Tucows 2015 Annual Report Download - page 73

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 be adversely 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 foreign currency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the
objective of neutralizing some or all of the impact of foreign currency exchange movements by entering into foreign
exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We may not
always enter into such forward contracts and such contracts may not always be available and economical for us.
Additionally, the forward rates established by the contracts may be less advantageous than the market rate upon settlement.
Net Revenues
Network Access Services
Mobile and Other Services
We derive revenue from Ting's sale of retail mobile phones and services to individuals and small businesses
nationally as well as providing fixed high speed internet access in select cities including Westminster, Maryland and
Charlottesville, Virginia along with Internet hosting and network consulting services to customers in Charlottesville,
Virginia. Ting provides customers with access to our provisioning and management tools to enable them, via the ting.com
website, to purchase retail mobile phones and services nationally and fixed Internet access in select cities. Revenues are
generated in the United States and are provided on a monthly basis with no fixed contract term.
Domain Services
Wholesale - OpenSRS Domain Service
Historically, our OpenSRS 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 for which 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 upon their expiration.
We receive revenues for each domain registration or other Internet service processed through our system by
Service Providers. Our domain service revenue is principally comprised of registration fees charged to resellers in
connection with new, renewed and transferred domain name registrations. The registration fee provides our resellers with
access to our provisioning and management tools to enable them to register and administer domain names and access to
additional services like WHOIS privacy and DNS (Domain Name System) services, enhanced domain name suggestion
tools and access to our premium domain names. We earn fees in connection with each new, renewed and transferred-in
registration and from providing provisioning services to resellers and registrars on a monthly basis. Domain registrations
are generally purchased for terms of one to ten years, with a majority having a one-year term. Payments for the full term of
all services, or billed revenue, are received at the time of activation of service and where appropriate are recorded as
deferred revenue and are recognized as earned ratably over the term of provision of service. This accounting treatment
reasonably approximates a recognition pattern that corresponds with the provision of the services during the quarters and
the year.
Wholesale – OpenSRS Value-Added Services
We derive revenue from our hosted email service through our global distribution network. Our hosted email
service is offered on a per account, per month basis, and provides resellers with a reliable, scalable “white label” hosted
email solution that can be customized to their branding and business model requirements. The hosted email service also
includes spam and virus filtering on all accounts. End-users can access the hosted email service via a full-featured, multi-
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