EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

 

IDT Corporation Reports Fourth Quarter and Fiscal Year 2024 Results

 

4Q24 YoY revenue growth rates: NRS* +42%; BOSS Money +41%; net2phone* +15%

4Q24 income from operations +68% YoY to $20.1 million; Adjusted EBITDA** +40% to a record $25.2 million

4Q24 GAAP EPS increased YoY to $1.45 from $0.31; Non-GAAP EPS increased to $0.57 from $0.36

 

NEWARK, NJ — October 8, 2024: IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications solutions, today reported results for the fourth quarter and full fiscal year 2024, the three and twelve months ended July 31, 2024.

 

FOURTH QUARTER HIGHLIGHTS

 

(Throughout this release, unless otherwise noted, results for the fourth quarter of fiscal year 2024 (4Q24) are compared to the fourth quarter of fiscal year 2023 (4Q23) and results for FY 2024 are compared to FY 2023. All earnings per share (EPS) and other ‘per share’ results are per diluted share.)

 

  ● Business Highlights:

 

  ○ NRS added 1,800 net new active point-of-sale (POS) terminals, aided by summer seasonal factors, to reach approximately 32,100 at July 31st. Recurring revenue increased 42% to $26.7 million led by a 57% increase in merchant services revenue. Income from operations jumped 252% to $6.0 million, and Adjusted EBITDA increased 195% to $7.1 million;
     
  ○ BOSS Money increased remittance transactions by 42% to 5.4 million and revenue by 41% to $31.5 million;
     
  ○ net2phone added approximately 12,000 net seats served, to reach approximately 396,000 seats at July 31st. Subscription revenue increased 15% to $20.5 million;

 

  ● IDT Consolidated:

 

  ○ Revenue increased 2% to $308.8 million driven by revenue growth at NRS, BOSS Money, net2phone and IDT Digital Payments.
     
  ○ Gross profit increased 13% to $102.2 million and gross profit margin increased 320 bps to 33.1% - both record levels, driven by the rapid expansion of IDT’s high-margin businesses;
     
  ○ Income from operations increased 68% to $20.1 million;
     
  ○ Net income attributable to IDT increased 362% to $36.8 million from $8.0 million, including the positive impact of an income tax benefit in 4Q24 of $23.6 million;
     
  ○ GAAP EPS increased to $1.45 from $0.31;
     
  ○ Non-GAAP EPS** increased to $0.57 from $0.36;
     
  ○ Consolidated Adjusted EBITDA increased 40% to $25.2 million, the highest level of quarterly Adjusted EBITDA in IDT’s history;
     
  ○ Repurchased 94,314 shares of IDT Class B common stock in market transactions for $3.4 million.

 

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FISCAL YEAR 2024 HIGHLIGHTS

 

  ● Business Highlights:

 

  ○ NRS added approximately 6,400 net new active terminals and increased recurring revenue 36% to $96.9 million. Income from operations increased 50% to $21.6 million and Adjusted EBITDA increased 49% to $25.0 million;
     
  ○ BOSS Money increased transaction volume 41% to 18.34 million and increased revenue 41% to $108.3 million;
     
  ○ net2phone increased subscription revenue 17% to $78.4 million;

 

  ● IDT Consolidated:

 

  ○ Revenue decreased 3% to $1,205.8 million due to declines in IDT’s Traditional Communications segment revenues that were in line with expectations;
     
  ○ Gross profit increased 9% to $390.2 million and gross profit margin increased 360 bps to 32.4%, both all-time, full fiscal year record levels;
     
  ○ Income from operations increased 7% to $64.8 million;
     
  ○ Net income attributable to IDT increased 59% to $64.5 million, including the positive impact of an income tax benefit of $23.6 million;
     
  ○ GAAP EPS increased to $2.54 from $1.58;
     
  ○ Non-GAAP EPS increased to $1.95 from $1.86;
     
  ○ Adjusted EBITDA increased 4% to $89.7 million, the highest level in IDT’s history;
     
  ○ Repurchased 298,421 shares of IDT Class B common stock in market transactions for $9.1 million.

 

REMARKS BY SHMUEL JONAS, CEO

 

“IDT delivered a strong fourth quarter highlighted by record Adjusted EBITDA to cap off our 2024 fiscal year. NRS, BOSS Money and net2phone all performed well, while our Traditional Communications segment businesses delivered solid cash flows.

 

“At NRS, we continued to make good progress on our strategic priorities - expanding our customer base in the large independent retailer market, increasing the penetration of NRS Pay, developing point of sale solutions for new verticals, building out our advertising tech and deploying hundreds of screens in new locations outside of our independent retail market – all while significantly increasing profitability.

 

“At BOSS Money, we again achieved year-over-year transaction volume and revenue growth of over 40% during the fourth quarter. BOSS Money’s economics continue to improve as the business scales, which enabled our Fintech segment to achieve its first quarter of positive cash-flow generation.

 

“net2phone is steadily building its customer base - again adding approximately twelve thousand net new seats including two thousand CCaaS seats in the fourth quarter– while also doing a good job of controlling costs. As a result, net2phone’s Adjusted EBTIDA margin more than doubled compared to the year ago quarter. We are focused on further improving net2phone’s bottom line through continued volume growth and increasing revenue per user – driven by expansion of our higher-revenue, higher-margin CCaaS offering and by migrating customers to premium plans and features, including plans with new AI-powered functionalities.

 

“In our Traditional Communications segment, we significantly improved the economics of our business, and began to see the expected payoff from cost reduction initiatives we implemented throughout fiscal year 2024. In fiscal 2025, we will continue to pursue opportunities to improve the performance of our business and lower costs while maximizing cash-flows and reinvesting in customer acquisition.

 

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“IDT enters fiscal 2025 with strong momentum. NRS, BOSS Money and ne2phone are all profitable and each has a long growth runway. In the year ahead, we will drive their continued expansion and invest in new, exciting growth initiatives that leverage our strategic assets and expertise.

 

“We remain committed to maximizing the cash generation from each of our segments, building dynamic businesses for long term value creation, and returning value to our stockholders through our investments in new initiatives, share buybacks and dividends.”

 

CONSOLIDATED RESULTS

 

IDT Consolidated Results

($ in millions, except gross profit margin and EPS)

 

   4Q24   4Q23  

4Q24-4Q23 (% Δ)

   FY24   FY23   FY24-FY23 (% Δ) 
Revenue  $308.8   $303.88    +1.7 %  $1,205.8   $1,238.9    (2.7)%
Gross profit  $102.2   $90.7    +12.7 %  $390.2   $357.2    +9.2%
Gross profit margin   33.1%   29.9%   +320 bps    32.4%   28.8%   +360 bps 
Technology & development  $12.6   $12.1    +3.8 %  $50.6   $48.0    +5.3%
SG&A  $69.5   $65.7    +5.8 %  $270.2   $243.2    +11.1%
Income from operations  $20.1   $12.0    +68.4 %  $64.8   $60.7    +6.6%
Net income attributable to IDT  $42.0   $8.0    +426.3 %  $69.6   $40.5    +71.9%
Adjusted EBITDA  $25.2   $18.1    +39.5%  $89.7   $86.2    +4.1%
GAAP EPS (diluted)  $1.45   $0.31    +$1.14   $2.54   $1.58    +$0.96 
Non-GAAP EPS (diluted)  $0.57   $0.36    +$0.21   $1.95   $1.86    +$0.09 

 

FOURTH QUARTER & FISCAL YEAR 2024 RESULTS BY SEGMENT

 

Fiscal Quarters

  NRS   Fintech   net2phone   Traditional Communications 
(in millions)  4Q24   4Q23   (%Δ)   4Q24   4Q23   (%Δ)   4Q24   4Q23   (%Δ)   4Q24   4Q23   (%Δ) 
Revenue  $28.2   $19.9    +42%  $34.6   $24.6    +41%  $21.4   $19.3    +11%  $224.6   $240.0    (6)%
Direct cost of revenue  $2.1   $2.7    (22)%  $15.5   $11.0    +41 %  $4.5   $4.0    +12%  $184.5   $195.4    (6)%
Gross profit  $26.1   $17.2    +52 %  $19.1   $13.6    +40 %  $16.8   $15.2    +11%  $40.1   $44.7    (10)%
Gross profit margin   92.6%   86.6%   +600 bps    55.2%   55.3%   (10) bps    78.8%   79.0%   (20) bps    17.9%   18.6%   (70) bps 
Technology & development  $1.8   $1.5    +19 %  $2.4   $2.0    +23 %  $2.8   $2.5    +11%  $5.5   $6.1    (10)%
SG&A expense  $18.2   $14.0    +29 %  $15.9   $13.6    +17 %  $13.1   $13.2    (1)%  $20.2   $22.3    (10)%
Income (loss) from operations  $6.0   $1.7    +252 %  $2.5   $(1.9)   na   $0.8   $(0.7)   na   $13.9   $14.1    (1)%
Adjusted EBITDA  $7.1   $2.4    +195 %  $1.5   $(1.2)   na   $2.5   $0.9    +170%  $16.3   $18.6    (12)%

 

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Fiscal Years		  NRS   Fintech   net2phone   Traditional Communications 

(in millions)

  FY24   FY23   (%Δ)   FY24   FY23   (%Δ)   FY24   FY23   (%Δ)   FY24   FY23   (%Δ) 
Revenue  $103.1   $77.1    +34 %  $120.7   $86.6    +39%  $82.3   $72.4    +14 %  $899.6   $1,002.7   $    (10)%
Direct cost of revenue  $11.6   $10.7    +8 %  $53.4   $36.6    +46 %  $17.2   $15.3    +13 %  $733.4   $819.0    (11)%
Gross profit  $91.5   $66.4    +38 %  $67.3   $50.0    +35 %  $65.1   $57.1    +14 %  $166.2   $183.7    (10)%
Gross profit margin   88.7%   86.1%   +260 bps    55.8%   57.7%   (190) pbs    79.1%   78.9%   +20 bps    18.5%   18.3%   +20 bps 
Technology & development  $7.1   $5.0    +43 %  $9.5   $7.3    +31 %  $10.8   $10.0    +8 %  $23.2   $25.8    (10)%
SG&A expense  $62.7   $47.0    +33 %  $59.6   $47.2    +26 %  $52.6   $49.7    +6 %  $84.9   $89.9    (6)%
Income (loss) from operations  $21.6   $14.4    +50 %  $(0.1)  $(2.5)   na   $1.7   $(2.8)   na   $56.4   $61.3    (8)%
Adjusted EBITDA  $25.0   $16.8    +49 %  $1.1   $(1.8)   na   $7.9   $3.0    +158 %  $66.3   $77.5    (14)%

 

National Retail Solutions (NRS)

 

During 4Q24 and 4Q23, the NRS segment contributed 9.1% and 6.6% of IDT’s consolidated revenue, respectively. For FY 2024 and FY 2023, the corresponding contributions were 8.6% and 6.2%, respectively.

 

National Retail Solutions (NRS)

(Terminals and accounts at end of period. $ in millions, except for revenue per terminal)

 

   4Q24   3Q24   4Q23   4Q24-4Q23 (% Δ)   FY24   FY23  

FY24-FY23

(% Δ)

 
Terminals and payment processing accounts                            
Active POS terminals   32,100    30,300    25,700    +25%               
Payment processing accounts   21,300    19,500    15,800    +35%               
                                    
Recurring revenue                                   
Merchant Services & Other  $16.2   $14.4   $10.3    +57%  $54.5   $32.8    +66%
Advertising and Data  $7.4   $6.7   $6.2    +19%  $31.2   $30.6    +2 %
SaaS Fees  $3.1   $2.9   $2.3    +34%  $11.2   $8.0    +39 %
Total recurring revenue  $26.7   $24.0   $18.8    +42%  $96.9   $71.4    +36 %
POS Terminal Sales  $1.6   $1.8   $1.1    +41%  $6.3   $5.7    +10 %
Total revenue  $28.2   $25.7   $19.9    +42 %  $103.1   $77.1    +34 %
                                    
Monthly average recurring revenue per terminal*  $285   $271   $253    +13%   $279   $264    +6%
                                    
Gross profit  $26.1   $22.1   $17.2    +52%  $91.5   $66.4    +38%
Gross profit margin   93%   86%   87%   +600 bps    89%   86%   +260 bps 
Technology & development  $1.8   $1.7   $1.5    +19%  $7.1   $5.0    +43%
SG&A  $18.2   $15.7   $14.0    +29%  $62.7   $47.0    +33%
Income from operations  $6.0   $4.8   $1.7    +252%  $21.6   $14.4    +50%
Adjusted EBITDA  $7.1   $5.6   $2.4    +195%  $25.0   $16.8    +49%

 

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NRS Take-Aways / Updates:

 

● During 4Q24, NRS added approximately 1,800 net active terminals – inclusive of the addition of several hundred terminals at summer seasonal businesses. During FY 2024, NRS added approximately 6,400 net active terminals.
   
● During 4Q24, NRS added approximately 1,900 net payment processing accounts, also inclusive of seasonal businesses. During FY 2024, NRS added approximately 5,600 net payment processing accounts.
   
● The increase in Merchant Services & Other revenue (+57% in 4Q24, +66% in FY 2024) was driven by the increase in NRS Pay accounts and a robust increase in average revenue per NRS pay account.

 

Fintech

 

During 4Q24 and 4Q23, the Fintech segment contributed 11.2% and 8.1% of IDT’s consolidated revenue, respectively. For FY 2024 and FY 2023, the corresponding contributions were 10.0% and 7.0%, respectively.

 

Fintech

(Transactions in millions. $ in millions except for revenue per transaction)

   4Q24   3Q24   4Q23   4Q24-4Q23 (% Δ, $)   FY24   FY23  

FY24-FY23

(% Δ, $)

 
BOSS Money Transactions   5.4    4.7    3.8    +42%   18.3    13.0    +41%
                                    
Fintech Revenue                                   
BOSS Money  $31.5   $27.6   $22.3    +41%  $108.3   $76.9    +41%
Other  $3.2   $3.9   $2.3    +37%  $12.4   $9.7    +28%
Total Revenue  $34.6   $31.5   $24.6    +41%  $120.7   $86.6    +39%
                                    
Average revenue per transaction*  $5.84   $5.84   $5.87    (0.7)%  $5.91   $5.93    (0.3)%
                                    
Gross profit  $19.1   $17.3   $13.6    +40%  $67.3   $50.0    +35%
Gross profit margin   55.2%   54.9%   55.3%   (10) bps    55.8%   57.7%   (190) bps 
Technology & development  $2.4   $2.5   $2.0    +23%  $9.5   $7.3    +31%
SG&A  $15.9   $15.3   $13.6    +17%  $59.6   $47.2    +26%
Income (loss) from operations  $2.5   $(0.6)  $(1.9)   +$4.5   $(0.1)  $(2.5)   +$2.4 
Adjusted EBITDA  $1.5   $0.2   $(1.2)   +$2.7   $1.1   $(1.8)   +$2.8  

 

Fintech Take-Aways:

 

● The 42% increase in BOSS Money transactions in 4Q24 included both a 42% increase in digital transactions and a 41% increase in retail transactions, the latter being driven by the expansion of the BOSS Money retail agent network and enhancements to the retailer portal. In FY 2024, transactions increased 41% including a 46% increase in retail transactions and a 40% increase in digital transactions.
   
● BOSS Money revenue increased 41% in both 4Q24 and in FY 2024 driven primarily by cross-marketing within the larger BOSS ecosystem and expansion of the retail agent network.

 

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● Fintech’s income from operations of $2.5 million in 4Q24 included a gain of $1.8 million from the write-off of a contingent consideration payment obligation related to an acquisition in a prior period. Fintech’s loss from operations in FY 2024 and FY 2023 included gains of $1.8 million and $1.6 million, respectively, from the write-off of contingent consideration payment obligations.
   
● Fintech Adjusted EBITDA increased by $2.7 million and $2.8 million in 4Q24 and FY 2024, respectively, driven by BOSS Money revenue growth, combined with improved operating leverage as the business continues to scale.

 

net2phone

 

During 4Q24 and 4Q23, the net2phone segment contributed 6.9% and 6.3% of IDT’s consolidated revenue, respectively. For FY 2024 and FY 2023, the corresponding contributions were 6.8% and 5.8%, respectively.

 

net2phone

(Seats in thousands at end of period. $ in millions)

   4Q24   3Q24   4Q23   4Q24-4Q23 (% Δ, $)   FY24   FY23  

FY24-FY23

(% Δ, $)

 
Seats   396    384    352    +13%               
                                    
Revenue                                   
Subscription revenue  $20.5   $20.0   $17.9    +15 %  $78.4   $66.8    +17 %
Other revenue  $0.9   $0.6   $1.4    (38)%  $4.0   $5.6    (29)%
Total Revenue  $21.4   $20.7   $19.3    +11%  $82.3   $72.4    +14%
                                    
Gross profit  $16.8   $16.4   $15.2    +11%  $65.1   $57.1    +14%
Gross profit margin   78.8%   79.2%   79.0%   (20) bps    79.1%   78.9%   +20 bps 
Technology & development  $2.8   $2.8   $2.5    11%  $10.8   $10.0    +8%
SG&A  $13.1   $13.0   $13.2    (1)%  $52.6   $49.7    +6%
Income (loss) from operations  $0.8   $0.5   $(0.7)   +$1.6   $1.7   $(2.8)   +$4.4 
Adjusted EBITDA  $2.5   $2.1   $0.9    +$1.5   $7.9   $3.0    +$4.8 

 

net2phone Take-Aways:

 

● In 4Q24, net2phone increased seats served by 13% year over year powered by continued expansion in key markets led primarily by the U.S., Brazil, and Mexico.
   
● In 4Q24, subscription revenue increased 15% year-over-year driven by the increase in seats served. Additionally, subscription revenue per seat* increased by 2%.
   
● In FY 2024, subscription revenue increased 17% compared to FY 2023. Subscription revenue per seat increased by 4%.
   
● In 4Q24, net2phone’s operating margin* increased to +4% from (4)% in 4Q23, and Adjusted EBITDA margin* increased to 11% from 5% in 4Q23. In FY 2024, net2phone’s operating margin increased to +2% from (4)% in FY 2023, and Adjusted EBITDA margin increased to 10% from 4% in FY 2023.

 

6

 

 

Traditional Communications

 

During 4Q24 and 4Q23, the Traditional Communications segment contributed 72.7% and 79.0% of IDT’s consolidated revenue, respectively. For FY 2024 and FY 2023, the corresponding contributions were 74.6% and 81.0%, respectively.

 

Traditional Communications

($ in millions)

   4Q24   3Q24   4Q23   4Q24-4Q23 (% Δ)   FY24   FY23  

FY24-FY23

(% Δ)

 
Revenue                                   
IDT Digital Payments  $106.1   $101.6   $100.8    +5%  $407.4   $417.1    (2)%
BOSS Revolution  $62.2   $63.2   $75.4    (18)%  $263.2   $322.1    (18)%
IDT Global  $50.3   $50.1   $55.6    (10)%  $201.1   $230.3    (13)%
Other  $6.0   $6.9   $8.2    (27)%  $27.8   $33.3    (16)%
Total Revenue  $224.6   $221.7   $240.0    (6)%  $899.6   $1,002.7    (10)%
                                    
Gross profit  $40.1   $41.2   $44.7    (10)%  $166.2   $183.7    (10)%
Gross profit margin   17.9%   18.6%   18.6%   (70) bps    18.5%   18.3%   +20 bps 
Technology & development  $5.5   $5.6   $6.1    (10)%  $23.2   $25.8    (10)%
SG&A  $20.2   $22.7   $22.3    (10)%  $84.9   $89.9    (6)%
Income from operations  $13.9   $12.5   $14.1    (1)%  $56.4   $61.3    (8)%
Adjusted EBITDA  $16.3   $14.9   $18.6    (12)%  $66.3   $77.5    (14)%

 

Take-Aways:

 

● The year-over-year and sequential increases in IDT Digital Payments’ 4Q24 revenue largely reflect improved unit economics.
   
● IDT Global substantially mitigated the bottom-line impacts of decreasing revenue through a traffic mix shift to higher margin routes;
   
● The sequential increases in income from operations and Adjusted EBITDA were driven by both improved unit economics at IDT Digital Payments and decreases in SG&A and Technology & Development expenses following significant cost cutting and streamlining initiatives undertaken earlier in FY 2024.

 

OTHER FINANCIAL RESULTS

 

Consolidated results for all periods presented include corporate overhead. Corporate G&A expense was $2.2 million in 4Q24 compared to $2.6 million in 4Q23. In FY 2024, corporate G&A expense totaled $10.5 million compared to $9.3 million a year earlier.

 

As of July 31, 2024, IDT held $193.0 million in cash, cash equivalents, debt securities, and current equity investments. Current assets totaled $422.5 million and current liabilities totaled $279.3 million. IDT had no outstanding debt at the fiscal year end.

 

Net cash provided by operating activities in 4Q24 increased to $28.9 million from $25.4 million in 4Q23. Exclusive of changes in customer deposit balances at IDT’s Gibraltar-based bank, net cash provided by operating activities in 4Q24 increased to $31.9 million compared to $27.1 million in 4Q23.

 

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In FY 2024, net cash provided by operating activities increased to $78.2 million from $54.1 million in FY 2023. Exclusive of changes in customer deposit balances at IDT’s Gibraltar-based bank, net cash provided by operating activities in FY 2024 increased to $81.6 million from $58.3 million in FY 2023.

 

Capital expenditures decreased to $5.3 million in 4Q24 from $5.9 million in 4Q23. Capital expenditures decreased to $18.9 million in FY 2024 from $22.0 million in FY 2023.

 

DIVIDEND

 

IDT paid a quarterly dividend of $0.05 on its Class A and Class B Common stock on October 7th to stockholders of record as of the close of business on September 30th.

 

IDT EARNINGS ANNOUNCEMENT INFORMATION

 

This release is available for download in the “Investors & Media” section of the IDT Corporation website (https://www.idt.net/investors-and-media) and has been filed on a current report (Form 8-K) with the SEC.

 

IDT will host an earnings conference call beginning at 5:30 PM Eastern with management’s discussion of results followed by Q&A with investors. To listen to the call and participate in the Q&A, dial 1-888-506-0062 (toll-free from the US) or 1-973-528-0011 (international) and provide the following access code: 126998).

 

A replay of the conference call will be available approximately three hours after the call concludes through October 22, 2024. To access the call replay, dial 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and provide this replay passcode: 51021. The replay will also be accessible via streaming audio at the IDT investor relations website.

 

NOTES

 

*NRS revenue refers to recurring revenue. net2phone revenue refers to subscription revenue. See ‘Explanation of Key Performance Metrics’ at the end of this release.

 

**Adjusted EBITDA and Non-GAAP EPS are Non-GAAP financial measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measures later in this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measures.

 

ABOUT IDT CORPORATION

 

IDT Corporation (NYSE: IDT) is a global provider of fintech and communications solutions through a portfolio of synergistic businesses: National Retail Solutions (NRS), through its point-of-sale (POS) platform, enables independent retailers to operate more effectively while providing advertisers and marketers with unprecedented reach into underserved consumer markets; BOSS Money facilitates innovative international remittances and fintech payments solutions; net2phone provides enterprises and organizations with intelligently integrated cloud communications and contact center services across channels and devices; IDT Digital Payments and the BOSS Revolution calling service make sharing prepaid products and services and speaking with friends and family around the world convenient and reliable; and, IDT Global and IDT Express enable communications services to provision and manage international voice and SMS messaging.

 

All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.

 

CONTACT

 

IDT Corporation Investor Relations

Bill Ulrey

william.ulrey@idt.net

973-438-3838

 

8

 

 

IDT CORPORATION

CONSOLIDATED BALANCE SHEETS

 

July 31 (in thousands, except per share data)  2024
(Unaudited)		   2023 
ASSETS          
CURRENT ASSETS:          
Cash and cash equivalents  $164,557   $103,637 
Restricted cash and cash equivalents   90,899    95,186 
Debt securities   23,438    42,414 
Equity investments   5,009    6,198 
Trade accounts receivable, net of allowance for credit losses of $6,352 at July 31, 2024 and allowance for doubtful accounts of $5,642 at July 31, 2023   42,215    32,092 
Settlement assets, net of reserve of $1,866 and $1,143 at July 31, 2024 and 2023, respectively   22,186    32,396 
Disbursement prefunding   30,736    30,113 
Prepaid expenses   17,558    16,638 
Other current assets   25,927    28,394 
TOTAL CURRENT ASSETS   422,525    387,068 
Property, plant, and equipment, net   38,652    38,655 
Goodwill   26,288    26,457 
Other intangibles, net   6,285    8,196 
Equity investments   6,518    9,874 
Operating lease right-of-use assets   3,273    5,540 
Deferred income tax assets, net   35,008    24,101 
Other assets   11,546    10,919 
TOTAL ASSETS  $550,095   $510,810 
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY          
CURRENT LIABILITIES:          
Trade accounts payable  $24,773   $22,231 
Accrued expenses   103,176    110,796 
Deferred revenue   30,364    35,343 
Customer deposits   83,003    86,481 
Settlement liabilities   21,654    21,495 
Other current liabilities   16,374    17,761 
TOTAL CURRENT LIABILITIES   279,344    294,107 
Operating lease liabilities   1,533    2,881 
Other liabilities   2,662    3,354 
TOTAL LIABILITIES   283,539    300,342 
Commitments and contingencies          
Redeemable noncontrolling interest   10,901    10,472 
EQUITY:          
IDT Corporation stockholders’ equity:          
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued   —    — 
Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and 1,574 shares outstanding at July 31, 2024 and 2023   33    33 
Class B common stock, $.01 par value; authorized shares—200,000; 28,177 and 27,851 shares issued and 23,684 and 23,699 shares outstanding at July 31, 2024 and 2023, respectively   282    279 
Additional paid-in capital   303,510    301,408 
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,493 and 4,152 shares of Class B common stock at July 31, 2024 and 2023, respectively   (126,080)   (115,461)
Accumulated other comprehensive loss   (18,142)   (17,192)
Retained earnings   86,580    24,662 
Total IDT Corporation stockholders’ equity   246,183    193,729 
Noncontrolling interests   9,472    6,267 
TOTAL EQUITY   255,655    199,996 
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY  $550,095   $510,810 

 

9

 

 

IDT CORPORATION

 

CONSOLIDATED STATEMENTS OF INCOME

 

Year ended July 31
(in thousands, except per share data)		  2024
(Unaudited)		   2023   2022 
REVENUES  $1,205,778   $1,238,854   $1,364,057 
DIRECT COST OF REVENUES   815,621    881,614    1,039,059 
GROSS PROFIT   390,157    357,240    324,998 
OPERATING EXPENSES:               
Selling, general and administrative (i)   270,207    243,159    216,922 
Technology and development (i)   50,554    47,988    47,045 
Severance   1,698    935    116 
Other operating expense, net   2,945    4,415    826 
TOTAL OPERATING EXPENSES   325,404    296,497    264,909 
Income from operations   64,753    60,743    60,089 
Interest income, net   4,769    3,147    146 
Other expense, net   (7,612)   (3,083)   (25,352)
Income before income taxes   61,910    60,807    34,883 
Benefit from (provision for) income taxes   6,354    (16,441)   (5,878)
NET INCOME   68,264    44,366    29,005 
Net income attributable to noncontrolling interests   (3,810)   (3,874)   (1,977)
NET INCOME ATTRIBUTABLE TO IDT CORPORATION  $64,454   $40,492   $27,028 
                
Earnings per share attributable to IDT Corporation common stockholders:               
Basic  $2.55   $1.59   $1.05 
Diluted  $2.54   $1.58   $1.03 
                
Weighted-average number of shares used in calculation of earnings per share:               
Basic   25,241    25,517    25,791 
Diluted   25,398    25,577    26,356 
                
(i) Stock-based compensation included in:               
Selling, general and administrative expense  $7,015   $3,913   $1,871 
Technology and development expense  $382   $605   $59 

 

10

 

 

IDT CORPORATION

 


CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Year ended July 31
(in thousands)		  2024
(Unaudited)		   2023   2022 
OPERATING ACTIVITIES               
Net income  $68,264   $44,366   $29,005 
Adjustments to reconcile net income to net cash provided by operating activities:               
Depreciation and amortization   20,351    20,136    18,115 
Deferred income taxes   (10,907)   12,601    4,801 
Provision for credit losses, doubtful accounts receivable, and reserve for settlement assets   4,390    2,198    2,330 
Net unrealized loss from marketable securities   1,435    3,368    18,960 
Stock-based compensation   7,397    4,518    1,930 
Other   3,144    3,175    3,379 
Changes in assets and liabilities:               
Trade accounts receivable   (12,701)   4,726    (8,279)
Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets   12,735    (17,503)   (21,046)
Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities   (7,459)   (17,216)   (1,110)
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)   (3,442)   (4,200)   (15,966)
Deferred revenue   (5,016)   (2,029)   (2,712)
Net cash provided by operating activities   78,191    54,140    29,407 
INVESTING ACTIVITIES               
Capital expenditures   (18,922)   (21,958)   (21,879)
Payments for acquisitions, net of cash acquired   —    —    (7,552)
Purchase of convertible preferred stock in equity method investment   (2,017)   (840)   (1,051)
Purchases of debt securities and equity investments   (29,921)   (59,872)   (24,454)
Proceeds from maturities and sales of debt securities and redemption of equity investments   50,112    49,211    21,157 
Net cash used in investing activities   (748)   (33,459)   (33,779)
FINANCING ACTIVITIES               
Dividends paid   (2,536)   —    — 
Distributions to noncontrolling interests   (112)   (348)   (514)
Proceeds from notes payable   —    300    2,301 
Repayment of notes payable   —    (2,037)   (1,319)
Proceeds from sale of redeemable equity in subsidiary   —    —    10,000 
Proceeds from borrowings under revolving credit facility   32,864    27,383    2,566 
Repayments of borrowings under revolving credit facility   (32,864)   (27,383)   (2,566)
Purchase of restricted shares of net2phone and National Retail Solutions common stock   (4,131)   —    — 
Proceeds from exercise of stock options   172    172    137 
Repurchases of Class B common stock   (10,619)   (13,896)   (26,222)
Net cash used in financing activities   (17,226)   (15,809)   (15,617)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents   (3,584)   4,389    (17,365)
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents   56,633    9,261    (37,354)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of year   198,823    189,562    226,916 
Cash, cash equivalents, and restricted cash and cash equivalents at end of year  $255,456   $198,823   $189,562 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION               
Cash payments made for interest  $429   $536   $461 
Cash payments made for income taxes  $527   $777   $109 
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES               
Value of the Company’s Class B common stock exchanged for National Retail Solutions shares  $6,696   $—   $— 
Conversion of equity method investment’s secured promissory notes into convertible preferred stock  $—   $4,038   $— 
Shares of the Company’s Class B common stock issued to certain executive officers for bonus payments  $1,494   $615   $— 
Liabilities incurred for acquisitions  $—   $—   $7,849 
Shares of the Company’s Class B common stock issued for business acquisitions  $100   $100   $1,000 
Cashless exercise of stock options in exchange for shares of the Company’s Class B common stock  $—   $—   $14,930 

 

11

 

 

*Explanation of Key Performance Metrics

 

NRS’ recurring revenue is calculated by subtracting NRS’ revenue from POS terminal sales from its revenue in accordance with generally accepted accounting principles in the United States of America (GAAP). NRS’ Monthly Average Recurring Revenue per Terminal is calculated by dividing NRS’ recurring revenue by the average number of active POS terminals during the period. The average number of active POS terminals is calculated by adding the beginning and ending number of active POS terminals during the period and dividing by two. NRS’ recurring revenue divided by the average number of active POS terminals is divided by three when the period is a fiscal quarter. Recurring revenue and Monthly Average Recurring Revenue per Terminal are useful for comparisons of NRS’ revenue and revenue per customer to prior periods and to competitors and others in the market, as well as for forecasting future revenue from the customer base.

 

BOSS Money’s Average Revenue per Transaction is calculated by dividing BOSS Money’s revenue in accordance with GAAP by the number of transactions during the period. Average Revenue per Transaction is useful for comparisons of BOSS Money’s revenue per transaction to prior periods and to competitors and others in the market, as well as for forecasting future revenue based on transaction trends.

 

net2phone’s subscription revenue is calculated by subtracting net2phone’s equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil from its revenue in accordance with GAAP. net2phone’s cloud communications and contact center offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. The number of seats served and subscription revenue trends and comparisons between periods are used in the analysis of net2phone’s revenues and direct cost of revenues and are strong indications of the top-line growth and performance of the business.

 

net2phone’s subscription revenue per seat is calculated by dividing net2phone’s subscription revenue, as defined in the preceding paragraph, by the average number of seats served during the period. The average number of seats served is calculated by adding the beginning and ending number of seats served and dividing by two. Subscription revenue per seat is the amount of revenue generated by each seat sold during the period. It provides a basis for pricing seat-based services, as well as for comparing performance in past periods and projecting future revenue, and for comparing the value of each seat served to competitors.

 

net2phone’s operating margin is calculated by dividing GAAP income from operations by GAAP revenue for the period indicated. Operating margin measures the percentage that each dollar of revenue contributes to profitability. Operating margin is useful for evaluating current period profitability relative to sales, for comparisons to prior period performance, for forecasting future income from operations levels based on projected levels of sales, and for comparing net2phone’s relative profitability to its competitors and peers.

 

net2phone’s Adjusted EBITDA margin is calculated by dividing net2phone’s Adjusted EBITDA, a Non-GAAP measure, by net2phone’s GAAP revenue for the comparable quarter or period. Adjusted EBITDA margin measures the percentage that each dollar of revenue contributes to profitability before interest, taxes, depreciation and amortization, and other adjustments as described below in the Reconciliation of Non-GAAP Financial Measures. net2phone’s Adjusted EBITDA margin is useful for evaluating current period profitability relative to sales, for comparisons to prior period performance, for forecasting future Adjusted EBITDA levels based on projected levels of sales, and for comparing net2phone’s relative profitability to its competitors and peers.

 

12

 

 

**Reconciliation of Non-GAAP Financial Measures for the Fourth Quarter and Full Fiscal Years 2024 and 2023

 

In addition to disclosing financial results that are determined in accordance with GAAP, IDT also disclosed for 4Q24, 3Q24, 4Q23, and the full fiscal years 2024 and 2023, Adjusted EBITDA and non-GAAP earnings per diluted share (EPS). Adjusted EBITDA and Non-GAAP EPS are Non-GAAP financial measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. The following explains these terms and their respective reconciliations to the most directly comparable GAAP measures

 

Generally, a non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

 

IDT’s measure of non-GAAP EPS is calculated by dividing non-GAAP net income by the diluted weighted-average shares. IDT’s measure of non-GAAP net income starts with net income attributable to IDT in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expenses, and deducts other operating gains. These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2024 and fiscal 2023 periods.

 

Management believes that IDT’s Adjusted EBITDA and non-GAAP EPS are measures which provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of IDT’s or the relevant segment’s core operating results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses Adjusted EBITDA and non-GAAP EPS to evaluate operating performance in relation to IDT’s competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, IDT has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting.

 

Management refers to Adjusted EBITDA, as well as the GAAP measures income (loss) from operations and net income, on a segment and/or consolidated level to facilitate internal and external comparisons to the segments’ and IDT’s historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.

 

While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or capitalized in prior periods. IDT’s Adjusted EBITDA, which is exclusive of depreciation and amortization, is a useful indicator of its current performance.

 

Severance expense is excluded from the calculation of Adjusted EBITDA and non-GAAP EPS. Severance expense is reflective of decisions made by management in each period regarding the aspects of IDT’s and its segments’ businesses to be focused on in light of changing market realities and other factors. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of IDT’s core and continuing operations.

 

Other operating (expense) gain, net, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA and non-GAAP EPS. Other operating (expense) gain, net includes, among other items, legal fees net of insurance claims related to Straight Path Communications Inc.’s stockholders’ class action, gains from the write-off of contingent consideration liabilities, and expense for the indemnification of a cable telephony customer related to a legal settlement. From time-to-time, IDT may have gains or incur costs related to non-routine legal, tax, and other matters, however, these various items generally do not occur each quarter. IDT believes the gain and losses from these non-routine matters are not components of IDT’s or the relevant segment’s core operating results.

 

13

 

 

Stock-based compensation recognized by IDT and other companies may not be comparable because of the variety of types of awards as well as the various valuation methodologies and subjective assumptions that are permitted under GAAP. Stock-based compensation is excluded from IDT’s calculation of non-GAAP EPS because management believes this allows investors to make more meaningful comparisons of the operating results per share of IDT’s core business with the results of other companies. However, stock-based compensation will continue to be a significant expense for IDT for the foreseeable future and an important part of employees’ compensation that impacts their performance.

 

In 4Q24, because of the completion of an Internal Revenue Code Section 382 study related to net2phone, IDT recorded an income tax benefit of $23.6 million. This income tax benefit was excluded from IDT’s non-GAAP EPS because it is not related to the results of IDT’s core operations.

 

Adjusted EBITDA and non-GAAP EPS should be considered in addition to, not as a substitute for, or superior to, income (loss) from operations, cash flow from operating activities, net income, basic and diluted earnings per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, IDT’s measurements of Adjusted EBITDA and non-GAAP EPS may not be comparable to similarly titled measures reported by other companies.

 

Following are reconciliations of Adjusted EBITDA and non-GAAP EPS to the most directly comparable GAAP measure, which are, (a) for Adjusted EBITDA, income (loss) from operations for IDT’s reportable segments and net income for IDT on a consolidated basis, and (b) for non-GAAP EPS, diluted earnings per share.

 

IDT Corporation

Reconciliation of Net Income to Adjusted EBITDA

(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions

 

   Total IDT Corporation   Traditional Communications   net2phone   NRS   Fintech   Corporate 

Three Months Ended July 31, 2024

(4Q24)

                                             
Net income attributable to IDT Corporation  $36.8                          
Adjustments:                              
Net income attributable to noncontrolling interests   0.9                          
Net income   37.7                          
Benefit from income taxes   (17.3)                         
Income before income taxes   20.4                          
Interest income, net   (1.6)                         
Other expense, net   1.3                          
Income (loss) from operations   20.1   $13.9   $0.8   $6.0   $2.5   $(3.2)
Depreciation and amortization   5.1    1.9    1.6    0.9    0.7    - 
Severance   -    0.3    -    -    -    (0.3)
Other operating (gains) expense, net   (0.1)   0.2    -    0.2    (1.8)   1.3 
Adjusted EBITDA  $25.2   $16.3   $2.5   $7.1   $1.5   $(2.2)

 

14

 

 

   Total IDT Corporation   Traditional Communications   net2phone   NRS   Fintech   Corporate 

Three Months Ended April 30, 2024

(3Q24)

                              
Net income attributable to IDT Corporation  $5.6                          
Adjustments:                              
Net income attributable to noncontrolling interests   0.8                          
Net income   6.3                          
Provision for income taxes   3.0                          
Income before income taxes   9.3                          
Interest income, net   (1.2)                         
Other expense, net   3.3                          
Income (loss) from operations   11.4   $12.5   $0.5   $4.8   $(0.6)  $(5.7)
Depreciation and amortization   5.1    2.0    1.6    0.8    0.7    - 
Severance   0.8    0.4    0.1    -    -    0.3 
Other operating expense, net   3.2    -    -    -    0.1    3.2 
Adjusted EBITDA  $20.6   $14.9   $2.1   $5.6   $0.2   $(2.3)

 

IDT Corporation

Reconciliation of Net Income to Adjusted EBITDA

(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions

 

   Total IDT Corporation   Traditional Communications   net2phone   NRS   Fintech   Corporate 

Three Months Ended July 31, 2023

(4Q23)

                              
Net income attributable to IDT Corporation  $8.0                          
Adjustments:                              
Net income attributable to noncontrolling interests   0.8                          
Net income   8.8                          
Provision for income taxes   3.8                          
Income before income taxes   12.6                          
Interest income, net   (1.1)                         
Other expense, net   0.5                          
Income (loss) from operations   12.0   $14.1   $(0.7)  $1.7   $(1.9)  $(1.2)
Depreciation and amortization   5.1    2.3    1.5    0.7    0.7    - 
Severance   0.5    0.4    0.1    -    -    - 
Other operating expense, net   0.5    1.8    0.1    -    -    (1.4)
Adjusted EBITDA  $18.1   $18.6   $0.9   $2.4   $(1.2)  $(2.6)

 

15

 

 

IDT Corporation

Reconciliation of Net Income to Adjusted EBITDA

(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions

 

   Total IDT Corporation   Traditional Communications   net2phone   NRS   Fintech   Corporate 
Year Ended July 31, 2024 (FY 2024)                              
Net income attributable to IDT Corporation  $64.5                          
Adjustments:                              
Net income attributable to noncontrolling interests   3.8                          
Net income   68.3                          
Benefit from income taxes   (6.4)                         
Income before income taxes   61.9                          
Interest income, net   (4.8)                         
Other expense, net   7.6                          
Income (loss) from operations   64.8   $56.4   $1.7   $21.6   $(0.1)  $(14.9)
Depreciation and amortization   20.4    8.1    6.1    3.2    2.9    0.1 
Severance   1.7    1.6    0.1    -    -    - 
Other operating expense (gains), net   2.9    0.2    (0.1)   0.2    (1.8)   4.4 
Adjusted EBITDA  $89.7   $66.3   $7.9   $25.0   $1.1   $(10.4)

 

   Total IDT Corporation   Traditional Communications   net2phone   NRS   Fintech   Corporate 
Year Ended July 31, 2023 (FY 2023)                                            
Net income attributable to IDT Corporation  $40.5                          
Adjustments:                              
Net income attributable to noncontrolling interests   3.9                          
Net income   44.4                          
Provision for income taxes   16.4                          
Income before income taxes   60.8                          
Interest income, net   (3.1)                         
Other expense, net   3.1                          
Income (loss) from operations   60.7   $61.3   $(2.8)  $14.4   $(2.5)  $(9.7)
Depreciation and amortization   20.1    9.4    5.6    2.4    2.7    0.1 
Severance   0.9    0.9    0.1    -    -    - 
Other operating expense (gain), net   4.4    5.9    0.1    -    (1.9)   0.3 
Adjusted EBITDA  $86.2   $77.5   $3.0   $16.8   $(1.8)  $(9.3)

 

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IDT Corporation

Reconciliation of Earnings per share to Non-GAAP EPS

(unaudited) in millions, except per share data. Figures may not foot due to rounding to millions.

 

   4Q24   3Q24   4Q23   FY 2024   FY 2023 
                          
Net income attributable to IDT Corporation  $36.8   $5.6   $8.0   $64.5   $40.5 
Adjustments (add) subtract:                         
Income tax benefit   23.6    -    -    23.6    - 
Stock-based compensation   (2.0)   (2.1)   (1.0)   (7.4)   (4.5)
Severance expense   (0.1)   (0.8)   (0.5)   (1.7)   (0.9)
Other operating gain (expense), net   0.1    (3.2)   (0.5)   (2.9)   (4.4)
Total adjustments   21.6    (6.1)   (2.0)   11.6    (9.8)
Income tax effect of total adjustments   (0.6)   (2.0)   (0.7)   (3.4)   (2.6)
    (22.2)   4.1    1.3    (15.0)   7.2 
Non-GAAP net income  $14.6   $9.7   $9.3   $49.5   $47.7 
                          
Earnings per share:                         
Basic  $1.46   $0.22   $0.31   $2.55   $1.59 
Total adjustments   (0.88)   0.16    0.06    (0.59)   0.28 
Non-GAAP - basic  $0.58   $0.38   $0.37   $1.96   $1.87 
                          
Weighted-average number of shares used in calculation of basic earnings per share   25.3    25.3    25.4    25.2    25.5 
                          
Diluted  $1.45   $0.22   $0.31   $2.54   $1.58 
Total adjustments   (0.88)   0.16    0.05    (0.59)   0.28 
Non-GAAP - diluted  $0.57   $0.38   $0.36   $1.95   $1.86 
                          
Weighted-average number of shares used in calculation of diluted earnings per share   25.4    25.5    25.5    25.4    25.6 

 

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