Tucows 2012 Annual Report Download - page 40

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35
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2012 AS COMPARED TO THE
YEAR ENDED DECEMBER 31, 2011
NET REVENUES
The following table presents our net revenues, by revenue source:
Year ended December 31,
2012 2011
Wholesale
Domain Services $ 87,434,450 $ 76,201,058
Value Added Services 10,586,460 9,268,460
Total Wholesale 98,020,910 85,469,518
Retail 10,740,844 5,263,118
Portfolio 5,965,147 6,332,331
$ 114,726,901 $ 97,064,967
Increase over prior period $ 17,661,934
Increase - percentage 18%
The following table presents our revenues, by revenue source, as a percentage of total revenues:
Year ended December 31,
2012 2011
Wholesale
Domain Services 76% 78%
Value Added Services 10% 10%
Total Wholesale 86% 88%
Retail 9% 5%
Portfolio 5% 7%
100% 100%
Total net revenues for Fiscal 2012 increased by $17.7 million, or 18%, to $114.7 million from $97.1 million for
the fiscal year ended December 31, 2011 (“Fiscal 2011”). Deferred revenue from domain name registrations and other
Internet services at December 31, 2012 increased to $71.0 million from $69.2 million at December 31, 2011. Deferred
revenue has been impacted by the transfer of a significant number of names by certain of our customers from our
registrar accreditation to their own registrar accreditation. This required us to recognize all remaining deferred revenue
associated with the transferred domain names during the current year.
No customer accounted for more than 10% of revenue during Fiscal 2012 and, at December 31, 2012, no
customer accounted more than 10% of accounts receivable. Significant management judgment is required at the time of
recording of revenue to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing
basis, we assess the ability of our customers to make required payments. Based on this assessment, we expect the
carrying amount of our outstanding receivables, net of allowance for doubtful accounts, to be fully collected.
Wholesale
During Fiscal 2012, Wholesale revenue increased by $12.6 million, or 15%, to $98.0 million when compared to
Fiscal 2011, primarily as a result of OpenSRS Domain Service revenue increasing by $11.2 million or 15% to
$87.4 million. These increases resulted primarily from our success in attracting customers with increased transaction
volumes, the impact of the transfer of a significant number of names certain of our customers from our registrar
accreditation to their own registrar accreditation, the contribution from the EPAG acquisition that we completed during
the third quarter of last year and the impact of our passing on the 7% registration fee increase implemented in January
2012 for registration fees paid to certain registries.