Revenue Recognition

3 Months Ended

Oct. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 3—Revenue Recognition

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications and payment offerings as well as wholesale international voice and SMS termination. BOSS Money, NRS, and net2phone are technology-driven, synergistic businesses that leverage the Company’s core assets. BOSS Money’s and NRS’ revenues are primarily recognized at a point in time, and net2phone’s revenue is mainly recognized over time. Traditional Communications are mostly minute-based, paid-voice communications services, and revenue is primarily recognized at a point in time. The Company’s most significant revenue streams are from IDT Digital Payments, BOSS Revolution Calling, and IDT Global. IDT Digital Payments and BOSS Revolution Calling are sold direct-to-consumer and through distributors and retailers.

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:

	Three Months Ended October 31,
	2023		2022
	(in thousands)
National Retail Solutions	$	23,995	$	19,313
BOSS Money		24,239		17,554
Other		2,324		2,333
Total Fintech		26,563		19,887
net2phone		19,927		16,950
IDT Digital Payments		99,986		109,048
BOSS Revolution Calling		71,222		86,253
IDT Global		52,034		61,611
Other		7,478		8,754
Total Traditional Communications		230,720		265,666
Total	$	301,205	$	321,816

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location:

(in thousands)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Total
Three Months Ended October 31, 2023
United States	$	23,995	$	25,834	$	10,688	$	162,998	$	223,515
Outside the United States:
United Kingdom		—		—		—		58,843		58,843
Other		—		729		9,239		8,879		18,847
Total outside the United States		—		729		9,239		67,722		77,690
Total	$	23,995	$	26,563	$	19,927	$	230,720	$	301,205

(in thousands)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Total
Three Months Ended October 31, 2022
United States	$	19,313	$	19,255	$	8,802	$	184,838	$	232,208
Outside the United States:
United Kingdom		—		—		—		68,940		68,940
Other		—		632		8,148		11,888		20,668
Total outside the United States		—		632		8,148		80,828		89,608
Total	$	19,313	$	19,887	$	16,950	$	265,666	$	321,816

Remaining Performance Obligations

The following table includes revenue by business segment expected to be recognized in the future from performance obligations that were unsatisfied or partially unsatisfied as of October 31, 2023. The table excludes contracts that had an original expected duration of one year or less.

(in thousands)	National Retail Solutions		net2phone		Total
Twelve-month period ending October 31:
2024	$	5,740	$	38,430	$	44,170
2025		4,767		19,092		23,859
Thereafter		4,682		6,718		11,400
Total	$	15,189	$	64,240	$	79,429

Accounts Receivable and Contract Balances

The timing of revenue recognition may differ from the time of billing to the Company’s customers. Trade accounts receivable in the Company’s consolidated balance sheets represent unconditional rights to consideration. The Company would record a contract asset when revenue is recognized in advance of its right to bill and receive consideration. The Company has not currently identified any contract assets.

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The Company’s contract liability balance is primarily payments received for prepaid BOSS Revolution Calling. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company’s consolidated balance sheets as “Deferred revenue”.

The following table presents information about the Company’s contract liability balance:

	Three Months Ended October 31,
	2023		2022
	(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period	$	16,089	$	17,906

Deferred Customer Contract Acquisition and Fulfillment Costs

The Company recognizes as an asset its incremental costs of obtaining a contract with a customer that it expects to recover. The Company’s incremental costs of obtaining a contract with a customer are sales commissions paid to employees and third parties on sales to end users. If the amortization period were one year or less for the asset that would be recognized from deferring these costs, the Company applies the practical expedient whereby the Company charges these costs to expense when incurred. For net2phone sales, the Company defers these costs and amortizes them over the expected customer relationship period when it is expected to exceed one year.

The Company’s costs to fulfill its contracts do not meet the criteria to be recognized as an asset, therefore these costs are charged to expense as incurred.

The Company’s deferred customer contract acquisition costs were as follows:

	October 31, 2023		July 31, 2023
	(in thousands)
Deferred customer contract acquisition costs included in “Other current assets”	$	4,180	$	4,460
Deferred customer contract acquisition costs included in “Other assets”		3,744		3,734
Total	$	7,924	$	8,194

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:

	Three Months Ended October 31,
	2023		2022
	(in thousands)
Amortization of deferred customer contract acquisition costs	$	1,215	$	1,176