IDT(US:IDT)2022-06-03 01:25Financial Data and Key Metrics Changes - For Q3 FY2022, consolidated income from operations decreased by $500,000 to $13.3 million, while adjusted EBITDA increased by $100,000 to $18 million [18][19] - Revenue from the Traditional Communications segment decreased by $59.9 million or 17% to $285.9 million, attributed to a retreat in demand for paid voice services post-COVID [17] Business Line Data and Key Metrics Changes - NRS recurring revenue increased by 102% year-over-year, driven by strong merchant service and advertising sales, with nearly 1,400 net POS terminals and 1,200 net payment processing accounts added in Q3 [11][12] - net2phone's subscription revenue grew by 42% year-over-year, primarily due to the addition of approximately 22,000 seats, including nearly 7,000 from the Integra acquisition [13] - BOSS Money's revenue increased by 51% to $15.5 million, supported by a 27% year-over-year increase in transaction volumes [16] Market Data and Key Metrics Changes - The growth in net2phone was particularly strong in Latin American markets, while the U.S. business also performed well [14] - The Traditional Communications segment faced challenges as demand for paid voice services declined, impacting revenue from retail calling and wholesale carrier services [17] Company Strategy and Development Direction - The company is focusing on scaling three high-margin growth businesses: NRS, net2phone, and BOSS Revolution Money Transfer, while leveraging cash from the Traditional Communication segment [9][10] - The decision to postpone the spin-off of net2phone was made to enhance its value through continued growth and improved net margins [15][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining robust growth for NRS, particularly in advertising and data offerings due to long-term trends and seasonal tailwinds [12] - The company anticipates that as growth businesses expand, consolidated bottom-line results will increasingly reflect their contributions [19] Other Important Information - The company is investing in technology and marketing to improve the performance of its Mobile Top-Up business, which faced challenges this quarter [17] - Management is focused on improving net2phone's bottom line by being more disciplined in customer acquisition and marketing spend [61][62] Q&A Session Summary Question: Growth channels for NRS - Management indicated that growth in NRS is coming from enhanced sales across all segments, not from a single channel [23] Question: Future ARPU for NRS - Management believes ARPU for NRS will increase but did not provide a specific number [24] Question: Sustainability of 1,400 installs per quarter - Management is optimistic about exceeding 1,400 installs per quarter, citing previous equipment shortages as a limiting factor [25] Question: Expansion into new markets for NRS - Management confirmed that while the primary focus remains on traditional markets, there is ongoing expansion into other areas such as quick service restaurants [29] Question: Update on Mobile Top-Up competition - Management acknowledged increased competition in the Mobile Top-Up space but emphasized a focus on both revenue and profitable growth [39] Question: Expansion strategy for NRS services - Management confirmed that expanding services within existing stores is a key part of their strategy [44] Question: New target date for net2phone spin-off - Management stated there is no new target date for the spin-off, focusing instead on improving net2phone's bottom line [43] Question: Plans for improving net2phone's bottom line - Management outlined a focus on disciplined customer acquisition and targeted investments in high-growth geographies [61][62]