IDT(US:IDT)2025-09-29 22:32Financial Data and Key Metrics Changes - For fiscal year 2025, consolidated adjusted EBITDA increased by 43% to a record $129 million, with full-year adjusted EBITDA totaling $128.7 million, surpassing the updated guidance of $126 million [4][11][26] - Consolidated revenue increased by 2% for the full year, marking the first full-year increase since 2021, with Q4 revenue up by 3% [12][11] - Consolidated gross margins improved by 310 basis points in Q4 and 380 basis points for the full year, reflecting the expansion of high-margin segments [13] Business Line Data and Key Metrics Changes - NRS segment's income from operations decreased by 3% to $5.8 million in Q4, while adjusted EBITDA increased by 32% to $9.3 million [14] - FinTech segment's income from operations surged by 88% to $4.8 million in Q4, with adjusted EBITDA climbing over threefold to $5.5 million [16] - Net2phone's income from operations increased by 74% to $1.5 million in Q4, and adjusted EBITDA increased by 42% to $3.5 million [19] Market Data and Key Metrics Changes - BOSS Money's digital channel now contributes over 80% of remittance volume, with digital transactions increasing by 28% in Q4 and the amount sent increasing by 41% [5][17] - The average recurring revenue per terminal at NRS reached $299 in Q4, benefiting from increased penetration of premium payment processing plans [15] - The remittance industry is expected to see a shift towards digital channels due to a new 1% federal tax on cash-originated remittances, effective January 1, 2026 [18] Company Strategy and Development Direction - The company plans to continue focusing on high-margin growth segments, with expectations of 20% to 25% revenue growth and faster adjusted EBITDA growth in fiscal 2026 [16] - Strategic initiatives include integrating retailers with delivery services like DoorDash and launching digital coupon offerings through NRS Insights [4][5] - The company is also investing in AI-driven solutions for net2phone, shifting its revenue model from a seat-based to a usage-based model [7][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal year 2026, citing strong customer enthusiasm and the potential for continued growth despite challenges in the remittance market due to immigration policy changes [9][47] - The company is committed to returning cash to stockholders through buybacks and dividends while evaluating potential acquisitions [9][24] - Management acknowledged the competitive landscape and the need to adapt to changing market conditions, particularly in the remittance and digital payment sectors [41][46] Other Important Information - The company did not repurchase shares in Q4 due to pursuing a significant acquisition opportunity that ultimately did not materialize [23][24] - A revised measure of non-GAAP adjusted EBITDA will be reported starting Q1 FY26, excluding non-cash compensation expenses [25][26] Q&A Session Summary Question: Progress on stablecoins and Visa-linked wallets - Management confirmed that wallets are in beta phase and expect stablecoins to play a larger role in future transactions [28] Question: WhatsApp launch date - The WhatsApp service is set to launch in the next few days for existing customers, with a broader rollout expected in 30 to 45 days [30] Question: Churn rate in NRS terminals - Management attributed churn to increased competition, immigration enforcement, and technical issues, but noted improvements in recent weeks [41][44] Question: Sustainability of BOSS Money's growth - Management indicated that while growth may slow, initiatives like WhatsApp and digital wallets could enhance business growth [46][49] Question: Focus on acquisitions - Management suggested a preference for smaller acquisitions over larger ones, emphasizing organic growth and internal investments [54]