IDT Q3 Earnings Decline Y/Y on Reduced Net Income, Margins Up

Core Viewpoint - IDT Corporation reported a mixed performance in the third quarter of fiscal 2024, with a decline in adjusted earnings per share and net income, despite a slight increase in revenues driven by strong performances in several business segments [1][12][19]. Revenue Performance - IDT registered revenues of $299.6 million in the fiscal third quarter, reflecting a year-over-year increase of 0.1% [3]. - The National Retail Solutions (NRS) segment reported revenues of $25.7 million, up 42.3% from the previous year [5]. - The net2phone segment generated revenues of $20.7 million, marking a 12.4% increase year over year [6]. - The Fintech segment saw revenues of $31.5 million, up 44.7% from the year-ago quarter, driven by significant growth in BOSS Money Transactions [7]. - The Traditional Communications segment's revenues decreased by 8% year over year, totaling $221.7 million [8]. Profitability Metrics - Gross profit increased by 10.8% to $97 million, with gross margin expanding by 313 basis points to 32.4% [9]. - Adjusted operating profit totaled $15.4 million, reflecting a 1% increase from the prior year, with an adjusted operating margin of 5.2% [11]. - Adjusted EBITDA for the quarter was $20.6 million, a slight increase of 0.5% from the previous year [16]. Expenses Overview - Selling, general and administrative expenses rose by 14.7% to $68.9 million, while technology and development expenses increased by 4.1% to $12.6 million [10]. Net Income and Cash Position - Net income attributable to IDT was $5.6 million, down 19.4% from $6.9 million in the prior-year quarter, primarily due to a higher effective income tax rate and foreign currency transaction losses [12]. - The company ended the quarter with cash and cash equivalents of $139.8 million, slightly down from $141.1 million at the end of the previous quarter [13]. Strategic Initiatives - IDT's BOSS Money brand announced significant initiatives to expand its money transfer services, including remittances within the United States, which is expected to enhance growth prospects [15].