Newark, NJ, June 16, 2022 — net2phone, a leading cloud communications provider, today announced a partnership with TeleBermuda International Limited (TBi) to provide its unified communications-as-a-service (UCaaS) solutions to TBi’s business customers.

Through the partnership, net2phone will support TBi with fully localized, co-branded UCaaS offerings which TBi will market to businesses operating throughout its markets.

“We are delighted to partner with TBi to provide businesses across Bermuda with our omni-channel UCaaS solutions,” said Clyde Pascal, Senior Director of International Business at net2phone. “Through our partnership, local businesses can retain the same phone numbers and functionality they have long enjoyed, while adding powerful new cloud communications tools, unlimited domestic and international calling to over 40 popular destinations, video conferencing, and the ability to call and send SMS and MMS text messages from their business numbers using any networked computer or smartphone.”

TBi is a Bermuda-based Integrated Communications Operating License (ICOL) carrier of competitive international data, internet, co-location hosting services, television and international long-distance voice.

“TBi will offer Bermuda businesses cost-effective, flexible, and responsive UCaaS solutions to connect with the world,” said TBi President Lee Greene. “net2phone is a leading unified communications provider that has been providing internet-based telephony for over 30 years. Its deep VoIP expertise, feature-rich communications platform and business process integrations will provide our clients with powerful competitive advantages.”

Damiso Husband, TBi Vice President of Sales, added: “The TBi and net2phone partnership provides business clients with world-class collaboration services to meet the changing needs of the workplace. We welcome net2phones’s UCaaS offerings to Bermuda and believe our clients will relish the organizational benefits of our hosted collaboration solutions.”

“Throughout our markets worldwide, we are positioned to drive growth by leveraging our long-standing relationships with successful carriers like TBi,” said Jonah Fink, President of net2phone. “These carriers are trusted brands with unsurpassed knowledge of their respective markets. Their localized sales and marketing expertise make them ideal partners to promote the benefits of our global cloud communications platform to their business customers.”

Forward Looking Statements:

All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.

About net2phone:

net2phone’s cloud communications and contact center solutions help businesses around the globe succeed through smarter conversations. net2phone is a subsidiary of IDT Corporation (NYSE: IDT). To learn more, please visit net2phone.com or connect on LinkedIn.

About TBi:

TeleBermuda International Limited (TBi) is a Bermuda-based ICOL carrier of competitive international data, internet, co-location hosting services, television, and international long-distance voice. To learn more, please visit https://telebermuda.com/ or connect on LinkedIn

Media Contact:
Bill Ulrey
Phone: 973/438-3034
Email: william.ulrey@idt.net

# # #

NEWARK, NJ, June 02, 2022 — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, today reported results for the third quarter of its 2022 fiscal year, the three months ended April 30, 2022.

THIRD QUARTER FISCAL YEAR 2022 (3Q22) HIGHLIGHTS

(Throughout this release, results are for 3Q22 and are compared to 3Q21 unless otherwise noted. All ‘per share‘ results are per diluted share. Please see the final page of this release for important supplemental information on asterisked metrics.)

• Key business unit revenue and related metrics:
  • National Retail Solutions (NRS) recurring revenue* increased 101.9% to $10.0 million. Active terminals increased by 1,400 sequentially to approximately 17,900, and payment processing accounts increased by 1,200 sequentially to approximately 9,200.
  • net2phone subscription revenue** increased 42.0% to $14.2 million. Seats served increased by 22,000 sequentially, including nearly 7,000 through the previously announced acquisition of a CCaaS provider, to approximately 279,000.
  • Money Transfer revenue increased 51.5% to $15.5 million. Transaction volumes increased by 27.1% to 2.4 million, with solid growth in both direct to consumer and retail channels.
• Consolidated revenue decreased 12.2% to $328 million from $374 million. Direct cost of revenue decreased 17.7% to $248 million from $301 million.
• Consolidated income from operations decreased to $13.3 million from $13.9 million.
• Net income attributable to IDT decreased to $4.8 million from $36.3 million, and EPS decreased to $0.18 from $1.39. In 3Q22, EPS included the impact of a $0.13 per share loss from marked-to-market investments. In 3Q21, EPS included the positive impacts of both a $0.92 per share reversal of income tax valuation allowances and a $0.21 per share gain from marked-to-market investments.
• Adjusted EBITDA*** increased to $18.0 million from $17.9 million.
• Non-GAAP EPS*** was $0.23 compared to $0.47.

REMARKS BY SHMUEL JONAS, CEO

“Each of our three high-margin, high-growth businesses had a very strong third quarter, helping us to again achieve solid levels of consolidated income from operations and Adjusted EBITDA, consistent with our results from the first two quarters of our fiscal year.

“NRS added nearly 1,400 net POS terminals and 1,200 net payment processing accounts during the third quarter, maintaining the accelerated rate of acquisitions achieved in the second quarter. NRS recurring revenue increased 102% year-over-year, keyed by strong merchant service and advertising sales. Looking ahead, we expect that NRS will sustain robust, high-margin growth in the coming quarters. In particular, we expect advertising and data offerings to benefit from both long-term trends such as the increasing allocation of advertising budgets to out-of-home venues, as well as from seasonal tailwinds including increased political advertising heading into the second half of the calendar year.

“net2phone’s strategic focus on the SMB and small enterprise markets within North and South America, efficient execution, and acquisition of CCaaS provider Integra all contributed to solid growth in the third quarter. Subscription revenue increased 42% year-over-year due primarily to the addition of approximately 22,000 seats during the quarter –including almost 7,000 seats from the Integra acquisition. Seat growth was again strongest in our Latin American markets although our U.S. business performed nearly as well. We will begin selling our CCaaS offering in North America in the current – fourth – quarter of our fiscal year and expect its expansion to gradually become a key driver of seat growth and ARPU expansion.

“BOSS Money, our international remittance business, increased revenue 51% to $15.5 million driven both by a 27% year-over-year increase in transaction volumes and a comparably robust increase in revenue per transaction – including both transfer fees and revenue derived from foreign exchange. We continue to build out our disbursement networks, particularly in Africa and the Caribbean, and to fine-tune our direct-to-consumer pricing strategies to capture additional revenue and margins. BOSS Money also continues to benefit from its integration into the BOSS Revolution Calling app last October, providing another example of our ability to generate growth by deploying our offerings across multiple channels and platforms.

“In our Traditional Communications segment, revenue decreased by $59.9 million or 17% to $285.9 million. The surge in demand for paid voice that we experienced during the COVID pandemic is now retreating and exacerbating the impact of the underlying declines in retail calling and wholesale carrier services. Our Mobile Top-Up business underperformed this quarter but we are investing in technology, marketing, and sales to improve its performance.

Because Traditional Communications’ lost revenue overall was skewed to lower margin sales, income from operations from this segment decreased $3.0 million year-over-year to $17.4 million. On a consolidated basis, income from operations decreased $0.5 million to $13.3 million while Adjusted EBITDA*** increased $0.1 million to $18.0 million. We expect that as our growth businesses continue to expand, our consolidated bottom-line results in the coming quarters will increasingly reflect their contributions.”

CONSOLIDATED RESULTS

Results (in millions, except EPS)			3Q22				2Q22				3Q21				3Q22 – 3Q21 change (%/$)
Revenue		$	328			$	337			$	374				(12.2		)%
Direct cost of revenue		$	248			$	257			$	301				(17.7		)%
SG&A expense		$	63			$	61			$	55				+13.8	%
Depreciation and amortization		$	4.5			$	4.4			$	4.4				+1.9	%
Income from operations		$	13.3			$	13.8			$	13.9				(3.9		)%
Net income attributable to IDT		$	4.8			$	7.5			$	36.3			$	(31.5		)
Adjusted EBITDA***		$	18.0			$	18.7			$	17.9				+0.7	%
Earnings per diluted share		$	0.18			$	0.28			$	1.39			$	(1.21		)
Non-GAAP net income***		$	6.0			$	8.8			$	12.3			$	(6.3		)
Non-GAAP EPS***		$	0.23			$	0.33			$	0.47			$	(0.24		)

RESULTS BY SEGMENT
(Results are for 3Q22 and are compared to 3Q21 except where otherwise noted)

(in millions)		Fintech												net2phone-UCaaS												Traditional Communications
			3Q22				2Q22				3Q21				3Q22				2Q22				3Q21				3Q22				2Q22				3Q21
Revenue		$	26.9			$	23.1			$	16.6			$	15.6			$	13.5			$	11.4			$	285.9			$	300.4			$	345.7
Direct cost of revenue		$	8.2			$	7.3			$	6.0			$	2.6			$	2.4			$	2.2			$	236.7			$	247.6			$	292.6
SG&A expense		$	17.9			$	15.3			$	11.6			$	13.8			$	13.0			$	11.8			$	29.3			$	30.4			$	30.0
Income (loss) from operations		$	0.2			$	(0.2	)		$	(1.4	)		$	(2.3	)		$	(2.9	)		$	(4.0	)		$	17.4			$	19.9			$	20.4
Adjusted EBITDA***		$	0.8			$	0.4			$	(1.0	)		$	(0.9	)		$	(1.9	)		$	(2.6	)		$	19.9			$	22.4			$	23.1
Capital expenditures		$	1.2			$	1.3			$	1.3			$	1.4			$	1.3			$	1.3			$	1.9			$	1.9			$	1.9

Fintech

Fintech comprises National Retail Solutions (NRS), an operator of a nationwide Point-Of-Sale (POS) retail network providing merchant services, digital advertising, transaction data, and ancillary services, and BOSS Money, a provider of international money remittances.

In 3Q22 and 3Q21, the Fintech segment accounted for 8.2% and 4.4% of IDT’s consolidated revenue, respectively.

NRS Results (Revenue $ in thousands)			3Q22				2Q22				3Q21				3Q22 -3Q21 change %
POS terminals, active – end of period			17,900				16,500				13,100				37		%
Payment processing accounts – end of period			9,200				8,000				4,900				89		%
NRS recurring revenue
Merchant services and other		$	4,765			$	3,810			$	2,116				+125	%
Advertising & data			3,729				3,901				1,958				+90	%
SaaS fees			1,462				1,318				856				+71	%
Total recurring revenue		$	9,956			$	9,029			$	4,930				+102	%
POS terminal sales			1,427				1,591				1,454				(2		)%
Total NRS revenue		$	11,383			$	10,620			$	6,384				+78	%
Monthly average recurring revenue per terminal (excl. POS terminal sales revenue)****		$	193			$	190			$	131				+47	%

NRS Take-Aways:

• As of April 30, 2022, NRS’ POS terminal network comprised approximately 17,900 active POS terminals, an increase of 37% compared to a year earlier, and approximately 9,200 payment processing accounts, a year over year increase of 89%.
• NRS revenue increased 78.3% to $11.4 million from $6.4 million and recurring revenue* increased by 101.9% to $10.0 million from $4.9 million. The increases were driven by the expansion of the NRS POS and payment processing networks and increased merchant services and digital-out-of-home (DOOH) advertising & data sales.
• NRS monthly average recurring revenue per terminal**** increased to $193 from $131.
• During 3Q22, NRS announced a partnership with OnPoint, a leading provider of scan data programs for the independent and small chain C-store market. Through the partnership, OnPoint will promote the NRS POS system and payment processing service to prospective C-store clients.

BOSS Money Take-Aways:

• Transaction volumes increased 27% to 2.37 million from 1.86 million in the year-ago period.
• Revenue increased 51.5% to $15.5 million from $10.3 million.
• BOSS Money continued to expand its global payments network including announced expansions of service to Ethiopia and Jamaica.

net2phone-UCaaS

In 3Q22 and 3Q21, the net2phone-UCaaS segment accounted for 4.7% and 3.1% of IDT’s consolidated revenue, respectively.

net2phone-UCaaS Take–aways:

• Total seats served increased 33% to 279,000 at April 30, 2022 including approximately 7,000 seats added through the Integra CCaaS acquisition, from 210,000 a year earlier.
• Subscription revenue** increased 42.0% to $14.2 million from $10.0 million, led by strong growth in both net2phone’s South and North American regions and the addition of Integra’s CCaaS revenue for the final two months of the quarter.
• During 3Q22, IDT announced a postponement of the planned spin-off of net2phone, in light of market conditions.

Traditional Communications

In 3Q22 and 3Q21, the Traditional Communications segment accounted for 87.1% and 92.5% of IDT’s consolidated revenue, respectively.

Traditional Communications Take–Aways:

• Mobile Top-Up revenue decreased 12.6% to $115.9 million from $132.6 million.
• BOSS Revolution Calling revenue decreased 17.6% to $91.8 million from $111.4 million, while minutes-of-use decreased 21.2% compared to the year-ago quarter. The decreases reflect the erosion of the surge in demand for voice calls that began with the onset of the COVID pandemic, on top of the underlying decline of the paid voice communications market.
• IDT Global’s carrier services revenue decreased 24.3% to $67.1 million from $88.6 million reflecting a 24.2% decrease in minutes-of-use as the wholesale paid voice market contracted at an accelerated rate.

NOTES ON FINANCIAL STATEMENTS

Consolidated results for all periods presented include corporate overhead. Corporate G&A expense increased to $1.8 million in 3Q22 from $1.7 million in 3Q21.

As of April 30, 2022, IDT held $136.0 million in cash, cash equivalents, debt securities, and current equity investments. Current assets totaled $371.1 million and current liabilities totaled $315.4 million.

Net cash provided by operating activities during 3Q22 was $1.6 million compared to $12.5 million during 3Q21. Exclusive of changes in customer deposit balances at our Gibraltar-based bank, net cash provided by operating activities during 3Q22 was $9.6 million compared to $12.5 million during 3Q21.

Capital expenditures increased to $4.8 million in 3Q22 from $4.6 million in 3Q21.

IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION

This release is available for download in the “Investors & Media” section of the IDT Corporation website (https://www.idt.net/investors-and-media) and has been filed on a current report (Form 8-K) with the SEC.

IDT will host an earnings conference call beginning at 5:30 PM Eastern today with management’s discussion of results, outlook, a
nd strategy followed by Q&A with investors. To listen to the call and participate in the Q&A, dial 1-888-506-0062 (toll-free from the US) or 1-973-528-0011 (international) and request the IDT Corporation call (participant access code: 733921).

A replay of the conference call will be available approximately three hours after the call concludes through June 15, 2022. To access the call replay, dial 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and provide this replay number: 45654. The replay will also be accessible via streaming audio at the IDT investor relations website.

ABOUT IDT:

IDT Corporation (NYSE: IDT) is a global provider of fintech, cloud and traditional communications services. We make it easy for families to communicate and support each other across international borders. We also enable businesses to transact and communicate with their customers with enhanced intelligence and insight.

Our BOSS Money international remittance and BOSS Revolution international calling services make sending money and speaking with friends and family around the world convenient and reliable. National Retail Solutions‘ (NRS) point-of-sale retail network enables independent retailers to operate and process transactions more effectively while providing advertisers and consumer marketers with unprecedented reach into underserved consumer markets. net2phone‘s communications-as-a-service solutions provide businesses with intelligently integrated cloud communications and collaboration tools across channels and devices. Our IDT Global and IDT Express wholesale offerings enable communications service enterprises to provision and manage international voice and SMS services.

All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.

CONTACT:

IDT Corporation Investor Relations
Bill Ulrey
william.ulrey@idt.net
973-438-3838

IDT CORPORATION

CONSOLIDATED BALANCE SHEETS

			April 30,				July 31,
			2022				2021
			(Unaudited)
			(in thousands)
Assets
Current assets:
Cash and cash equivalents		$	97,139			$	107,147
Restricted cash and cash equivalents			100,957				119,769
Debt securities			22,706				14,012
Equity investments			16,179				42,434
Trade accounts receivable, net of allowance for doubtful accounts of $5,061 at April 30, 2022 and $4,438 at July 31, 2021			52,881				46,644
Disbursement prefunding			37,111				27,656
Prepaid expenses			16,676				13,694
Other current assets			27,442				16,779
Total current assets			371,091				388,135
Property, plant, and equipment, net			33,447				30,829
Goodwill			26,490				14,897
Other intangibles, net			10,041				7,578
Equity investments			7,319				11,654
Operating lease right-of-use assets			7,919				7,671
Deferred income tax assets, net			36,598				41,502
Other assets			10,365				10,389
Total assets		$	503,270			$	512,655
Liabilities and equity
Current liabilities:
Trade accounts payable		$	27,817			$	24,502
Accrued expenses			118,285				129,085
Deferred revenue			39,054				42,293
Customer deposits			95,104				115,524
Other current liabilities			35,103				27,930
Total current liabilities			315,363				339,334
Operating lease liabilities			5,322				5,473
Other liabilities			6,326				1,234
Total liabilities			327,011				346,041
Commitments and contingencies
Redeemable noncontrolling interest			10,099				–
Equity:
IDT Corporation stockholders’ equity:
Preferred stock, $.01 par value; authorized shares-10,000; no shares issued			–				–
Class A common stock, $.01 par value; authorized shares-35,000; 3,272 shares issued and 1,574 shares outstanding at April 30, 2022 and July 31, 2021			33				33
Class B common stock, $.01 par value; authorized shares-200,000; 27,725 and 26,379 shares issued and 24,667 and 24,187 shares outstanding at April 30, 2022 and July 31, 2021, respectively			277				264
Additional paid-in capital			295,915				278,021
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 3,058 and 2,192 shares of Class B common stock at April 30, 2022 and July 31, 2021, respectively			(88,175	)			(60,413	)
Accumulated other comprehensive loss			(11,341	)			(10,183	)
Accumulated deficit			(33,072	)			(42,858	)
Total IDT Corporation stockholders’ equity			163,637				164,864
Noncontrolling interests			2,523				1,750
Total equity			166,160				166,614
Total liabilities and equity		$	503,270			$	512,655

IDT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended								Nine Months Ended
		April 30,								April 30,
		2022				2021				2022				2021
		(in thousands, except per share data)
Revenues		$	328,353			$	373,831			$	1,035,494			$	1,057,022
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)			247,565				300,797				796,516				843,116
Selling, general and administrative (i)			62,772				55,148				183,948				161,591
Depreciation and amortization			4,509				4,425				13,333				13,381
Severance			–				184				67				439
Total costs and expenses			314,846				360,554				993,864				1,018,527
Other operating (expense) gain, net			(179	)			595				(709	)			1,550
Income from operations			13,328				13,872				40,921				40,045
Interest income, net			85				125				217				223
Other (expense) income, net			(5,068	)			3,815				(24,234	)			5,608
Income before income taxes			8,345				17,812				16,904				45,876
(Provision for) benefit from income taxes			(3,239	)			18,586				(5,887	)			12,142
Net income			5,106				36,398				11,017				58,018
Net (income) attributable to noncontrolling interests			(335	)			(50	)			(1,231	)			(274	)
Net income attributable to IDT Corporation		$	4,771			$	36,348			$	9,786			$	57,744
Earnings per share attributable to IDT Corporation common stockholders:
Basic		$	0.18			$	1.42			$	0.38			$	2.27
Diluted		$	0.18			$	1.39			$	0.37			$	2.23
Weighted-average number of shares used in calculation of earnings per share:
Basic			25,901				25,530				25,706				25,475
Diluted			26,205				26,136				26,455				25,903
(i) Stock-based compensation included in selling, general and administrative expenses		$	1,245			$	275			$	1,840			$	1,215

IDT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

		Nine Months Ended April 30,
		2022				2021
		(in thousands)
Operating activities
Net income		$	11,017			$	58,018
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			13,333				13,381
Deferred income taxes			4,624				(13,811	)
Provision for doubtful accounts receivable			1,578				1,220
Net unrealized loss (gain) from marketable securities			19,705				(508	)
Stock-based compensation			1,840				1,215
Other			3,486				(4,415	)
Change in assets and liabilities:
Trade accounts receivable			(8,461	)			1,626
Disbursement prefunding, prepaid expenses, other current assets, and other assets			(20,504	)			(7,961	)
Trade accounts payable, accrued expenses, other current liabilities, and other liabilities			(2,566	)			(2,154	)
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)			(9,843	)			(11,078	)
Deferred revenue			(948	)			2,611
Net cash provided by operating activities			13,261				38,144
Investing activities
Capital expenditures			(13,794	)			(13,455	)
Purchase of convertible preferred stock in equity method investment			(1,051	)			(4,000	)
Payments for acquisitions, net of cash acquired			(7,546	)			(2,656	)
Purchase of Rafael Holdings, Inc. Class B common stock and warrant			–				(5,000	)
Exercise of warrant to purchase shares of Rafael Holdings, Inc. Class B common stock			–				(1,000	)
Purchases of debt securities and equity investments			(11,277	)			(39,347	)
Proceeds from maturities and sales of debt securities and redemptions of equity investments			7,752				18,670
Net cash used in investing activities			(25,916	)			(46,788	)
Financing activities
Distributions to noncontrolling interests			(359	)			(646	)
Proceeds from other liabilities			2,301				–
Repayment of other liabilities.			(1,319	)			(69	)
Proceeds from borrowings under revolving credit facility			2,566				–
Repayment of borrowings under revolving credit facility.			(2,566	)			–
Proceeds from sale of redeemable equity in subsidiary			10,000				–
Proceeds from exercise of stock options			137				686
Repurchases of Class B common stock			(12,832	)			(4,192	)
Net cash used in financing activities			(2,072	)			(4,221	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents			(14,093	)			6,652
Net decrease in cash, cash equivalents, and restricted cash and cash equivalents			(28,820	)			(6,213	)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period			226,916				201,222
Cash, cash equivalents, and restricted cash and cash equivalents at end of period		$	198,096			$	195,009
Supplemental schedule of non-cash investing and financing activities
Liabilities incurred for acquisitions		$	7,849			$	393
Shares of the Company’s Class B common stock issued for acquisition		$	1,000			$	–
Cashless exercise of stock options in exchange for shares of the Company’s Class B common stock		$	14,930			$	–

Reconciliation of Non-GAAP Financial Measures for the
Third Quarter Fiscal 2022 and 2021

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), IDT also disclosed, for 3Q22, 2Q22, and 3Q21, Adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per diluted share (EPS), all of which are non-GAAP measures. Generally, a non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

IDT’s measure of non-GAAP net income starts with net income in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expense, and deducts other operating gains. These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2022 and fiscal 2021 periods.

IDT’s measure of non-GAAP EPS is calculated by dividing non-GAAP net income by the diluted weighted-average shares.

Management believes that IDT’s Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS are measures which provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of IDT’s or the relevant segment’s core operating results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS to evaluate operating performance in relation to IDT’s competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, IDT has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting.

Management refers to Adjusted EBITDA, as well as the GAAP measures income (loss) from operations and net income, on a segment and/or consolidated level to facilitate internal and external comparisons to the segments’ and IDT’s historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.

While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or capitalized in prior periods. IDT’s Adjusted EBITDA, which is exclusive of depreciation and amortization, is a useful indicator of its current performance.

Severance expense is excluded from the calculation of Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS. Severance expense is reflective of decisions made by management in each period regarding the aspects of IDT’s and its segments’ businesses to be focused on in light of changing market realities and other factors. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of IDT’s core and continuing operations.

Other operating (expense) gain, net, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS. Other operating (expense) gain, net includes legal fees net of insurance claims related to Straight Path Communications Inc.’s stockholders’ putative class action and derivative complaint, expense for the indemnification of a net2phone cable telephony customer related to patent infringement claims brought against the customer, a gain from the write-off of a contingent consideration liability, expense for other legal and regulatory matters, and a gain from the sale of IDT’s rights under a class action lawsuit. From time-to-time, IDT may have gains or incur costs related to non-routine legal and regulatory matters, however, these various items generally do not occur each quarter. IDT believes the gain and losses from these non-routine matters are not components of IDT’s or the relevant segment’s core operating results.

Stock-based compensation recognized by IDT and other companies may not be comparable because of the variety of types of awards as well as the various valuation methodologies and subjective assumptions that are permitted under GAAP. Stock-based compensation is excluded from IDT’s calculation of non-GAAP net income and non-GAAP EPS because management believes this allows investors to make more meaningful comparisons of the operating results per share of IDT’s core business with the results of other companies. However, stock-based compensation will continue to be a significant expense for IDT for the foreseeable future and an important part of employees’ compensation that impacts their performance.

In 3Q21, due to continued and projected profitability, IDT was able to release a portion of its valuation allowance that was recorded against its deferred tax assets. This income tax benefit was excluded from IDT’s non-GAAP net income and non-GAAP EPS because it was only indirectly related to the current results of IDT’s core operation
s.

Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS should be considered in addition to, not as a substitute for, or superior to, income (loss) from operations, cash flow from operating activities, net income, basic and diluted earnings per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, IDT’s measurements of Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS may not be comparable to similarly titled measures reported by other companies.

Following are reconciliations of Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS to the most directly comparable GAAP measure, which are, (a) for Adjusted EBITDA, income (loss) from operations for IDT’s reportable segments and net income for IDT on a consolidated basis, (b) for non-GAAP net income, net income, and (c) for non-GAAP EPS, diluted earnings per share.

IDT Corporation Reconciliation of Net Income to Adjusted EBITDA (unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions

		Total IDT Corporation				Traditional Communica-tions				net2phone- UCaaS				Fintech				Corporate
Three Months Ended April 30, 2022 (3Q22)
Net income attributable to IDT Corporation		$	4.8
Adjustments:
Net income attributable to noncontrolling interests			0.3
Net income			5.1
Provision for income taxes			3.2
Income before income taxes			8.3
Interest income, net			(0.1	)
Other expense, net			5.1
Income (loss) from operations			13.3			$	17.4			$	(2.3	)		$	0.2			$	(2.0	)
Depreciation and amortization			4.5				2.5				1.3				0.7				–
Other operating expense, net			0.2				–				–				–				0.2
Adjusted EBITDA		$	18.0			$	19.9			$	(0.9	)		$	0.8			$	(1.8	)

		Total IDT Corporation				Traditional Communica-tions				net2phone- UCaaS				Fintech				Corporate
Three Months Ended January 31, 2022 (2Q22)
Net income attributable to IDT Corporation		$	7.5
Adjustments:
Net income attributable to noncontrolling interests			0.8
Net income			8.3
Provision for income taxes			2.7
Income before income taxes			11.0
Interest income, net			(0.1	)
Other expense, net			2.9
Income (loss) from operations			13.8			$	19.9			$	(2.9	)		$	(0.2	)		$	(3.0	)
Depreciation and amortization			4.4				2.5				1.3				0.6				–
Other operating expense (gain), net			0.4				–				(0.3	)			–				0.7
Adjusted EBITDA		$	18.7			$	22.4			$	(1.9	)		$	0.4			$	(2.3	)

IDT Corporation
Reconciliation of Net Income to Adjusted EBITDA
(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions.

		Total IDT Corporation				Traditional Communica-tions				net2phone- UCaaS				Fintech				Corporate
Three Months Ended April 30, 2021 (3Q21)
Net income attributable to IDT Corporation		$	36.3
Adjustments:
Net income attributable to noncontrolling interests			0.1
Net income			36.4
Benefit from income taxes			(18.6	)
Income before income taxes			17.8
Interest income, net			(0.1	)
Other income, net			(3.8	)
Income (loss) from operations			13.9			$	20.4			$	(4.0	)		$	(1.4	)		$	(1.1	)
Depreciation and amortization			4.4				2.5				1.4				0.5				–
Severance expense			0.2				0.2				–				–				–
Other operating (gain) expense, net			(0.6	)			0.1				–				(0.1	)			(0.6	)
Adjusted EBITDA		$	17.9			$	23.1			$	(2.6	)		$	(1.0	)		$	(1.7	)

IDT Corporation
Reconciliations of Net Income to Non-GAAP Net Income and Earnings per share to Non-GAAP EPS
(unaudited) in millions, except per share data. Figures may not foot due to rounding to millions.

		3Q22				2Q22				3Q21
Net income		$	5.1			$	8.3			$	36.4
Adjustments (add) subtract:
Stock-based compensation			(1.2	)			(0.3	)			(0.3	)
Severance expense			–				–				(0.2	)
Other operating (expense) gain, net			(0.2	)			(0.4	)			0.6
Release of DTA valuation allowance			–				–				24.0
Total adjustments			(1.4	)			(0.7	)			24.1
Income tax effect of total adjustments			(0.5	)			(0.2	)			–
			0.9				0.5				(24.1	)
Non-GAAP net income		$	6.0			$	8.8			$	12.3
Earnings per share:
Basic		$	0.18			$	0.29			$	1.42
Total adjustments			0.05				0.05				(0.94	)
Non-GAAP – basic		$	0.23			$	0.34			$	0.48
Weighted-average number of shares used in calculation of basic earnings per share			25.9				25.7				25.5
Diluted		$	0.18			$	0.28			$	1.39
Total adjustments			0.05				0.05				(0.92	)
Non-GAAP – diluted		$	0.23			$	0.33			$	0.47
Weighted-average number of shares used in calculation of diluted earnings per share			26.2				26.5				26.1

Explanation of Key Performance Metrics

NRS’ Monthly Average Recurring Revenue per Terminal is a financial metric. Monthly Average Recurring Revenue per Terminal is calculated by dividing NRS’ recurring revenue by the average number of active POS terminals during the period. NRS’ recurring revenue is NRS’ revenue in accordance with GAAP excluding revenue from POS terminal sales. The average number of active POS terminals is calculated by adding the beginning and ending number of active POS terminals during the period and dividing by two. NRS’ recurring revenue divided by the average number of active POS terminals is divided by three when the period is a fiscal quarter. Monthly Average Recurring Revenue per Terminal is useful for comparisons of NRS’ revenue per customer to prior periods and to competitors and others in the market, as well as for forecasting future revenue from the customer base.

net2phone-UCaaS’ cloud communications offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. The number of seats served and subscription revenue trends and comparisons between periods are used in the analysis of net2phone-UCaaS’ revenues and direct cost of revenues are strong indications of the top-line growth and performance of the business.

Supplemental Information

* NRS’ recurring revenue is a key performance metric. Please refer to the Explanation of Key Performance Metrics above for an explanation of this metric.

** net2phone subscription revenue is a key performance metric. Please refer to the Explanation of Key Performance Metrics above for an explanation of this metric.

*** Throughout this release, Adjusted EBITDA, Non-GAAP net income and Non-GAAP EPS are Non-GAAP measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measures earlier in this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measure.

**** NRS’ Monthly Average Recurring Revenue per Terminal is a key performance metric. Please refer to the Explanation of Key Performance Metrics above for an explanation of this metric.

# # #

NEWARK, NJ, May 18, 2022 — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, has scheduled its report of financial and operational results for the third quarter of its 2022 fiscal year (the three months ended April 30th) on Thursday, June 2, 2022.

IDT’s earnings release will be issued and posted on the IDT investor relations website (https://www.idt.net/investors-and–media) at approximately 4:30 PM Eastern.

IDT will host an earnings conference call beginning at 5:30 PM Eastern with management’s discussion of results, outlook, and strategy followed by Q&A with investors. To listen to the call and participate in the Q&A, dial 1-888-506-0062 (toll-free from the US) or 1-973-528-0011 (international) and request the IDT Corporation call (participant access code: 733921).

A replay of the conference call will be available approximately three hours after the call concludes through June 15, 2022. To access the call replay, dial 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and provide this replay number: 45654. The replay will also be accessible via streaming audio at the IDT investor relations website.

About IDT Corporation:

IDT Corporation (NYSE: IDT) is a global provider of fintech, cloud communications, and traditional communications services. We make it easy for families to contact and support each other across international borders. We also enable businesses to transact and communicate with their customers with enhanced intelligence and insight.

Our BOSS Money international remittance and BOSS Revolution international calling services make sending money and speaking with friends and family around the world convenient and reliable. National Retail Solutions‘ (NRS) point-of-sale retail network enables independent retailers to operate and process transactions more effectively while providing advertisers and consumer marketers with unprecedented reach into underserved consumer markets. net2phone‘s communications-as-a-service solutions provide businesses with intelligently integrated cloud communications and collaboration tools across channels and devices. Our IDT Global and IDT Express wholesale offerings enable communications service enterprises to provision and manage international voice and SMS services.

Contact:
Bill Ulrey
IDT Investor Relations
Phone: (973) 438-3838
E-mail: invest@idt.net

# # #

Partnership with TerraPay Provides More Ways to Support Family and Friends in Ethiopia

Newark, NJ., May 12, 2022 — IDT Corporation (NYSE: IDT) – a global provider of fintech, cloud communications, and traditional communications services – today announced that its BOSS Money remittance service now offers direct deposit to approximately 40 million accounts across Ethiopian banks. The expanded service, powered by Terra Pay, enables BOSS Money customers in the United States to send cash directly to the bank accounts of family and friends in Ethiopia for receipt within minutes.

“BOSS Money has attracted a loyal following in the Ethiopian diaspora because of our reliable cash pick-up service, low fees, and favorable exchange rates,” said Alfredo O’Hagan, IDT’s SVP for Consumer Payments. “Now, we are pleased to offer direct deposit to 40 million accounts at Ethiopian banks in addition to cash pick up at over 4,600 branch locations.”

BOSS Money customers can transfer up to US$100 to Ethiopia for as low as US$3.99 or up to US$2,999 for as little as US$6.99 through the BOSS Money and Boss Calling apps, while taking advantage of BOSS Money’s ultra-competitive exchange rates. The apps are free on the App Store and on Google Play. Senders utilizing either app or the bossrevolution.com website for the first time pay no fees on transfers up to US$300. Customers in the United States can also send cash from over 1,000 BOSS Money retailers across the country.

BOSS Money‘s direct deposit option is available to account holders at the following Ethiopian Banks: Abay Bank, Addis International Bank, Awash International Bank, Bank of Abyssinia, Berhan International Bank, Bunna Bank, Commercial Bank of Ethiopia, Cooperative Bank of Oromia, Dashen Bank, Debub Global Bank, Development Bank of Ethiopia, Enat Bank, Lion International Bank, NIB International Bank, United Bank, Wegagen Bank, and Zemen Bank.

About IDT Corporation:

IDT Corporation (NYSE: IDT) is a global provider of fintech, cloud communications, and traditional communications services. We help families to share, communicate and support each other across international borders. We also enable businesses to transact and communicate with their customers with enhanced intelligence and insight.

Our BOSS Money international money remittance and mobile top-up services offer convenient and reliable value transfers. Our BOSS Revolution calling service provides dependable voice and messaging communications globally. Our National Retail Solutions‘ (NRS) point-of-sale retail network enables independent retailers to operate and process transactions more effectively while providing advertisers and consumer marketers with unprecedented reach into underserved consumer markets. net2phone‘s unified communications as a service solution provides businesses with intelligently integrated cloud communications and collaboration tools across channels and devices. Our IDT Global and IDT Express wholesale offerings enable communications service enterprises to provision and manage international voice and SMS services.

About TerraPay:

Headquartered in the Netherlands, TerraPay believes that the smallest payment deserves a borderless journey as safe as the largest. The company has been building an ever-expanding payments highway that empowers businesses to create transparent customer experiences with an uninterrupted, secure, and real-time global passage for every payment, however small or large. Registered and regulated across 26 global markets, TerraPay is a leading global partner to banks, mobile wallets, money transfer operators, merchants, and financial institutions, creating a more expansive and inclusive international financial ecosystem. With access to payments infrastructure that spans the globe, their partners become beacons of the promise of global financial
inclusion. For more information, please visit terrapay.com

All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.

Contact:
Bill Ulrey
IDT Investor Relations
Phone: (973) 438-3838
E-mail: invest@idt.net

# # #

NEWARK, NJ, May 05, 2022 — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, announced today that, in light of current market conditions, its Board of Directors has postponed the spinoff of its net2phone cloud communications segment, which it had been preparing to spin off on or before July 31st, 2022.

“The net2phone team has achieved exceptional results bringing advanced cloud communication solutions to markets in North and South America,” said Jonah Fink, President of net2phone. “We remain very excited by net2phone’s rapid growth, the transformational opportunities created through the recent acquisition of Integra, and the strength of net2phone’s global channel partnerships.”

Shmuel Jonas, IDT’s CEO, added, “While net2phone remains within IDT, we will rapidly execute on a plan to transform net2phone’s business so that it will become bottom line accretive, and we remain resolute in our commitment to grow and monetize the business at an opportune time.”

About IDT Corporation:

IDT Corporation (NYSE: IDT) is a global provider of fintech, cloud and traditional communications services. We make it easy for families to communicate and support each other across international borders. We also enable businesses to transact and communicate with their customers with enhanced intelligence and insight.

Our BOSS Money international remittance and BOSS Revolution international calling services make sending money and speaking with friends and family around the world convenient and reliable. National Retail Solutions‘ (NRS) point-of-sale retail network enables independent retailers to operate and process transactions more effectively while providing advertisers and consumer marketers with unprecedented reach into underserved consumer markets. net2phone‘s communications-as-a-service solutions provide businesses with intelligently integrated cloud communications and collaboration tools across channels and devices. Our IDT Global and IDT Express wholesale offerings enable communications service enterprises to provision and manage international voice and SMS services.

Contact:
Bill Ulrey
IDT Investor Relations
Phone: (973) 438-3838
E-mail: invest@idt.net

# # #

NEWARK, N.J., April 07, 2022 — National Retail Solutions (NRS), operator of the nation’s leading point-of-sale (POS) network and payment processing service for independent retailers, today announced a partnership with OnPoint, a leading provider of scan data programs for the independent and small chain C-store market.

Through the partnership, OnPoint will promote the NRS POS system and payment processing service to prospective C-store clients who require a robust POS solution to utilize OnPoint’s scan data programs and full calendar of center-store promotions.

“NRS and OnPoint provide complementary, synergistic offerings to help independent retailers successfully compete against larger retail chains,” said Elie Y. Katz, CEO of NRS. “Our partnership positions both companies to expand our respective networks while providing independent retailers with powerful tools to enhance profitability and extend market reach.”

NRS’ POS network currently provides over 16,000 retailers with powerful tools and services enabling them to compete effectively with large retail chains. NRS’ payment processing solution, NRS PAY, is a rapidly growing credit card and electronic payment processing service utilized by over 8,000 retail stores.

OnPoint’s partnership with NRS is supported by WAM, a nationwide network of distributors in the C-store space and the owner of OnPoint. OnPoint provides scan data services exclusively to the independent and small chain C-stores served by the WAM network.

“A significant portion of the retailers throughout the WAM network are looking for an affordable and easy to use POS system that is compatible with OnPoint, so that they can take advantage of all the value-added services that we provide. Our partnership with NRS provides a best-in-class, turn-key solution for this,” said Win Schiller, President of OnPoint.

About National Retail Solutions (NRS):

National Retail Solutions operates a point-of-sale (POS) terminal-based platform and digital payment processing service for independent retailers and bodega owners nationwide. Retailers utilize NRS offerings to process transactions and manage operations more effectively. Advertisers access the terminal’s digital display network to reach these retailers’ massive, predominantly urban customer bases. Consumer packaged goods (CPG) suppliers leverage the NRS platform to provision promotions, coupons and special offers to independent retailers. NRS is a subsidiary of IDT Corporation (NYSE: IDT).

About OnPoint:

OnPoint is a scan data service provider that was developed specifically to help independent and small chain convenience stores be more competitive and increase profitability. Our powerful scan data solution allows retailers to take advantage of the tobacco scan programs and center-store promotions from the best brands. OnPoint is owned by the WAM group.

About WAM:

WAM is a nation-wide network of 25 convenience store distributors servicing over 13,000 zip codes. These distributors do $10.8 billion in aggregate sales annually and service over 23,000 C-stores, making the WAM group the third largest distribution entity in the c-store channel.

All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.

Contact:
Bill Ulrey
IDT Investor Relations
Phone: (973) 438-3838
E-mail: invest@idt.net

# # #

Partners with LASCO for Convenient and Affordable Payments Across Jamaica

Newark, NJ., March 21, 2022 — IDT Corporation (NYSE: IDT) today announced that it has launched its BOSS Money remittance service to Jamaica. BOSS Money customers in the United States can now send cash to family and friends on the island for pick up in Jamaican Dollars within minutes at participating LASCO Financial Services Ltd.’s (LFSL) LASCO Money locations throughout the island.

“We are delighted to launch our money transfer service to Jamaica,” said Alfredo O’Hagan, IDT’s SVP for Consumer Payments. “Our partnership with LFSL makes sending cash to, and receiving cash in, Jamaica very easy. In the coming months, we’ll be adding other payout options as we work to become the ‘go-to’ money transfer service for the Jamaican diaspora.”

“This partnership with BOSS Money aligns with our quest to provide Jamaicans with convenient, safe and simple solutions that will suit their immediate needs,” said LFSL Managing Director, Jacinth Hall-Tracey. “Family members living in the U.S. will be able to send their loved ones money through Boss Money and receivers can collect from participating LASCO Money agent locations.”

Senders can transfer up to US$1,000 to Jamaica for just US$3.99 on the BOSS Money and Boss Calling apps and take advantage of BOSS Money’s competitive exchange rates. The apps are free on the App Store and at Google Play, and first-time senders on the apps pay no fees on transfers up to US$300. Customers in the United States can also send cash from over 1,000 BOSS Money retailers across the country.

With the launch of the Jamaica corridor, BOSS Money now offers remittances from the United States to 50 countries via 1,250 payers at over 328,000 locations worldwide.

About IDT Corporation:

IDT Corporation (NYSE: IDT) is a global provider of fintech, cloud communications, and traditional communications services. We help families to share, communicate and support each other across international borders. We also enable businesses to transact and communicate with their customers with enhanced intelligence and insight.

Our BOSS Money international money remittance and mobile top-up services offer convenient and reliable value transfers. Our BOSS Revolution calling service provides dependable voice and messaging communications globally. Our National Retail Solutions‘ (NRS) point-of-sale retail network enables independent retailers to operate and process transactions more effectively while providing advertisers and consumer marketers with unprecedented reach into underserved consumer markets. net2phone‘s unified communications as a service solution provides businesses with intelligently integrated cloud communications and collaboration tools across channels and devices. Our IDT Global and IDT Express wholesale offerings enable communications service enterprises to provision and manage international voice and SMS services.

Contact:
Bill Ulrey
IDT Investor Relations
Phone: (973) 438-3838
E-mail: invest@idt.net

Innovative mobile wallet provider utilizes Stellar blockchain-powered solution to serve unbanked communities in East Africa

NEWARK, NJ, March 14, 2022 — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, announced today that it has acquired Leaf Global Fintech Corporation (Leaf), an award-winning provider of digital wallet services in emerging markets currently serving unbanked customers in Rwanda, Uganda, and Kenya.

“Leaf has built a blockchain-based digital wallet for everyone – including the 2.4 billion people worldwide who use feature phones rather than smartphones – making it easy to securely store and share value within and across borders,” said Shmuel Jonas, CEO of IDT. “We are excited to partner with the Leaf team to help build out their network across Africa and the rest of the world.”

The Leaf Wallet is an innovative mobile platform available on smartphones, feature phones and other mobile devices through the Leaf Wallet apps or by utilizing a USSD interface accessed via a short code. The Leaf digital wallet enables customers to store, send, receive, and exchange currencies on their phones domestically and across borders.

“We are thrilled to join IDT and look forward to the opportunity to deploy Leaf globally through IDT’s network,” said Nat Robinson, Leaf’s Co-Founder and CEO. “We now have a tremendous opportunity to expand our service to traders, refugees, migrants, and other largely unbanked populations worldwide with affordable mobile technology.”

The Leaf platform leverages the Stellar network for storing and disseminating transaction data while maintaining value with stablecoins. Stellar is an open-source, decentralized blockchain network that connects global financial infrastructures. It is optimized for payments and specifically to support cross-border transactions. The Stellar platform enables Leaf to provide affordable, fast, mobile transactions to cost-sensitive populations that require high security and transparency.

“The IDT acquisition validates the groundbreaking work our team has done to deliver a world-class digital wallet to people with and without smartphones in multiple markets,” said Tori Samples, Leaf Co-Founder and CTO. “We are confident that Leaf’s stablecoin approach on Stellar will continue to lower transaction costs and increase accessibility for customers around the world.”

Leaf has won awards from the United Nations, The Vatican, Cisco, Fast Company, and was recently named to the global Inclusive Fintech 50 list.

About IDT Corporation:

IDT Corporation (NYSE: IDT) is a global provider of fintech, cloud and traditional communications services. We make it easy for families to communicate and support each other across international borders. We also enable businesses to transact and communicate with their customers with enhanced intelligence and insight.

Our BOSS Money international remittance and BOSS Revolution international calling services make sending money and speaking with friends and family around the world convenient and reliable. National Retail Solutions‘ (NRS) point-of-sale retail network enables independent retailers to operate and process transactions more effectively while providing advertisers and consumer marketers with unprecedented reach into underserved consumer markets. net2phone‘s communications-as-a-service solutions provide businesses with intelligently integrated cloud communications and collaboration tools across channels and devices. Our IDT Global and IDT Express wholesale offerings enable communications service enterprises to provision and manage international voice and SMS services.

About Leaf Global Fintech:

The Leaf Wallet is an innovative mobile wallet available on both smartphones (on the App Store and Google Play) and non-smartphones through a USSD interface accessed via a short code. Leaf enables customers to store, send, receive, and exchange currencies on their phones, domestically and across borders. Currently, Leaf is operational in three countries across East Africa.

Leaf has received support from the UNICEF Venture Fund, the U.S. National Science Foundation, Techstars, and the Stellar Development Foundation. Learn more at www.leafglobalfintech.com.

Contact:

Bill Ulrey
IDT Investor Relations
Phone: (973) 438-3838
E-mail: invest@idt.net

# # #

NEWARK, NJ, March 07, 2022 — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, today reported results for the second quarter of its 2022 fiscal year, the three months ended January 31, 2022.

SECOND QUARTER FISCAL YEAR 2022 (2Q22) HIGHLIGHTS

(Throughout this release, results are for 2Q22 and are compared to 2Q21 unless otherwise noted. Earnings per share (EPS), loss per share, Non-GAAP EPS*, and Non-GAAP loss per share* are per diluted share. Please see the final page of this release for important supplemental information on asterisked metrics and results.)

• Consolidated revenue decreased 0.8% to $337 million from $340 million. Key business unit revenue included:
  • National Retail Solutions (NRS) revenue increased 103.6% to $10.6 million.
  • net2phone subscription revenue increased 32.3% to $12.5 million.**
  • Money Transfer revenue decreased 6.2% to $12.5 million due to transitory foreign exchange market conditions that materially improved revenue in 2Q21. Absent that impact, Money Transfer revenue would have increased by 48%.
  • Within the Traditional Communications segment, Mobile Top-Up revenue increased 20.4% to $116.2 million while segment revenue decreased 3.2% to $300.4 million. Segment revenue-less-direct-cost-of-revenue increased 6.2% to $52.8 million.
• Consolidated revenue-less-direct-cost-of-revenue increased 12.9% to $80 million from $71 million, the tenth consecutive quarter of year-over-year increases.
• Consolidated income from operations increased 6.9% to $13.8 million from $12.9 million.
• Adjusted EBITDA* increased 14.3% to $18.7 million from $16.3 million. Adjusted EBITDA* less capital expenditures (CAPEX)*** increased 16.3% to $14.0 million from $12.1 million.
• EPS was $0.28 compared to EPS of $0.51. Non-GAAP EPS* was $0.33 compared to Non-GAAP EPS* $0.49.
• Following the quarter close, net2phone acquired Integra CCS, a rapidly growing contact-center-as-a-service (CCaaS) provider operating in the Americas and Europe, for a consideration of up to $15 million in cash and stock inclusive of earnouts.

REMARKS BY SHMUEL JONAS, CEO

“Our second quarter financial results were highlighted by year over year improvements in gross profit, income from operations and Adjusted EBITDA driven by the continued expansion of our growth businesses.

“NRS accelerated the growth of its customer base, adding nearly 1400 net POS activations and 1200 NRS Pay accounts during the quarter. As of January 31^st, NRS served approximately 16,500 active POS terminals and 8,000 NRS Pay accounts. NRS revenue increased 104% from the year-ago quarter to $10.6 million, led by triple-digit gains from advertising and merchant services revenue. We are still in the early stages of NRS’ development in terms of our addressable markets, new service offerings, and monetization of our current offerings.

“At our net2phone-UCaaS segment, subscription revenue increased 32% year-over-year to $12.5 million. Growth was strongest in our Latin American markets, particularly in Mexico where we continue to find success with larger customers. Last week, we closed on the acquisition of Integra, a fast-growing CCaaS provider. We will incorporate Integra’s CCaaS service with net2phone’s UCaaS solutions to create a higher value, integrated offering that we expect will drive growth — and significantly enhance net2phone’s unit economics — as we become more competitive upmarket.

“We are now focused on completing the previously announced spin-off of net2phone to our stockholders and are working to complete it by the end of the current fiscal year on July 31^st.

“Money Transfer transactions increased 21% year-over-year while revenue decreased 6% to $12.5 million. On an “apples-to-apples” basis, adjusting for the impact of transitory foreign exchange that improved 2Q21 results, 2Q22 transactions would have increased 36% and revenue would have increased by 48% from the year-ago quarter.

“Although our Traditional Communications segment’s revenue decreased 3.2% year-over-year to $300 million, revenue-less-direct-cost-of-revenue increased 6% to $53 million, led by the continued expansion of our Mobile Top-Up business.”

CONSOLIDATED RESULTS

Results (in millions, except EPS)		2Q22				1Q22				2Q21				2Q22 – 2Q21 change(%/$)
Revenue		$	337			$	370			$	340				(0.8	)%
Revenue-less-direct-cost-of-revenue		$	80			$	78			$	71				+12.9	%
Revenue-less-direct-cost-of-revenue as a percentage of revenue***			23.7	%			21.2	%			20.8	%			+290 bp
SG&A expense		$	61			$	60			$	54				+12.5	%
Depreciation and amortization		$	4.4			$	4.4			$	4.5				+(1.9)	%
Income from operations		$	13.8			$	13.8			$	12.9				+6.9	%
Adjusted EBITDA*		$	18.7			$	18.4			$	16.3				+14.3	%
Adjusted EBITDA* less CAPEX***		$	14.0			$	14.0			$	12.1				+16.3	%
Net income (loss) attributable to IDT		$	7.5			$	(2.5	)		$	13.1			$	(5.6	)
Earnings (loss) per diluted share		$	0.28			$	(0.10	)		$	0.51			$	(0.23	)
Non-GAAP net income (loss)*		$	8.8			$	(2.0	)		$	12.7			$	(3.9	)
Non-GAAP earnings (loss) per share*		$	0.33			$	(0.08	)		$	0.49			$	(0.16	)

RESULTS BY SEGMENT
(Results are for 2Q22 and are compared to 2Q21 except where otherwise noted)

(in millions)		Fintech												net2phone-UCaaS												Traditional Communications
		2Q22				1Q22				2Q21				2Q22				1Q22				2Q21				2Q22				1Q22				2Q21
Revenue		$	23.1			$	22.6			$	18.5			$	13.5			$	12.9			$	10.9			$	300.4			$	334.6			$	310.4
Revenue-less-direct-cost-of-revenue		$	15.8			$	15.3			$	12.0			$	11.1			$	10.4			$	8.8			$	52.8			$	52.7			$	49.8
SG&A expense		$	15.3			$	14.8			$	11.8			$	13.0			$	13.3			$	11.2			$	30.4			$	30.0			$	29.3
(Loss) income from operations		$	(0.2	)		$	0.0			$	(0.2	)		$	(2.9	)		$	(4.2	)		$	(3.7	)		$	19.9			$	20.1			$	19.1
Adjusted EBITDA*		$	0.4			$	0.5			$	0.2			$	(1.9	)		$	(2.9	)		$	(2.4	)		$	22.4			$	22.7			$	20.5
Adjusted EBITDA* less CAPEX***		$	(0.8	)		$	(0.7	)		$	(1.0	)		$	(3.2	)		$	(4.2	)		$	(3.6	)		$	20.3			$	20.9			$	18.6

Fintech

Fintech comprises National Retail Solutions (NRS), an operator of a nationwide Point-Of-Sale (POS) retail network providing merchant services, digital advertising, transaction data, and ancillary services, and BOSS Revolution Money Transfer, a provider of international money remittances.

In 2Q22 and 2Q21, the Fintech segment accounted for 6.8% and 5.4% of IDT’s consolidated revenue and 19.8% and 17.0% of IDT’s consolidated revenue-less-direct-cost-of-revenue, respectively.

NRS Revenue and KPIs:

Revenue $ in thousands		2Q22				1Q22				2Q21			2Q22 -2Q21 change %
POS terminals, active – end of period			16,500				15,100				12,000				37	%
Payment processing accounts – end of period			8,000				6,800				3,900				105	%
NRS recurring revenue
Merchant services and other		$	3,810			$	3,112			$	1,561				+144	%
Advertising & data			3,901				4,306				1,819				+114	%
SaaS fees			1,318				1,187				757				+74	%
Total recurring revenue		$	9,029			$	8,605			$	4,137				+118	%
POS terminal sales			1,591				1,467				1,081				+47	%
Total NRS revenue		$	10,620			$	10,072			$	5,218				+104	%
Monthly average recurring revenue per terminal (excl. POS terminal sales revenue)***		$	190			$	196			$	114				+66	%

• As of January 31, 2022, NRS’ POS terminal network comprised approximately 16,500 active POS terminals, an increase of 37% compared to a year earlier, and approximately 8,000 payment processing accounts, an increase of 105%.
• NRS revenue increased 104% to $
  10.6 million from $5.2 million and recurring revenue increased by 118% to $9.0 million from $4.1 million. The increases were driven by the expansion of the NRS POS and payment processing networks and increased merchant services and digital-out-of-home (DOOH) advertising & data sales.
• NRS monthly average recurring revenue per terminal increased to $190 from $114.
• During 2Q22, NRS launched its eWIC processing service, enabling independent retailers to accept and process WIC benefits in electronic format.

Money Transfer Take-Aways:

• Transactions increased 21% to 2.20 million from 1.83 million in the year-ago period.
• Revenue decreased 6% to $12.5 million from $13.3 million in 2Q21. Excluding the impact of previously disclosed foreign exchange market conditions that positively affected comparative 2Q21results, transactions would have increased 36% and revenue would have increased 48%.
• BOSS Money continued to expand its global payments network by opening remittance services to Jamaica, Togo, and Sierra Leone. BOSS Money now offers remittances from the US to 50 countries via 1,250 payers at over 328,000 locations worldwide.

net2phone-UCaaS

In 2Q22 and 2Q21, the net2phone-UCaaS segment accounted for 4.0% and 3.2% of IDT’s consolidated revenue and 14.0% and 12.5% of IDT’s consolidated revenue-less-direct-cost-of-revenue, respectively.

net2phone-UCaaS Takeaways:

• Total seats served increased 35% to 258,000 at January 31, 2022, from 190,000 a year earlier.
• Subscription revenue*** increased 32% to $12.5 million from $9.5 million, led by strong growth in both net2phone’s South and North American regions.
• Subscription revenue less direct cost of revenue as a percentage of subscription revenue decreased slightly to 85.5% from 86.0% in 2Q21.
• During 2Q22, net2phone announced a strategic partnership with Avant, a leading distributor for next generation technologies.

Traditional Communications

In 2Q22 and 2Q21, the Traditional Communications segment accounted for 89.1% and 91.4% of IDT’s consolidated revenue and 66.2% and 70.4% of IDT’s consolidated revenue-less-direct-cost-of-revenue, respectively.

Traditional Communications Takeaways:

• Mobile Top-Up revenue increased 20.4% to $116.2 million from $96.6 million, primarily as a result of an increase in B2B sales resulting from a wholesale market opportunity that began during 3Q21 and has subsequently narrowed considerably. Sales via the direct-to-consumer channel continued to increase, partially offset by a decrease in sales via the retail channel.
• BOSS Revolution Calling revenue decreased 12.2% to $100.0 million from $113.9 million while minutes-of-use decreased 15.5% compared to the year-ago quarter. The rates of decline were higher than in recent quarters as the increased demand associated with the COVID pandemic diminished.
• IDT Global carrier services revenue decreased 16.1% to $73.1 million from $87.2 million reflecting a 30.3% decrease in minutes-of-use partially offset by an increase in revenue per minute.
• Traditional Communications revenue-less-direct-cost-of-revenue increased 6.2% to $52.8 million from $49.8 million reflecting the increase in mobile top-up revenue and increased margins from all three of Traditional Communications’ primary business lines.
• Traditional Communications’ Adjusted EBITDA* less CAPEX** increased 9.2% to $20.3 million from $18.6 million.

NOTES ON FINANCIAL STATEMENTS

Consolidated results for all periods presented include corporate overhead. Corporate G&A expense increased to $2.3 million in 2Q22 from $2.0 million in 2Q21.

As of January 31, 2022, IDT held $148.3 million in cash, cash equivalents, debt securities, and current equity investments. Current assets totaled $387.0 million and current liabilities totaled $327.4 million.

Net cash provided by operating activities during 2Q22 was $17.5 million compared to $6.8 million during 2Q21. Exclusive of changes in customer deposit balances at our Gibraltar-based bank, net cash provided by operating activities during 2Q22 was $6.3 million compared to $17.4 million during 2Q21.

Capital expenditures increased to $4.6 million in 2Q22 from $4.3 million in 2Q21.

IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION

This release is available for download in the “Investors & Media” section of the IDT Corporation website (https://www.idt.net/investors-and-media) and has been filed on a current report (Form 8-K) with the SEC.

IDT will host an earnings conference call beginning at 5:30 PM Eastern with management’s discussion of results, outlook, and strategy followed by Q&A with investors. To listen to the call and participate in the Q&A, dial 1-888-506-0062 (toll-free from the US) or 1-973-528-0011 (international) and request the IDT Corporation call (participant access code: 897234).

A replay of the conference call will be available approximately three hours after the call concludes through March 14, 2022. To access the call replay, dial 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and provide this replay number: 44495. The replay will also be accessible via streaming audio at the IDT investor relations website.

ABOUT IDT:

IDT Corporation (NYSE: IDT) is a global provider of fintech, cloud and traditional communications services. We make it easy for families to communicate and support each other across international borders. We also enable businesses to transact and communicate with their customers with enhanced intelligence and insight.

Our BOSS Money international remittance and BOSS Revolution international calling services make sending money and speaking with friends and family around the world convenient and reliable. National Retail Solutions‘ (NRS) point-of-sale retail network enables
independent retailers to operate and process transactions more effectively while providing advertisers and consumer marketers with unprecedented reach into underserved consumer markets. net2phone‘s communications-as-a-service solutions provide businesses with intelligently integrated cloud communications and collaboration tools across channels and devices. Our IDT Global and IDT Express wholesale offerings enable communications service enterprises to provision and manage international voice and SMS services.

All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.

CONTACT:

IDT Corporation Investor Relations
Bill Ulrey
william.ulrey@idt.net
973-438-3838

IDT CORPORATION

CONSOLIDATED BALANCE SHEETS

		January 31, 2022				July 31, 2021
		(Unaudited)
		(in thousands)
Assets
Current assets:
Cash and cash equivalents		$	104,268			$	107,147
Restricted cash and cash equivalents			116,284				119,769
Debt securities			15,490				14,012
Equity investments			28,494				42,434
Trade accounts receivable, net of allowance for doubtful accounts of $4,896 at January 31, 2022 and $4,438 at July 31, 2021			53,247				46,644
Disbursement prefunding			29,226				27,656
Prepaid expenses			17,408				13,694
Other current assets			22,582				16,779
Total current assets			386,999				388,135
Property, plant, and equipment, net			31,639				30,829
Goodwill			15,081				14,897
Other intangibles, net			6,940				7,578
Equity investments			8,355				11,654
Operating lease right-of-use assets			7,100				7,671
Deferred income tax assets, net			39,539				41,502
Other assets			10,241				10,389
Total assets		$	505,894			$	512,655
Liabilities and equity
Current liabilities:
Trade accounts payable		$	23,800			$	24,502
Accrued expenses			122,372				129,085
Deferred revenue			40,592				42,293
Customer deposits			109,862				115,524
Other current liabilities			30,744				27,930
Total current liabilities			327,370				339,334
Operating lease liabilities			5,014				5,473
Other liabilities			467				1,234
Total liabilities			332,851				346,041
Commitments and contingencies
Redeemable noncontrolling interest			10,063				–
Equity:
IDT Corporation stockholders’ equity:
Preferred stock, $.01 par value; authorized shares-10,000; no shares issued			–				–
Class A common stock, $.01 par value; authorized shares-35,000; 3,272 shares issued and 1,574 shares outstanding at January 31, 2022 and July 31, 2021			33				33
Class B common stock, $.01 par value; authorized shares-200,000; 26,684 and 26,379 shares issued and 24,292 and 24,187 shares outstanding at January 31, 2022 and July 31, 2021, respectively			267				264
Additional paid-in capital			278,613				278,021
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 2,392 and 2,192 shares of Class B common stock at January 31, 2022 and July 31, 2021, respectively			(69,387	)			(60,413	)
Accumulated other comprehensive loss			(11,088	)			(10,183	)
Accumulated deficit			(37,843	)			(42,858	)
Total IDT Corporation stockholders’ equity			160,595				164,864
Noncontrolling interests			2,385				1,750
Total equity			162,980				166,614
Total liabilities and equity		$	505,894			$	512,655

IDT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended January 31,								Six Months Ended January 31,
		2022				2021				2022				2021
		(in thousands, except per share data)
Revenues		$	337,058			$	339,766			$	707,141			$	683,191
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)			257,325				269,145				548,950				542,319
Selling, general and administrative (i)			61,070				54,298				121,177				106,442
Depreciation and amortization			4,378				4,464				8,825				8,956
Severance			29				143				67				255
Total costs and expenses			322,802				328,050				679,019				657,972
Other operating (expense) gain, net			(442	)			1,207				(530	)			955
Income from operations			13,814				12,923				27,592				26,174
Interest income, net			119				139				132				98
Other (expense) income, net			(2,949	)			3,170				(19,165	)			1,792
Income before income taxes			10,984				16,232				8,559				28,064
Provision for income taxes			(2,734	)			(3,027	)			(2,648	)			(6,444	)
Net income			8,250				13,205				5,911				21,620
Net (income) attributable to noncontrolling interests			(763	)			(97	)			(896	)			(224	)
Net income attributable to IDT Corporation		$	7,487			$	13,108			$	5,015			$	21,396
Earnings per share attributable to IDT Corporation common stockholders:
Basic		$	0.29			$	0.52			$	0.20			$	0.84
Diluted		$	0.28			$	0.51			$	0.19			$	0.83
Weighted-average number of shares used in calculation of earnings per share:
Basic			25,652				25,362				25,609				25,448
Diluted			26,542				25,713				26,580				25,787
(i) Stock-based compensation included in selling, general and administrative expenses		$	310			$	434			$	595			$	940

IDT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

		Six Months Ended January 31,
		2022				2021
		(in thousands)
Operating activities
Net income		$	5,911			$	21,620
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			8,825				8,956
Deferred income taxes			1,683				5,881
Provision for doubtful accounts receivable			1,289				1,069
Net unrealized loss (gain) from marketable securities			16,242				(286	)
Stock-based compensation			595				940
Other			2,850				269
Change in assets and liabilities:
Trade accounts receivable			(8,045	)			(7,330	)
Disbursement prefunding, prepaid expenses, other current assets, and other assets			(8,551	)			4,965
Trade accounts payable, accrued expenses, other current liabilities, and other liabilities			(6,313	)			1,631
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)			(1,862	)			(11,136	)
Deferred revenue			(960	)			(968	)
Net cash provided by operating activities			11,664				25,611
Investing activities
Capital expenditures			(8,991	)			(8,825	)
Purchase of convertible preferred stock in equity method investment			(1,051	)			–
Payments for acquisitions, net of cash acquired			(100	)			(2,388	)
Purchase of Rafael Holdings, Inc. Class B common stock and warrant			–				(5,000	)
Purchases of debt securities and equity investments			(10,825	)			(34,436	)
Proceeds from maturities and sales of debt securities and redemptions of equity investments			6,068				11,575
Net cash used in investing activities			(14,899	)			(39,074	)
Financing activities
Distributions to noncontrolling interests			(198	)			(418	)
Proceeds from other liabilities			2,301				–
Repayment of other liabilities.			(1,291	)			(56	)
Proceeds from borrowings under revolving credit facility			2,488				–
Repayment of borrowings under revolving credit facility.			(2,488	)			–
Proceeds from sale of redeemable equity in subsidiary			10,000				–
Proceeds from exercise of stock options			–				686
Repurchases of Class B common stock			(8,974	)			(4,192	)
Net cash provided by (used in) financing activities			1,838				(3,980	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents			(4,967	)			5,560
Net decrease in cash, cash equivalents, and restricted cash and cash equivalents			(6,364	)			(11,883	)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period			226,916				201,222
Cash, cash equivalents, and restricted cash and cash equivalents at end of period		$	220,552			$	189,339
Supplemental schedule of non-cash investing and financing activities
Liabilities incurred for acquisition		$	–			$	393

Reconciliation of Non-GAAP Financial Measures for the
Second Quarter Fiscal 2022 and 2021

In
addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), IDT also disclosed, for 2Q22, 1Q21, and 2Q21, Adjusted EBITDA, non-GAAP net income (loss), non-GAAP earnings per diluted share (EPS), and non-GAAP loss per share, all of which are non-GAAP measures. Generally, a non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

IDT’s measure of Adjusted EBITDA consists of revenue less direct cost of revenues and selling, general and administrative expense. Another way of calculating Adjusted EBITDA is to start with income (loss) from operations, add depreciation and amortization, severance expense, and other operating expense, and deduct other operating gains.

IDT’s measure of non-GAAP net income (loss) starts with net income (loss) in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expense, and deducts other operating gains.

These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2022 and fiscal 2021 periods.

IDT’s measures of non-GAAP EPS and non-GAAP loss per share are calculated by dividing non-GAAP net income (loss) by the diluted weighted-average shares.

Management believes that IDT’s Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share are measures which provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of IDT’s or the relevant segment’s core operating results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share to evaluate operating performance in relation to IDT’s competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, IDT has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting.

Management refers to Adjusted EBITDA, as well as the GAAP measures income (loss) from operations and net income (loss), on a segment and/or consolidated level to facilitate internal and external comparisons to the segments’ and IDT’s historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.

While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or capitalized in prior periods. IDT’s Adjusted EBITDA, which is exclusive of depreciation and amortization, is a useful indicator of its current performance.

Severance expense is excluded from the calculation of Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share. Severance expense is reflective of decisions made by management in each period regarding the aspects of IDT’s and its segments’ businesses to be focused on in light of changing market realities and other factors. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of IDT’s core and continuing operations.

Other operating (expense) gain, net, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share. Other operating (expense) gain, net includes legal fees net of insurance claims related to Straight Path Communications Inc.’s stockholders’ putative class action and derivative complaint, expense for the indemnification of a net2phone cable telephony customer related to patent infringement claims brought against the customer, a gain from the write-off of a contingent consideration liability, expense for other legal and regulatory matters, and a gain from the sale of IDT’s rights under a class action lawsuit. From time-to-time, IDT may have gains or incur costs related to non-routine legal and regulatory matters, however, these various items generally do not occur each quarter. IDT believes the gain and losses from these non-routine matters are not components of IDT’s or the relevant segment’s core operating results.

The other calculation of Adjusted EBITDA consists of revenue less direct cost of revenues and selling, general and administrative expense. As the other excluded items are not reflected in this calculation, they are excluded automatically and there is no need to make additional adjustments. This calculation results in the same Adjusted EBITDA amount and its utility and significance is as explained above.

Stock-based compensation recognized by IDT and other companies may not be comparable because of the variety of types of awards as well as the various valuation methodologies and subjective assumptions that are permitted under GAAP. Stock-based compensation is excluded from IDT’s calculation of non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share because management believes this allows investors to make more meaningful comparisons of the operating results per share of IDT’s core business with the results of other companies. However, stock-based compensation will continue to be a significant expense for IDT for the foreseeable future and an important part of employees’ compensation that impacts their performance.

Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share should be considered in addition to, not as a substitute for, or superior to, income (loss) from operations, cash flow from operating activities, net income (loss), basic and diluted earnings per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, IDT’s measurements of Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share may not be comparable to similarly titled measures reported by other companies.

Following are reconciliations of Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, and non-GAAP loss per share to the most directly comparable GAAP measure, which are, (a) for Adjusted EBITDA, income (loss) from operations for IDT’s reportable segments and net income (loss) for IDT on a consolidated basis, (b) for non-GAAP net income (loss), net income (loss), and (c) for non-GAAP EPS and non-GAAP loss per share, diluted earnings (loss) per share.

IDT Corporation Reconciliation of Adjusted EBITDA to Net Income (Loss) (unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions

		Total IDT Corporation				Traditional Communica-tions				net2phone-UCaaS				Fintech				Corporate
Three Months Ended January 31, 2022 (2Q22)
Adjusted EBITDA		$	18.7			$	22.4			$	(1.9	)		$	0.4			$	(2.3	)
Subtract (Add):
Depreciation and amortization			4.4				2.5				1.3				0.6				–
Severance expense			–				–				–				–				–
Other operating expense (gain), net			0.4				–				(0.3	)			–				0.7
Income (loss) from operations			13.8			$	19.9			$	(2.9	)		$	(0.2	)		$	(3.0	)
Interest income, net			0.1
Other expense, net			(2.9	)
Income before income taxes			11.0
Provision for income taxes			(2.7	)
Net income			8.3
Net income attributable to noncontrolling interests			(0.8	)
Net income attributable to IDT Corporation		$	7.5

		Total IDT Corporation				Traditional Communica-tions				net2phone-UCaaS				Fintech				Corporate
Three Months Ended October 31, 2021 (1Q22)
Adjusted EBITDA		$	18.4			$	22.7			$	(2.9	)		$	0.5			$	(2.0	)
Subtract:
Depreciation and amortization			4.4				2.5				1.3				0.6				–
Severance expense			–				–				–				–				–
Other operating expense, net			0.1				–				–				–				0.1
Income (loss) from operations			13.8			$	20.1			$	(4.2	)		$	–			$	(2.1	)
Interest income, net			–
Other expense, net			(16.2	)
Loss before income taxes			(2.4	)
Benefit from income taxes			0.1
Net loss			(2.3	)
Net income attributable to noncontrolling interests			(0.2	)
Net loss attributable to IDT Corporation		$	(2.5	)

IDT Corporation
Reconciliation of Adjusted EBITDA to Net Income
(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions.

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		Total IDT Corporation				Traditional Communic-ations				net2phone-UCaaS				Fintech				Corporate
Three Months Ended January 31, 2021 (2Q21)
Adjusted EBITDA		$	16.3			$	20.5			$	(2.4	)		$	0.2			$	(2.0	)
Subtract (Add):
Depreciation and amortization			4.5				2.8				1.2				0.4				–
Severance expense			0.1				0.1				–				–				–
Other operating (gain) expense, net			(1.2	)			(1.6	)			0.1				–				0.3
Income (loss) from operations			12.9			$	19.1			$	(3.7	)		$	(0.2	)		$	(2.3	)
Interest income, net			0.1
Other income, net			3.2
Income before income taxes		16.2
Provision for income taxes			(3.0	)
Net income			13.2
Net income attributable to noncontrolling interests			(0.1	)
Net income attributable to IDT Corporation		$	13.1

IDT Corporation
Reconciliations of Net Income (Loss) to Non-GAAP Net Income (Loss) and Earnings (Loss) per share to Non-GAAP EPS or Non-GAAP Loss per share
(unaudited) in millions, except per share data. Figures may not foot due to rounding to millions.

		Total IDT Corporation				Traditional Communic-ations				net2phone-UCaaS				Fintech				Corporate
Three Months Ended January 31, 2021 (2Q21)
Adjusted EBITDA		$	16.3			$	20.5			$	(2.4	)		$	0.2			$	(2.0	)
Subtract (Add):
Depreciation and amortization			4.5				2.8				1.2				0.4				–
Severance expense			0.1				0.1				–				–				–
Other operating (gain) expense, net			(1.2	)			(1.6	)			0.1				–				0.3
Income (loss) from operations			12.9			$	19.1			$	(3.7	)		$	(0.2	)		$	(2 .3	)
Interest income, net			0.1
Other income, net			3.2
Income before income taxes			16.2
Provision for income taxes			(3.0	)
Net income			13.2
Net income attributable to noncontrolling interests			(0.1	)
Net income attributable to IDT Corporation		$	13.1

Explanation of Key Performance Metrics

net2phone-UCaaS’ cloud communications offering is priced on a per-seat basis. The number of seats served and
subscription revenue trends and comparisons between periods are used in the analysis of net2phone-UCaaS’ revenues and direct cost of revenues.

Beginning 2Q22, net2phone-UCaaS’ subscription revenue no longer includes revenue generated by a legacy SIP trunking offering in Brazil, which will be included with other non-subscription offerings in total net2phone-UCaaS’ revenue. Comparative information has been restated in all periods to conform to the current presentation. Following is a reconciliation of subscription revenue to the current standard:

(in millions)		1Q21				2Q21				3Q21				4Q21				1Q22				2Q22
Subscription revenue as previously reported		$	9.1			$	10.3			$	10.9			$	11.9			$	12.5			$	13.2
Less: Legacy SIP trunking revenue in Brazil			0.8				0.8				0.9				0.9				0.8				0.7
Subscription revenue restated		$	8.3			$	9.5			$	10.0			$	11.0			$	11.7			$	12.5

Revenue-less-direct-cost-of-revenue as a percentage of revenue is a financial metric that measures changes in our revenue relative to changes in direct cost of revenue during the same period. Revenue and direct cost of revenue in this metric are from IDT’s consolidated statements of operations in accordance with GAAP. Revenue-less-direct-cost-of-revenue as a percentage of revenue is a ratio in which revenue-less-direct-cost-of-revenue is the numerator and revenue is the denominator. It is useful for monitoring trends in the generation of revenue as well as for evaluating the net contribution of IDT’s revenue.

Adjusted EBITDA less CAPEX is also a financial metric, which is calculated by deriving Adjusted EBITDA as described above and subtracting capital expenditures in accordance with GAAP as reported in the consolidated statements of cash flows. Management uses Adjusted EBITDA less CAPEX to evaluate the level of capital investment needed to support operations, and as a reasonable proxy for the cash generated by IDT’s businesses. Because IDT’s capital expenditures reflect an allocation of capital for longer-term growth, IDT seeks to strike an appropriate balance between near-term and long-term financial performance as reflected in Adjusted EBITDA less CAPEX. IDT’s measurement of Adjusted EBITDA less CAPEX may not be comparable to similarly titled measures reported by other companies.

Monthly Average Recurring Revenue per Terminal is also a financial metric. Monthly Average Recurring Revenue per Terminal is calculated by dividing NRS’ revenue in accordance with GAAP during a period, excluding revenue from POS terminal sales, by the average number of active POS terminals during the period. The result is divided by three when the period is a fiscal quarter. The average number of active POS terminals is calc
ulated by adding the beginning and ending number of active POS terminals during the period and dividing by two. Monthly Average Recurring Revenue per Terminal is useful for comparisons of NRS’ revenue per customer to prior periods and to competitors and others in the market, as well as for forecasting future revenue from the customer base.

Supplemental Information

* Throughout this release, Adjusted EBITDA, Non-GAAP net income (loss) and Non-GAAP earnings (loss) per share are Non-GAAP measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measures earlier in this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measure.

** net2phone subscription revenue is a key performance metric and no longer includes revenue generated by a legacy SIP trunking offering in Brazil. Please refer to the Explanation of Key Performance Metrics on the preceding page of this release for an explanation of this metric and a reconciliation of subscription revenue in prior periods to the current standard.

*** Throughout this release, revenue-less-direct-cost-of-revenue as a percentage of revenue, Adjusted EBITDA* less CAPEX, and Monthly Average Recurring Revenue per Terminal are key performance metrics. Please refer to the Explanation of Key Performance Metrics on the preceding page of this release for an explanation of these metrics.

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