June 30, 2020. The six-
month increase was driven by increased network costs for our Fiber and Mobile service lines of $2.0 million, followed by increased depreciation as a result of theCompany's increased network infrastructure associated with the continuing expansion of the Ting Fiber footprint of $1.8 million. These increases were offset by adecrease from impairment charges, where six months ended June 30, 2020 included a $1.5 million charge for Ting TV, a product under development for Ting Fiber that wasdiscontinued. This was followed by a decrease in amortization charges of $0.4 million driven by the full amortization of the Ascio Technology intangible asset acquiredin 2019.
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Table of Contents SALES AND MARKETING
	Sales and marketing expenses consist primarily of personnel costs. These costs include commissions and related expenses of our sales, product management,
public relations, call center, support and marketing personnel. Other sales and marketing expenses include customer acquisition costs, advertising and other promotionalcosts.
	(Dollar amounts in thousands of U.S. dollars)
		For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021		2020	2021				2020
	Sales and marketing	$		9,376 $				9,218 $	17,687 $	18,203
	Increase over prior period	$			158			$	(516)
	Increase - percentage				2%				(3)%
	Percentage of net revenues				12%			11%	12%	11%

	Sales and marketing expenses for the three months ended June 30, 2021 increased by $0.2 million, or 2%, to $9.4 million as compared to the three months ended
June 30, 2020. This three-month increase primarily related to increased stock-based compensation expenses to attract and retain labor and increased facility and supplycosts driven by the expansion of our Ting Fiber internet footprint in select Ting towns across the U.S. These increases are partially offset by savings in marketingrelated expenses for Mobile Services due to the sale of the Ting Mobile customer base to DISH and shutdown of Roam Mobility brands in the prior year, which reducedmarketing costs for our Mobile Services segment in the current period.
	Sales and marketing expenses for the six months ended June 30, 2021 decreased by $0.5 million, or 3%, to $17.7 million as compared to the six months ended
June 30, 2020. This six-month decrease primarily related to a savings in marketing related expenses for Mobile Services due to the sale of the Ting Mobile customer baseto DISH and shutdown of Roam Mobility brands in the prior year, which reduced marketing costs for our Mobile Services segment in the current period. This overalldecrease was partially offset by increased stock-based compensation expenses to attract and retain labor.

TECHNICAL OPERATIONS AND DEVELOPMENT
	Technical operations and development expenses consist primarily of personnel costs and related expenses required to support the development of new or
enhanced service offerings and the maintenance and upgrading of existing infrastructure. This includes expenses incurred in the research, design and development oftechnology that we use to register domain names, network access services, email, retail, domain portfolio and other Internet services, as well as to distribute our digitalcontent services. All technical operations and development costs are expensed as incurred.

	(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021		2020	2021				2020
	Technical operations and development	$			3,170 $			3,067 $	6,302 $	5,818
	Increase over prior period	$			103	$				484
	Increase - percentage				3%					8%
	Percentage of net revenues				4%			4%	4%	4%

	Technical operations and development expenses for the three months ended June 30, 2021 increased by $0.1 million, or 3%, to $3.2 million when compared to
the three months ended June 30, 2020. The increase in costs relates primarily to increased stock-based compensation expenses to attract and retain labor, as well asincreased spending on external contractors to provide development resources to assist our internal shared services and engineering teams with development aspects ofthe MSE platform.
	Technical operations and development expenses for the six months ended June 30, 2021 increased by $0.5 million, or 8%, to $6.3 million when compared to the
six months ended June 30, 2020. The increase in costs relates primarily to increased salaries and benefits driven by an expanding workforce and wage inflation focusedon our shared services and engineering teams. In addition to an increase in internal resource costs, a substantial portion of this overall increase was driven fromincreased spending on external contractors to provide development resources to assist our internal shared services and engineering teams with development aspects ofthe MSE platform. GENERAL AND ADMINISTRATIVE
	General and administrative expenses consist primarily of compensation and related costs for managerial and administrative personnel, fees for professional
services, public listing expenses, rent, foreign exchange and other general corporate expenses.
	(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021		2020	2021				2020
	General and administrative	$		5,210 $				5,465 $	10,163 $	10,206
	Decrease over prior period	$			(255)			$	(43)
	Decrease - percentage				(5)%				(0)%
	Percentage of net revenues				7%			7%	7%	6%

	General and administrative expenses for the three months ended June 30, 2021 decreased by $0.3 million, or 5% to $5.2 million as compared to the three months
ended June 30, 2020. The decrease was primarily driven by reduced Mobile Services credit card fees and bad debt charges as a result of the DISH Purchase Agreementthat closed in the prior year, as well as a decrease in foreign exchange related expenses. These decreases were partially offset by increases in personnel and relatedexpenses as well as stock-based compensation expenses in order to attract, retain and scale core administrative teams including Human Resources and Finance to meetprojected Company growth.
	General and administrative expenses for the six months ended June 30, 2021 remained flat at $10.2 million, as compared to the six months ended June 30, 2020.
				37

Table of Contents DEPRECIATION OF PROPERTY AND EQUIPMENT

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021					2020		2021				2020
		Depreciation of property and equipment	$		127 $					125 $	248 $		238
		Increase over prior period	$		2	$			10
		Increase - percentage			2%				4%
		Percentage of net revenues			0%					0%	0%		0%

		Depreciation costs remained flat for the three months ended June 30, 2021 at $0.1 million when compared to the three months ended June 30, 2020. Depreciation costs remained flat for the six months ended June 30, 2021 at $0.2 million when compared to the six months ended June 30, 2020.
AMORTIZATION OF INTANGIBLE ASSETS

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021					2020		2021				2020
		Amortization of intangible assets	$	2,322 $					2,504 $	4,642 $		5,451
		Decrease over prior period	$	(182)									$	(809)
		Decrease - percentage			(7)%						(15)%
		Percentage of net revenues			3%					3%	3%		3%

		Amortization of intangible assets for the three months ended June 30, 2021 decreased by $0.2 million to $2.3 million as compared to the three months ended
June 30, 2020. The decrease is driven by write-off of Mobile Services related intangible assets in connection with the both the sale of the Ting Mobile customer base andthe shutdown of Roam Mobility in the prior year. These decreases in amortization expense of $0.4 million, were partially offset by an increase related to the prior yearacquisition of Cedar which accounted for a $0.2 million increase to adjust amortization expense post-acquisition. Network rights, brand and customer relationshipsacquired in connection with the following acquisitions are amortized on a straight-line basis over a range of two to seven years: eNom in January 2017, Ascio in March2019, and Cedar in January 2020.
		Amortization of intangible assets for the six months ended June 30, 2021 decreased by $0.8 million to $4.6 million as compared to the six months ended June 30,
2020. The decrease is driven by write-off of Mobile Services related intangible assets in connection with the both the sale of the Ting Mobile customer base and theshutdown of Roam Mobility in the prior year. Network rights, brand and customer relationships acquired in connection with the following acquisitions are amortized ona straight-line basis over a range of two to seven years: eNom in January 2017, Ascio in March 2019, and Cedar in January 2020.

IMPAIRMENT OF DEFINITE LIFE INTANGIBLE ASSETS

	For the Three Months Ended June
		(Dollar amounts in thousands of U.S. dollars)					30,	For the Six Months Ended June 30,
				2021					2020		2021				2020
		Impairment of definite life intangible assets	$				- $					1,431 $	- $		1,431
		Decrease over prior period	$				(1,431)	$			(1,431)
		Decrease - percentage					(100)%				(100)%
		Percentage of net revenues					-%	2%			-%		1%
		Impairment of definite life intangible assets for the three and six months ended June 30, 2021 decreased by $1.4 million as compared to the three and six months
ended June 30, 2020. The decrease is driven by the write-off of Roam Mobility brands customer relationships that were written off in the prior year when the Companydecided to shut down the related businesses as a result of lack of demand for SIM-enabled roaming services due to the COVID-19 pandemic.

LOSS (GAIN) ON CURRENCY FORWARD CONTRACTS
		Although our functional currency is the U.S. dollar, a major portion of our fixed expenses are incurred in Canadian dollars. Our goal with regard to foreign
currency exposure is, to the extent possible, to achieve operational cost certainty, manage financial exposure to certain foreign exchange fluctuations and to neutralizesome of the impact of foreign currency exchange movements. Accordingly, we enter into foreign exchange contracts to mitigate the exchange rate risk on portions of ourCanadian dollar exposure.

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021					2020		2021				2020
		Loss (gain) on currency forward contracts	$		63 $					(381) $	(190) $		60
		Increase over prior period	$		444	$			(250)
		Increase - percentage			117%				417%
		Percentage of net revenues			0%					0%	0%		0%

		The Company recorded a net loss of $0.1 million on the change in fair value of outstanding contracts as well as realized on matured contracts during the three
months ended June 30, 2021, compared to a net gain of $0.4 million during the three months ended June 30, 2020.
		The Company recorded a net gain of $0.2 million on the change in fair value of outstanding contracts as well as realized on matured contracts during the six
months ended June 30, 2021, compared to a net loss of $0.1 million during the six months ended June 30, 2020.
		At June 30, 2021, our balance sheet reflects a derivative instrument asset of $1.8 million and a liability of $0.1 million as a result of our existing foreign exchange
contracts. Until their respective maturity dates, these contracts will fluctuate in value in line with movements in the Canadian dollar relative to the U.S. dollar.
	38

Table of Contents OTHER INCOME (EXPENSES)

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021		2020		2021				2020
		Other income (expense), net	$	3,722 $					(931) $	8,085 $	(2,168)
		Increase over prior period	$	4,653					$	10,253
		Increase - percentage		(500)%						(473)%
		Percentage of net revenues			5%	1%	6%	1%

		Other Income during the three months ended June 30, 2021 increased by $4.7 million when compared to the three months ended June 30, 2020. This
was primarily due to the $4.8 million increase due to the gain on sale of Ting Customer Assets to DISH in the current period. As described above, the Company receivesa payout on the margin associated with the legacy customer base sold to DISH over the 10-year term of the agreement, as form of consideration for the sale of the legacycustomer relationships. In addition to this, an offsetting factor in the increase was higher interest incurred on our Amended 2019 Credit Facility (as defined below) withthe majority of the borrowings used to support the build-out of the Ting Fiber network. Other expense consists primarily of the interest we incur in connection with ourAmended 2019 Credit Facility. The interest incurred primarily relates to our loan balances obtained to fund the acquisition of eNom, Ascio and Cedar and funding forexpenditures associated with the Company’s Fiber to the Home build program.
		Other Income during the six months ended June 30, 2021 increased by $10.3 million when compared to the six months ended June 30, 2020. This was primarily
due to the $10.2 million increase due to the gain on sale of Ting Customer Assets to DISH in the current period. As described above, the Company receives a payout onthe margin associated with the legacy customer base sold to DISH over the 10-year term of the agreement, as form of consideration for the sale of the legacy customerrelationships. Offsetting this increase was lower interest incurred on our Amended 2019 Credit Facility with the majority of the borrowings used to support the build-outof the Ting Fiber network due to lower variable interest rates relative to the prior year. Other expense consists primarily of the interest we incur in connection with ourAmended 2019 Credit Facility. The interest incurred primarily relates to our loan balances obtained to fund the acquisition of eNom, Ascio and Cedar and funding forexpenditures associated with the Company’s Fiber to the Home build program. INCOME TAXES
		The following table presents our provision for income taxes for the periods presented: (Dollar amounts in thousands of U.S. dollars)
			For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021		2020		2021				2020
		Provision for income taxes	$	(119) $					449 $	964 $	1,550
		Decrease in provision over prior period	$	(568)					$	(586)
		Decrease - percentage		(127)%						(38)%
		Effective tax rate			- 7%	74%	20%	34%
		We operate in various tax jurisdictions, and accordingly, our income is subject to varying rates of tax. Losses incurred in one jurisdiction cannot be used to
offset income taxes payable in another jurisdiction. Our ability to use income tax loss carry forwards and future income tax deductions is dependent upon our operationsin the tax jurisdictions in which such losses or deductions arise. Income taxes are computed using the asset and liability method, under which deferred tax assets andliabilities are determined based on the difference between the financial statement carrying values and tax base of assets and liabilities using enacted tax rates in effect forthe year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amountexpected to be realized.
		For the three months ended June 30, 2021, we recorded an income tax recovery of $0.1 million on income before income taxes of 1.7 million, using an estimated
effective tax rate for Fiscal 2021 adjusted for certain minimum state taxes as well as the inclusion of a $0.4 million tax recovery related to ASU 2016-09, which requires allexcess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense. Our effective tax rate for the threemonths ended June 30, 2021 is impacted by discrete adjustments resulting from finalization of prior period tax filings, foreign exchange and mark-to-market adjustments.Comparatively, for the three months ended June 30, 2020, we recorded an income tax expense of $0.4 million on income before taxes of $0.6 million, using an estimatedeffective tax rate for the 2020 fiscal year and reflecting the $0.1 million tax recovery impact related to ASU 2016-09.
		For the six months ended June 30, 2021, we recorded an income tax expense of $1.0 million on income before income taxes of $4.9 million, using an estimated
effective tax rate for Fiscal 2021 adjusted for certain minimum state taxes as well as the inclusion of a $0.2 million tax recovery related to ASU 2016-09, which requires allexcess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense. Our effective tax rate for the six monthsended June 30, 2021 is impacted by discrete adjustments resulting from finalization of prior period tax filings, foreign exchange and mark-to-market adjustments.Comparatively, for the six months ended June 30, 2020, we recorded an income tax expense of $1.6 million on income before taxes of $4.5 million, using an estimatedeffective tax rate for the 2020 fiscal year and reflecting the $0.2 million tax recovery impact related to ASU 2016-09.
		In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which those temporarydifferences become deductible. Management projected future taxable income, uncertainties related to the industry in which the Company operates, and tax planningstrategies in making this assessment.
		We recognize accrued interest and penalties related to income taxes in income tax expense. We did not have significant interest and penalties accrued at June
30, 2021 and December 31, 2020, respectively.
	39

Table of Contents ADJUSTED EBITDA
	We believe that the provision of this supplemental non-GAAP measure allows investors to evaluate the operational and financial performance of our core
business using similar evaluation measures to those used by management. We use adjusted EBITDA to measure our performance and prepare our budgets. Sinceadjusted EBITDA is a non-GAAP financial performance measure, our calculation of adjusted EBITDA may not be comparable to other similarly titled measures of othercompanies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Becauseadjusted EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cashrequirements of the business, it should not be considered as a liquidity measure. See the Consolidated Statements of Cash Flows included in the attached financialstatements. Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same orsimilar captions that are used by other companies and/or analysts and may differ from period to period. We endeavor to compensate for these limitations by providingthe relevant disclosure of the items excluded in the calculation of adjusted EBITDA to net income based on GAAP, which should be considered when evaluating theCompany's results. Tucows strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.
	Our adjusted EBITDA definition excludes depreciation, amortization of intangible assets, income tax provision, interest expense (net), accretion of contingent
consideration, stock-based compensation, asset impairment, gains and losses from unrealized foreign currency transactions and costs that are one-time in nature andnot indicative of on-going performance (profitability), including acquisition and transition costs. Gains and losses from unrealized foreign currency transactionsremoves the unrealized effect of the change in the mark-to-market values on outstanding foreign currency contracts not designated in accounting hedges, as well as theunrealized effect from the translation of monetary accounts denominated in non-U.S. dollars to U.S. dollars.
	The following table reconciles adjusted EBITDA to net income: Reconciliation of Adjusted EBITDA to Income before Provision for IncomeTaxes
			Three Months Ended June 30,	Six Months Ended June 30,
	(In Thousands of US Dollars)				2021		2020		2021					2020
	(unaudited)		(unaudited)					(unaudited)		(unaudited)					(unaudited)

	Adjusted EBITDA	$			11,158 $	12,175 $	23,881 $	24,856
	Depreciation of property and equipment					4,211	3,155					7,970	6,145
	Impairment and loss on disposition of property and equipment					6	1,525					66	1,525
	Amortization of intangible assets				2,346	2,830					4,965	6,131
	Impairment of definite life intangible assets					-	1,431					-	1,431
	Interest expense, net				1,003	846					1,939	1,996
	Accretion of contingent consideration					95	85					191	172
	Stock-based compensation				1,209	847					2,231	1,648
	Unrealized loss (gain) on change in fair value of forward contracts					191	(436)					357	(88)
	Unrealized loss (gain) on foreign exchange revaluation of foreigndenominated monetary assets and liabilities
						42	441					106	399
	Acquisition and other costs1					367	845					1,136	956

	Income before provision for income taxes	$			1,688 $	606 $					4,920 $	4,541

1Acquisition and other costs represents transaction-related expenses, transitional expenses, such as redundant post-acquisition expenses, primarily related toour acquisition of Ascio in March 2019, Cedar in January 2020, and the disposition of certain Ting Mobile assets in August 2020. Expenses include severance ortransitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.

	Adjusted EBITDA decreased by $1.0 million to $11.2 million for the three months ended June 30, 2021 when compared to the three months ended June 30, 2020.
The decrease in adjusted EBITDA from period-to-period was primarily driven by the increased investment in Ting Fiber due to the ramp of expenditures related to theFiber network build and expansion plan. This decrease was partially offset by increased contributions from Mobile Services due to the gain on sale of Ting CustomerAssets earned as Other Income and new MSE Platform revenues in the current period.
	Adjusted EBITDA decreased by $1.0 million to $23.9 million for the six months ended June 30, 2021 when compared to the six months ended June 30, 2020. The
decrease in adjusted EBITDA from period-to-period was primarily driven by the increased investment in Ting Fiber due to the ramp of expenditures related to the Fibernetwork build and expansion plan. This decrease was partially offset by increased contributions from both Domain Services from strong performance and additions todomains under management as a result of the COVID-19 pandemic; and from Mobile Services due to the gain on sale of Ting Customer Assets earned as Other Incomeand new MSE Platform revenues in the current period.
		40

Table of Contents OTHER COMPREHENSIVE INCOME (LOSS)
	To mitigate the impact of the change in fair value of our foreign exchange contracts on our financial results, in October 2012 we begun applying hedge
accounting for the majority of the contracts we need to meet our Canadian dollar requirements on a prospective basis.
	The following table presents other comprehensive income for the periods presented: (Dollar amounts in thousands of U.S. dollars)
		For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2021		2020		2021				2020
	Other comprehensive income (loss)	$			(773) $	1,314 $	(1,239) $		123
	Decrease over prior period	$		(2,087)	$				(1,362)
	Decrease - percentage				(159)%					(1,107)%
	Percentage of net revenues				(1)%	2%				(1)%	0%

	The impact of the fair value adjustments on outstanding hedged contracts for the three months ended June 30, 2021 was a gain in OCI before reclassifications
of $0.2 million as compared to a gain in OCI of $1.1 million before reclassifications for the three months ended June 30, 2020.

	The net amount reclassified to earnings during the three months ended June 30, 2021 was a gain of $1.0 million compared to a loss of $0.2 million during the
three months ended June 30, 2020.
	The impact of the fair value adjustments on outstanding hedged contracts for the six months ended June 30, 2021 was a gain in OCI before reclassifications of
$0.6 million as compared to a loss in OCI of $0.1 million before reclassifications for the six months ended June 30, 2020.

	The net amount reclassified to earnings during the six months ended June 30, 2021 was a gain of $1.9 million compared to a loss of $0.2 million during the six
months ended June 30, 2020.

LIQUIDITY AND CAPITAL RESOURCES
	As of June 30, 2021, our cash and cash equivalents balance decreased by $1.0 million when compared to December 31, 2020. Our principal uses of cash were
$21.7 million for the continued investment in property and equipment driven by Ting Fiber expansion, and $2.0 million related to an investment in an unrelated entity.These uses of cash were offset by $18.0 million proceeds received from the drawdown of the Amended 2019 Credit Facility, $3.5 million from cash provided fromoperating activities and $1.2 million from the proceeds received on the exercise of stock options.
Amended 2019 Credit Facility
	On June 14, 2019, the Company and its wholly-owned subsidiaries, Tucows.com Co., Ting Fiber, Inc., Ting Inc., Tucows (Delaware) Inc. and Tucows (Emerald),
LLC, entered into an Amended and Restated Senior Secured Credit Agreement with RBC, as administrative agent, and lenders party thereto (collectively with RBC, the“Lenders”) under which the Company has access to an aggregate of up to $240 million in funds, which consists of $180 million guaranteed credit facility and a $60million accordion facility. On November 27, 2019, the Company entered into Amending Agreement No. 1 to the Amended and Restated Senior Secured Credit Agreement(collectively with the Amended and Restated Senior Secured Credit Agreement, the “Amended 2019 Credit Facility”) to amend certain defined terms in connection withthe Cedar acquisition.
	The Amended 2019 Credit Facility replaced a secured Credit Agreement dated January 20, 2017 with Bank of Montreal, RBC and Bank of Nova Scotia.

	The obligations of the Company under the Amended 2019 Credit Agreement are secured by a first priority lien on substantially all of the personal property and
assets of the Company and has a four-year term, maturing on June 13, 2023.

		41

Table of Contents Cash Flow from Operating Activities
	Net cash inflows from operating activities during the six months ended June 30, 2021 totaled $17.6 million, a decrease of 23% when compared to the six months
ended June 30, 2020.
	Net income, after adjusting for non-cash charges, during the six months ended June 30, 2021 was $18.4 million, a decrease of 4% when compared to the prior
year. Net income included non-cash charges and recoveries of $14.5 million such as depreciation, amortization, stock-based compensation, loss (gain) on change in fairvalue of currency forward contracts, net right of use operating asset or liability, accretion of contingent consideration, amortization of debt discount and issuancecosts, impairment of property and equipment, loss on disposal of domain names, net amortization of contract costs, excess tax benefits on stock-based compensation,and deferred income taxes (recovery). In addition, changes in our working capital used net cash of $0.8 million. Utilized cash of $10.3 million from the changes in deferredcosts of fulfillment, income taxes recoverable, prepaid expenses and deposits and inventory were offset by positive contributions of $9.5 million from movements inaccrued liabilities, deferred revenue, accounts payable, accounts receivable, customer deposits and accreditation fees payable. Cash Flow from Financing Activities
	Net cash inflows from financing activities during the six months ended June 30, 2021 totaled $19.2 million, an increase of 633% when compared to the six
months ended June 30, 2020. Total cash inflows were driven by $18.0 million of proceeds received from drawdown of the Credit Facility, as well as $1.5 million fromproceeds received on exercise of stock options. These cash inflows were partially offset by $0.3 million related to the payment of tax obligations resulting from the netexercise of stock options.

Cash Flow from Investing Activities
	Investing activities during the six months ended June 30, 2021 used net cash of $37.8 million, an increase of 22% when compared to the six months ended June
30, 2020. Cash outflows of $35.6 million related to the investment in property and equipment, primarily to support the continued expansion of our Fiber footprint. TheCompany continues to invest in our existing Ting Towns of Centennial, Colorado, Charlottesville, Virginia, Fuquay-Varina, North Carolina, Wake Forest, North Carolina,Holly Springs, North Carolina, Sandpoint, Idaho, Rolesville, North Carolina and Culver City, California as we seek to extend both our current network and expand to newmarkets. We expect our capital expenditures on building and expanding our fiber network to continue to increase during Fiscal 2021. In addition to investment inproperty and equipment, the current period used $2.0 million for an investment in an unrelated entity, and $0.2 million for the acquisition of other intangible assets.
	Based on our operations, we believe that our cash flow from operations will be adequate to meet our anticipated requirements for working capital, capital
expenditures and our loan repayments for at least the next 12 months.
	We may need additional funds or seek other financing arrangements to facilitate more rapid expansion, develop new or enhance existing products or services,
respond to competitive pressures or acquire or invest in complementary businesses, technologies, services or products. We may also evaluate potential acquisitions ofother businesses, products and technologies. We currently have no commitments or agreements regarding the acquisition of other businesses. If additional financing isrequired, we may need additional equity or debt financing and any additional financing may be dilutive to existing investors. We may not be able to raise funds onacceptable terms, or at all. Off Balance Sheet Arrangements
	As of June 30, 2021 we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
Contractual Obligations
	In our 2020 Annual Report, we disclosed our contractual obligations. As of June 30, 2021, other than the items mentioned above, there have been no other
material changes to those contractual obligations outside the ordinary course of business.
		42

Table of Contents ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	We develop products in Canada and sell these services in North America and Europe. Our sales are primarily made in U.S. dollars, while a major portion of
expenses are incurred in Canadian dollars. Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economicconditions in foreign markets. Our interest income is sensitive to changes in the general level of Canadian and U.S. interest rates, particularly since the majority of ourinvestments are in short-term instruments. Based on the nature of our short-term investments, we have concluded that there is no material interest rate risk exposure asof June 30, 2021.
	We are also subject to market risk exposure related to changes in interest rates under our Amended 2019 Credit Facility. In an effort to mitigate a portion of our
market risk exposure the Company has entered into a pay-fixed, receive-variable interest rate swap with a Canadian chartered bank to limit the potential interest ratefluctuations incurred on its future cash flows related to variable interest payments on the Amended 2019 Credit facility. The notional value of the swap at June 30, 2021is $70 million, consistent with December 31, 2020.

	We do not expect that any changes in interest rates will be material through Fiscal 2021; however, fluctuations in interest rates are beyond our control. We will
continue to monitor and assess the risks associated with interest expense exposure and may take additional actions in the future to mitigate these risks.
	Although our functional currency is the U.S. dollar, a substantial portion of our fixed expenses are incurred in Canadian dollars. Our policy with respect to
foreign currency exposure is to manage financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some of the impact of foreigncurrency exchange movements. Exchange rates are, however, subject to significant and rapid fluctuations, and therefore we cannot predict the prospective impact ofexchange rate fluctuations on our business, results of operations and financial condition. Accordingly, we have entered into foreign exchange forward contracts tomitigate the exchange rate risk on portions of our Canadian dollar exposure.
	As of June 30, 2021, we had the following outstanding foreign exchange forward contracts to trade U.S. dollars in exchange for Canada dollars:

			Weighted average
		Notional amount of U.S.	exchange rate of U.S.	Fair value Asset /
	Maturity date (Dollar amounts in thousands of U.S. dollars)		dollars	dollars	(Liability)

	July - September 2021		10,782	1.4361	1,703
		$	10,782	1.4361 $	1,703

	As of June 30, 2021, the Company had $10.8 million of outstanding foreign exchange forward contracts which will convert to $15.5 million Canadian dollars. Of
these contracts, $9.2 million met the requirements for hedge accounting. As of December 31, 2020, the Company held contracts in the amount of $31.8 million to tradeU.S. dollars in exchange for $45.5 million Canadian dollars. Of these contracts, $26.8 million met the requirements for hedge accounting.
	We have performed a sensitivity analysis model for foreign exchange exposure over the three months ended June 30, 2021. The analysis used a modeling
technique that compares the U.S. dollar equivalent of all expenses incurred in Canadian dollars, at the actual exchange rate, to a hypothetical 10% adverse movement inthe foreign currency exchange rates against the U.S. dollar, with all other variables held constant. Foreign currency exchange rates used were based on the market ratesin effect during the three months ended June 30, 2021. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rateswould result in a decrease in net income for the three months ended June 30, 2021 of approximately $1.4 million, before the effects of hedging. Fluctuations of exchangerates are beyond our control. We will continue to monitor and assess the risk associated with these exposures and may take additional actions in the future to hedge ormitigate these risks. Credit Risk
	Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, foreign exchange
contracts and accounts receivable. Our cash, cash equivalents and short-term investments are in high-quality securities placed with major banks and financialinstitutions whom we have evaluated as highly creditworthy and commercial paper. Similarly, we enter into our foreign exchange contracts with major banks and financialinstitutions. With respect to accounts receivable, we perform ongoing evaluations of our customers, generally granting uncollateralized credit terms to our customers,and maintaining an allowance for doubtful accounts based on historical experience and our expectation of future losses.
		43

Table of Contents Interest rate risk
	Our exposure to interest rate fluctuations relate primarily to our Amended 2019 Credit Facility. As of June 30, 2021, we had an outstanding balance of $140.4 million on the Amended 2019 Credit Facility. The Amended 2019 Credit Facility bears a base
interest rate based on borrowing elections by the Company with a marginal rate calculated as a function of the Company's total Funded Debt to EBITDA plus the LIBORrate. In May 2020, the Company entered into a pay-fixed, receive-variable interest rate swap with a Canadian chartered bank to limit the potential interest ratefluctuations incurred on its future cash flows related to the variable interest payments on the Credit facility. The notional value of the interest rate swap was $70 millionas of June 30, 2021, consistent with December 31, 2020. The Company does not use the interest rate swap for trading or speculative purposes. The contract iscoterminous with the Credit facility, maturing in June 2023. As of June 30, 2021, an adverse change of one percent on the interest rate would have the effect of increasingour annual interest payment on Amended 2019 Credit Facility by approximately $0.7 million, after the effects of hedging, assuming that the loan balance as of June 30,2021 is outstanding for the entire period.
	The Company is currently charged interest and standby fees based on LIBOR, a key global reference interest rate. These interest and standby fees are partially
hedged by interest rate swaps held by the Company, which are also based on LIBOR. Currently, LIBOR’s regulator and administrators are seeking to discontinue thepublication of LIBOR. Global markets working groups around the World continue to search and recommend an alternative reference rate for LIBOR. In the U.S, theAlternative Reference Rates Committee has identified the Secured Overnight Financing Rate as its preferred alternative rate for USD LIBOR, however work continuesacross all jurisdictions to evaluate alternatives and establish transition plans and timelines. Both the credit facility agreement and the interest rate swaps will need to beamended when an alternative reference rate is chosen, at which time we may adopt some of the practical expedients provided by ASU 2020-04. As mentioned above, theCompany has assessed which existing contracts reference LIBOR and we will continue to monitor the situation and recommendations for an alternative reference rate asthey become available. Additionally, the Company will continue proactive discussions and renegotiations with counterparties around the reference rate change asappropriate. Item 4. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), management, with the participation of our Chief Executive Officer and ChiefFinancial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures as defined in Exchange ActRule 13a-15(e). Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance ofachieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Ourdisclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives. Based on the evaluation of our disclosurecontrols and procedures as of the end of the period covered by this quarterly report, our Chief Executive Officer and Chief Financial Officer concluded that, as of June30, 2021 our disclosure controls and procedures were effective at the reasonable assurance level. (b) Changes in Internal Control over Financial Reporting There were no changes made in our internal controls over financial reporting during the three months ended June 30, 2021 that have materially affected, or arereasonably likely to materially affect, our internal control over financial reporting.
		44

Table of Contents
	PART II.
		OTHER INFORMATION

Item 1. Legal Proceedings We are involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, individually or in the aggregate, in ouropinion, will materially harm our business. We cannot assure that we will prevail in any litigation. Regardless of the outcome, any litigation may require us to incursignificant litigation expense and may result in significant diversion of our attention. Item 1A. Risk Factors Not applicable.
	45

Table of Contents Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company's $40 million buyback program (the "2020 Buyback Program") which commenced on February 13, 2020, terminated on February 12, 2021. On February 9,2021, the Company announced that its Board approved a stock buyback program (the "2021 Buyback Program") to repurchase up to $40 million of its common stock inthe open market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 10,2021 and will terminate on or before February 9, 2022. For the three and six months ended June 30, 2021, the Company did not repurchase shares under the 2020Buyback Program or the 2021 Buyback Program.

Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information None.
	46

Table of Contents Item 6. Exhibits
No.	Description

	Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows’ Current Report onForm 8-K, as filed with the SEC on November 29, 2007).
3.1.1
	Articles of Amendment to Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed withTucows’ Current Report on Form 8-K, as filed with the SEC on January 3, 2014).
3.1.2
	Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.2 filed with Tucows’ Annual Report on Form 10-K forthe year ended December 31, 2006, as filed with the SEC on March 29, 2007).
3.2
	Amendment No. 1 to Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by Reference to Exhibit 3.3 filed with Tucows’ QuarterlyReport on Form 10-Q for the quarter ended June 30, 2012).
3.3
31.1#	Chief Executive Officer's Rule 13a-14(a)/15d-14(a) Certification
31.2#	Chief Financial Officer's Rule 13a-14(a)/15d-14(a) Certification
32.1†	Chief Executive Officer's Section 1350 Certification †
32.2†	Chief Financial Officer's Section 1350 Certification †
	Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within theInline XBRL document)
101.INS#
101.SCH#	Inline XBRL Taxonomy Extension Schema Document
101.CAL#	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF#	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB#	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE#	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104#	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

#	Filed herewith.
†	Furnished herewith.

		47

Table of Contents
	SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersignedthereunto duly authorized.

Date: August 5, 2021		TUCOWS INC.

		By: /s/ ELLIOT NOSS
			Elliot Noss
			President and Chief Executive Officer

		By: /s/ DAVINDER SINGH
		Davinder SinghChief Financial Officer

			(Principal Financial and Accounting Officer)

	48

Exhibit 31.1

		Rule 13a-14(a)/15d-14(a) Certification

	I, Elliot Noss, certify that:
	1.
			I have reviewed this Quarterly Report on Form 10-Q of Tucows Inc.;
	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.		The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:
			a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;
			b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;
			c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
			d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5.		The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
			a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likelyto adversely affect the registrant's ability to record, process, summarize and report financial information; and
			b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control overfinancial reporting.
	Date August 5, 2021/s/ Elliot Noss
				Elliot Noss
				President and Chief Executive Officer

Exhibit 31.2

		Rule 13a-14(a)/15d-14(a) Certification

	I, Davinder Singh, certify that:
	1.
			I have reviewed this Quarterly Report on Form 10-Q of Tucows Inc.;
	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.		The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:
			a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;
			b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;
			c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
			d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5.		The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
			a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likelyto adversely affect the registrant's ability to record, process, summarize and report financial information; and
			b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control overfinancial reporting.

	Date August 5, 2021/s/ Davinder Singh
				Davinder Singh
				Chief Financial Officer

Exhibit 32.1

		CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

			In connection with the Quarterly Report of Tucows Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and
	Exchange Commission on the date hereof (the “Report”), I, Elliot Noss, President and Chief Executive Officer of the Company, hereby certify, to my knowledge,pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

			(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

			(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.


			Date: August 5, 2021			/s/ Elliot Noss
					Elliot Noss
					President and Chief Executive Officer

Exhibit 32.2

		CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

			In connection with the Quarterly Report of Tucows Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and
	Exchange Commission on the date hereof (the “Report”), I, Davinder Singh, Chief Financial Officer of the Company, hereby certify, to my knowledge, pursuant to 18U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

			(3)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

			(4)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.


			Date: August 5, 2021			/s/ Davinder Singh
					Davinder Singh
					Chief Financial Officer