IDT(IDT) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - IDT Corporation reported a record adjusted EBITDA for the fourth quarter and full fiscal year 2024, with Q4 EBITDA reaching $25 million, the highest in the company's history [5][23]. - The company expects to surpass$100 million in consolidated EBITDA for fiscal 2025, driven by the profitability of all business segments [23]. Business Line Data and Key Metrics Changes - BOSS Money achieved over 40% year-over-year transaction volume and revenue growth in Q4, becoming EBITDA positive with approximately $4 million in positive EBITDA [4][15]. - net2phone added approximately 12,000 net new seats in Q4, including 2,000 CCaaS seats, with its adjusted EBITDA margin more than doubling compared to the previous year [4]. - The Traditional Communications segment saw a decline in EBITDA by about$11 million in fiscal 2024, but the decline is expected to moderate to around $5 million to$6 million in fiscal 2025 due to cost-cutting measures [20][21]. Market Data and Key Metrics Changes - The company is focusing on expanding its customer base in the large independent retailer market and increasing penetration of NRS Pay [4]. - BOSS Money is seeing strong growth in the Northeast and aims to grow its presence nationwide, with a focus on digital verticals [39]. Company Strategy and Development Direction - IDT plans to continue expanding NRS, BOSS Money, and net2phone, all of which are profitable and have significant growth potential [5]. - The company is committed to maximizing cash generation from each segment and returning value to shareholders through investments, share buybacks, and dividends [5]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering fiscal 2025 with strong momentum and highlighted the importance of long-term customer relationships over immediate margin expansion [17]. - The company anticipates a slight increase in consolidated revenue for fiscal 2025 as growth businesses offset declines in traditional segments [22]. Other Important Information - The company is deploying hundreds of new locations monthly and expanding its advertising tech while focusing on operational efficiencies [4][5]. - New product launches, such as kiosks and the Panther POS system, are expected to drive additional growth [33]. Q&A Session Summary Question: Impact of MetaSwitch end-of-life on net2phone - Management indicated that it has no effect on their business [7]. Question: Migration progress to own platform for net2phone - Management expects to start migrating more customers over the next quarters, with no new customers going onto any other platform [8]. Question: Timeline for full transition to own platform - No specific timeline was provided [9]. Question: Conditions for potential NRS spinoff - Management is focused on building NRS into a multibillion-dollar company before considering a spinoff [10]. Question: Incremental margins for BOSS Money post-EBITDA positivity - Management emphasized customer retention over margin expansion, focusing on long-term relationships [12][17]. Question: Revenue growth expectations for Traditional segment - Management expects the decline in Traditional segment EBITDA to be less severe in fiscal 2025 due to cost-cutting measures [21]. Question: Growth sources for BOSS Money - Management noted that they are taking market share from competitors and improving brand recognition [26][28]. Question: Goals for NRS in 2025 - NRS aims to grow its POS network by approximately 6,000 locations annually and expects EBITDA to grow by 30% [31].