IDT(US:IDT)2022-12-12 16:00Financial Performance - Fintech segment revenues increased to $19.9 million for the three months ended October 31, 2022, up 39.8% from $14.2 million in the same period in 2021[129]. - BOSS Money revenues rose to $17.6 million, a 45.1% increase from $12.1 million year-over-year, driven by increased transaction volume and new platform functionalities[129][130]. - Total revenues for the three months ended October 31, 2022, increased to $19.3 million, a 91.7% increase from $10.1 million in the same period of 2021[136]. - Recurring revenues reached $17.8 million, up 107.2% from $8.6 million year-over-year[136]. - Income from operations for the Fintech segment improved to $1.5 million, a significant turnaround from a loss of $1.6 million in the same quarter last year, marking a 194.8% increase[129][128]. - Income from operations increased to $20.2 million for the three months ended October 31, 2022, up 46.9% from $13.8 million in the same period of 2021[166]. - Net income attributable to IDT Corporation was $11.0 million for the three months ended October 31, 2022, compared to a net loss of $2.5 million in the same period of 2021, representing a change of 544.0%[167]. Expenses and Costs - Direct costs of revenues for the Fintech segment increased to $8.3 million, reflecting a 39.1% rise from $6.0 million in the prior year[129][131]. - Selling, general and administrative expenses increased to $11.1 million, but as a percentage of Fintech's revenue, it decreased to 55.7% from 65.5% year-over-year[129][132]. - Selling, general and administrative expenses as a percentage of revenue decreased to 60.2% from 71.0% year-over-year[138]. - Direct costs of revenues for Traditional Communications decreased by 22.4% to $218.6 million, reflecting the overall revenue decline[149]. - Corporate general and administrative expenses decreased by 5.4% to $1.9 million, primarily due to reduced employee compensation[161]. - Total other expense, net, was $3.8 million for the three months ended October 31, 2022, compared to $16.2 million in the same period of 2021, reflecting a significant reduction[169]. Operational Metrics - Active POS terminals grew to 20.7 thousand, representing a 37% increase from 15.1 thousand in the previous year[136]. - Payment processing accounts increased by 66%, reaching 11.3 thousand compared to 6.8 thousand in the prior year[136]. - National Retail Solutions (NRS) segment represented 6.0% of total revenues in Q3 2022, up from 2.7% in Q3 2021, indicating growth in its payment processing and digital advertising services[135]. Cash and Investments - Cash and cash equivalents, along with debt securities and current equity investments, totaled $137.1 million as of October 31, 2022[173]. - The company expects cash from operations and current investments to meet working capital needs through October 31, 2023, despite uncertainties related to COVID-19[121]. - The company expects cash from operations and existing cash reserves to be sufficient to meet working capital and capital expenditure requirements for the twelve-month period ending October 31, 2023[172]. - The company repurchased 203,436 shares of Class B common stock for an aggregate purchase price of $5.0 million during the three months ended October 31, 2022[191]. - In the three months ended October 31, 2022, the company repurchased 13,403 shares of Class B common stock for $0.3 million, compared to 627 shares for $26,000 in the same period of 2021[192]. Future Outlook and Strategic Initiatives - The company plans to adopt new accounting standards related to credit losses on August 1, 2023, but does not expect a material impact on financial statements[115]. - The company is considering spin-offs and other potential dispositions of certain subsidiaries, although there is no assurance that any transactions will be completed[194]. - The company intends to make strategic investments and acquisitions to expand and diversify its business portfolio, but cannot guarantee successful acquisition opportunities[195]. - The company continues to monitor the impacts of COVID-19 on its operations, with mixed financial effects observed across different segments[119]. Debt and Financing - IDT Telecom has a revolving credit facility of up to $25.0 million, with no amounts outstanding as of October 31, 2022, and is in compliance with all covenants[193]. - Interest on the revolving credit facility is payable monthly, with principal and accrued interest due on May 16, 2024[193]. - The quarterly unused commitment fee for the revolving credit facility ranges from 30 to 85 basis points, depending on IDT Telecom's leverage ratio[193]. International Operations - Revenues from international operations accounted for 28% of consolidated revenues for both the three months ended October 31, 2022, and 2021[196]. Asset Management - The value of the company's debt and equity securities was $36.1 million as of October 31, 2022, representing 7% of total assets, down from $46.8 million (9% of total assets) as of July 31, 2022[197]. - The company mitigates foreign currency exchange risk by offsetting a portion of non-U.S. Dollar revenues with operating expenses in the same currencies[196]. - The introduction of new functionalities in BOSS Money and its integration into the BOSS Revolution Calling app contributed to revenue growth[130].