IDT(IDT) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - IDT Corporation generated record levels of gross profit, income from operations, and adjusted EBITDA in the second quarter, with consolidated adjusted EBITDA reaching a record $34 million, bringing the total for the first half of the year to $63 million [21][11][12] - The company expects to achieve approximately 40% adjusted EBITDA growth in fiscal 2025, building on the record $90 million obtained in fiscal 2024 [21] Business Line Data and Key Metrics Changes - NRS reported a 32% growth in recurring revenue, with adjusted EBITDA exceeding $10 million, and $310 in recurring revenue per terminal [15][11] - BOSS Money achieved a transaction volume of 5.7 million, with digital transactions representing over 80% of all remittances, and gross profit growth of 35% to a record $22 million [16][17] - net2phone's subscription revenue increased by 9% to $21 million, with a 14% increase on a constant currency basis [18] Market Data and Key Metrics Changes - Same-store sales at NRS retailers increased by 3.5% year-over-year in February, indicating healthy business activity [22] - BOSS Money's transaction volume in February increased by over 30% compared to the previous year, achieving the second highest weekly remittance transaction volume in its history [22] Company Strategy and Development Direction - The company is focusing on deepening market penetration and enhancing the value of its solutions for retailers through new features and functionalities [7] - IDT plans to continue returning value to shareholders through stock repurchases and increasing dividends, with a 20% increase in the quarterly dividend announced [11][26] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the impact of new federal immigration policies, noting no significant slowdown in business across segments [22] - The company is optimistic about the trajectory and opportunities in the U.S. market, with no immediate plans for organic international expansion [35] Other Important Information - The company provided capital expenditures from each reporting segment for the first time, offering greater clarity into cash generation [13] - IDT's traditional communications segment has seen adjusted EBITDA increase for three consecutive quarters, surpassing $20 million for the first time since fiscal 2022 [11][20] Q&A Session Summary Question: NRS terminal growth guidance - Management acknowledged a slight delay in adding units but expressed confidence in making up for it over the year due to new sales personnel [36] Question: Advertising revenue performance - Advertising revenue increased by 12% year-over-year, with data side growth of nearly 40% [34] Question: International expansion plans for NRS - Management indicated that international expansion is not a current focus, with potential acquisitions being a more likely route for entering new markets [35] Question: net2phone revenue growth despite low seat count addition - Management noted a good pipeline of larger deals and expects better performance in the second half of the year [39] Question: BOSS Money working capital requirements - Management clarified that the strong balance sheet supports working capital needs, allowing avoidance of financing costs [45] Question: Balancing profitability and growth in BOSS Money - Management emphasized a cautious approach to growth, focusing on profitability while exploring opportunities for investment in customer acquisition [51][56] Question: Expansion into new verticals for BOSS Money - Management reported positive initial results from new markets like Venezuela, while Brazil is still in the launch phase [62]