Leases

12 Months Ended

Jul. 31, 2023

Leases [Abstract]

Leases

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from less than one year to five years. net2phone also has operating leases for office equipment. Certain of these leases include renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise any of these options.

net2phone is the lessee under equipment leases that are classified as finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

The Company leases office and parking space in a building and parking garage located at 520 Broad St, Newark, New Jersey that was previously owned by the Company’s former subsidiary, Rafael Holdings, Inc. (“Rafael”). On August 22, 2022, Rafael sold the building and parking garage to an unrelated third party. The Company’s lease in that property continues with the new owner. The Company leases office space in Israel from Rafael. Howard S. Jonas, the Chairman of the Company (an executive officer position) and the Chairman of the Company’s Board of Directors, is also the Chairman of the Board of Directors and Executive Chairman of Rafael. The Newark lease expires in April 2025 and the Israel lease expires in July 2025. In fiscal 2023, fiscal 2022, and fiscal 2021, the Company incurred lease costs in connection with the Rafael leases of $0.3 million (which excludes Newark lease costs after August 22, 2022), $2.0 million, and $1.9 million, respectively. Lease costs incurred in connection with the Rafael leases is included in operating lease cost in the table below.

Supplemental disclosures related to the Company’s operating leases were as follows:

Year ended July 31 (in thousands)	2023		2022		2021
Operating lease cost	$	3,175	$	2,901	$	2,824
Short-term lease cost		1,095		1,348		620
TOTAL LEASE COST	$	4,270	$	4,249	$	3,444
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,262	$	2,857	$	2,779

July 31	2023			2022
Weighted-average remaining lease term-operating leases	2.3 years			2.8 years
Weighted-average discount rate-operating leases		3.7	%		3.0	%

In fiscal 2023, fiscal 2022, and fiscal 2021, the Company obtained right-of-use assets of $1.8 million, $2.2 million, and $0.6 million, respectively, in exchange for new operating lease liabilities.

The Company’s aggregate operating lease liability was as follows:

July 31 (in thousands)	2023		2022
Operating lease liabilities included in “Other current liabilities”	$	2,861	$	2,899
Operating lease liabilities included in noncurrent liabilities		2,881		4,606
TOTAL	$	5,742	$	7,505

Future minimum maturities of operating lease liabilities were as follows:

(in thousands)
Year ending July 31:
2024	$	3,028
2025		2,122
2026		507
2027		304
2028		48
Thereafter		—
Total lease payments		6,009
Less imputed interest		(267	)
Total operating lease liabilities	$	5,742

IDT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)