Highest Level of Quarterly Income from Operations since 2015
Highest Level of Quarterly Adjusted EBITDA in Company History
NRS, BOSS Money and net2phone Businesses Drive Robust, YoY Increase in EPS

NEWARK, NJ, Dec. 05, 2022 — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, today reported results for the first quarter of its fiscal year 2023, the three months ended October 31, 2022.

FIRST QUARTER FISCAL YEAR 2023 HIGHLIGHTS

(Throughout this release, unless otherwise noted, results for the first quarter of fiscal year 2023 (1Q23) are compared to the first quarter of fiscal year 2022 (1Q22). All earnings per share (EPS) and other ‘per share’ results are per diluted share unless otherwise noted.

Effective August 1, 2022, IDT revised its reportable business segments. Results of a new NRS segment were previously included in the Fintech segment and certain lines of business were reclassified to the Fintech segment from the Traditional Communications segment. Comparative segment information has been reclassified and restated in all periods presented.)

• National Retail Solutions (NRS) recurring revenue^* increased 107% to $17.8 million. Active POS terminals increased by approximately 1,400 during 1Q23 to approximately 20,800 at the end of the quarter;
• BOSS Money remittance revenue increased 45% to $17.6 million. Transaction volume increased by 35% to 2.87 million;
• net2phone increased subscription revenue^* 33% to $15.5 million and achieved positive Adjusted EBITDA. Seats served increased by 18,000 sequentially to end 1Q23 with approximately 309,000;
• Consolidated revenue decreased 13% to $322 million, mostly as a result of a 20% decrease in the Traditional Communications segment’s revenue;
• Consolidated income from operations increased 47% to $20.2 million;
• Net income attributable to IDT increased to $11.0 million from a net loss of $2.5 million. The loss in the year-ago quarter included an unrealized $12.5 million loss on the mark-to-market value of the Company’s investment in Rafael Holdings, Inc.’s Class B common stock;
• Consolidated Adjusted EBITDA increased 33% to $24.3 million; and
• EPS increased to $0.43 from a loss per share of $0.10. Non-GAAP EPS increased to $0.43 from a loss per share of $0.08;
• During 1Q23, IDT repurchased 203,436 shares of its Class B common stock in the open market for approximately $5 million.

Adjusted EBITDA, Non-GAAP net income (loss), 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 later in this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measure. Please see the final page of this release for the explanation of asterisked key performance metrics.

REMARKS BY SHMUEL JONAS, CEO

“In the first quarter, we achieved our second consecutive quarter of record Adjusted EBITDA. Our rapidly expanding NRS, BOSS Money and net2phone businesses contributed twenty-five percent of our consolidated Adjusted EBITDA in the period, and their continued expansion positions us for significantly enhanced profitability in the coming years.

“We are focused on improving the bottom-line performance of all our businesses. And this quarter both net2phone and the Fintech segment, which now primarily tracks the performance of our BOSS Money remittance business, turned the corner and generated positive Adjusted EBITDA. NRS also had another very good quarter, more than tripling its Adjusted EBITDA contribution compared to the year-ago quarter.”

CONSOLIDATED RESULTS

Results (in millions, except EPS)			1Q23				4Q22				1Q22				1Q23 – 1Q22 change (%/$)
Revenue		$	322			$	329			$	370				(13.0	)%
Direct cost of revenue		$	232			$	238			$	292				(20.6	)%
SG&A expense		$	66			$	67			$	60				+9.6%
Depreciation and amortization		$	4.8			$	4.8			$	4.4				+7.7%
Income from operations		$	20.2			$	19.2			$	13.8				+46.8%
Net income (loss) attributable to IDT		$	11.0			$	17.2			$	(2.5	)			+$13.5
Adjusted EBITDA		$	24.3			$	24.1			$	18.4				+32.5%
EPS		$	0.43			$	0.66			$	(0.10	)			+$0.53
Non-GAAP net income (loss)		$	10.9			$	17.5			$	(2.2	)			+$13.1
Non-GAAP EPS		$	0.43			$	0.67			$	(0.08	)			+$0.51

RESULTS BY SEGMENT

 

A table later in this release provides additional quarterly results by segment including those impacted by the reclassification referred to earlier in this release: NRS, Fintech, and Traditional Communications. Results for the net2phone segment were not impacted by the reclassification.

(in millions)		NRS								net2phone								Fintech								Traditional Communications
			1Q23				1Q22				1Q23				1Q22				1Q23				1Q22				1Q23				1Q22
Revenue		$	19.3			$	10.1			$	17.0			$	12.9			$	19.9			$	14.2			$	265.7			$	332.9
Direct cost of revenue		$	2.0			$	1.4			$	2.8			$	2.5			$	8.3			$	6.0			$	218.5			$	281.8
SG&A expense		$	11.6			$	7.1			$	13.8			$	13.3			$	11.1			$	9.3			$	27.4			$	28.3
Income (loss) from operations		$	5.2			$	1.3			$	(1.1	)		$	(4.2	)		$	1.5			$	(1.6	)		$	17.3			$	20.3
Adjusted EBITDA		$	5.7			$	1.5			$	0.3			$	(2.9	)		$	0.5			$	(1.0	)		$	19.7			$	22.8

 

NRS

 

National Retail Solutions (NRS) is an operator of a nationwide point-of-sale (POS) network providing independent retailers with store management software, and with credit, debit, and other electronic payment processing as well as ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home (DOOH) advertising and transaction data.

In 1Q23 and 1Q22, NRS contributed 6.0% and 2.7% of IDT’s consolidated revenue, respectively.

NRS Results   ($ in thousands – except per terminal figures. Terminals and accounts at end of period)
			1Q23				4Q22				1Q22				1Q23-1Q22 change %
Terminals and payment processing accounts
POS terminals			20,800				19,400				15,200				+37%
Payment processing accounts			11,300				10,300				6,800				+66%
Recurring revenue
Advertising & Data		$	9,695			$	10,316			$	4,306				+125%
Merchant Services and other		$	6,370			$	5,766			$	3,112				+105%
SaaS fees		$	1,760			$	1,591			$	1,187				+48%
Total recurring revenue		$	17,825			$	17,673			$	8,605				+107%
POS terminal sales		$	1,488			$	1,551			$	1,467				+1%
Total revenue		$	19,313			$	19,224			$	10,072				+92%
Monthly average recurring revenue per terminal*		$	296			$	316			$	196				+51%

 

NRS Take-Aways:

 

• The year-over-year increases in NRS’ revenue and income from operations reflect increases in high-margin recurring revenue categories led by Advertising & Data, as well as the significant expansion of the NRS POS network.
• In November 2022, NRS announced a partnership with Uber Technologies, Inc., enabling NRS retailers to offer same-day delivery to their customers by utilizing Uber Direct. Deliveries will be provided at no cost to the NRS retailer when the purchases are made through the BR Club app.

Fintech

The Fintech segment comprises BOSS Money, a provider of international money remittances as well as other, significantly smaller financial services businesses.

In 1Q23 and 1Q22, the Fintech segment contributed 6.2% and 3.8% of IDT’s consolidated revenue, respectively.

Fintech Revenue ($ in thousands)
			1Q23				4Q22				3Q22				2Q22				1Q22
BOSS Money		$	17,554			$	16,354			$	15,084			$	12,029			$	12,094
Other		$	2,333			$	2,195			$	2,131			$	2,571			$	2,136
Total Revenue		$	19,887			$	18,549			$	17,215			$	14,599			$	14,230

Fintech Take-Aways:

 

• BOSS Money transaction volumes increased 35% in 1Q23 to 2.87 million from 2.13 million in 1Q22.
• BOSS Money revenue increased 45% in 1Q23 to $17.6 million from $12.1 million in 1Q22 as a result of the increase in transaction volumes and average revenue per transaction.
• BOSS Money average revenue per transaction* increased 7.5% in 1Q23 to $6.11 from $5.69 in 1Q22. The increase was driven by the development and introduction of new platform functionalities enabling more flexible and granular pricing strategies.
• Fintech income from operations increased to $1.5 million in 1Q23 from a loss from operations of $1.6 million in 1Q22. The increase reflects in part the impacts of both temporary, favorable FX market conditions in certain US/Africa corridors and a gain of $1.6 million from the write-off of a portion of a prior period acquisition-related contingent consideration payment obligation during 1Q23.
• Adjusted EBITDA increased to $0.5 million from an Adjusted EBITDA loss of $1.0 million in 1Q22.
• In September, BOSS Money initiated a collaboration with United Bank for Africa (UBA) to enable customers to send U.S. dollars for direct deposit at any of the approximately 20 million UBA accounts in Nigeria.

net2phone

In 1Q23 and 1Q22, the net2phone segment accounted for 5.3% and 3.5% of IDT’s consolidated revenue, respectively.

net2phone Take–aways:

• Total seats on October 31, 2022 increased by 6% to 309,000 from 291,000 on July 31, 2022. Seats increased 26% from 244,000 a year earlier. The year-over-year increase included the addition of approximately 8,000 CCaaS seats.
• Subscription revenue increased 33% in 1Q23 to $15.5 million from $11.7 million in 1Q22, led by particularly strong growth in the U.S. market. Subscription revenue per seat continued to increase in both South and North America – the former despite the strengthening of the U.S. dollar relative to most South American currencies – as net2phone focused on higher-value customers and channel partners.
• Loss from operations in 1Q23 decreased to $1.1 million from a loss of $4.2 million in 1Q22, and Adjusted EBITDA was $296 thousand compared to negative Adjusted EBITDA of $2.9 million. The improvements reflect better unit economics as the business scales and revenue increases, a tight focus on cost control, and more focused investment in customer acquisition on markets with the highest returns on investment.
• In August 2022, net2phone was named a UCaaS growth and innovation leader in Latin America and the Caribbean by Frost & Sullivan, which placed net2phone in the top quadrant of the Frost Radar^TM: Unified Communications as a Service Market in Latin America and the Caribbean, 2022.

Traditional Communications

In 1Q23 and 1Q22, the Traditional Communications segment accounted for 82.5% and 90.0% of IDT’s consolidated revenue, respectively.

Traditional Communications Take–Aways:

• Mobile Top-Up (MTU) revenue decreased 15% in 1Q23 to $109.0 million from $128.5 million in 1Q22. The decrease reflected the industry-wide deterioration in a key corridor that was particularly impactful in the wholesale and retail channels. Excluding this corridor, MTU revenue would have increased 4.7% year-over-year.
• BOSS Revolution Calling revenue decreased 19% in 1Q23 to $86.3 million from $106.0 million in 1Q22. The decrease reflects the long-standing industry-wide decline in the paid minute calling markets that paused during the initial stages of the COVID pandemic but have since accelerated.
• IDT Global’s carrier services revenue decreased 31% in 1Q23 to $61.6 million from $89.2 million in 1Q22.

REPORTABLE BUSINESS SEGMENTS – QUARTERLY RESULTS

The table below provides additional quarterly results for IDT’s segments including those impacted by the reclassification of certain lines of business within NRS, Fintech, and Traditional Communications.

($ in thousands)		Business Segments – Quarterly Results
			1Q21				2Q21				3Q21				4Q21				1Q22				2Q22				3Q22				4Q22				1Q23
NRS
Revenue		$	4,930			$	5,217			$	6,384			$	8,217			$	10,072			$	10,620			$	11,383			$	19,224			$	19,313
Direct Cost of Revenue		$	1,139			$	971			$	1,325			$	1,410			$	1,419			$	1,293			$	1,730			$	2,687			$	1,972
SG&A		$	3,995			$	4,743			$	4,586			$	6,312			$	7,146			$	7,086			$	8,368			$	9,457			$	11,632
(Loss) income from Operations		($	317	)		($	635	)		$	305			$	394			$	1,347			$	2,058			$	1,078			$	6,725			$	5,231
Adjusted EBITDA		($	204	)		($	497	)		$	474			$	495			$	1,507			$	2,241			$	1,285			$	7,080			$	5,709
Fintech
Revenue		$	16,907			$	15,239			$	12,886			$	12,587			$	14,230			$	14,599			$	17,215			$	18,549			$	19,887
Direct Cost of Revenue		$	5,154			$	5,610			$	4,839			$	6,185			$	5,952			$	6,138			$	6,591			$	7,397			$	8,281
SG&A		$	8,183			$	8,989			$	9,152			$	9,573			$	9,326			$	10,177			$	11,170			$	12,458			$	11,071
Income (loss) from Operations		$	3,227			$	279			($	1,436	)		($	4,017	)		($	1,595	)		($	2,271	)		($	1,112	)		($	1,909	)		$	1,511
Adjusted EBITDA		$	3,571			$	640			($	1,104	)		($	3,171	)		($	1,048	)		($	1,715	)		($	546	)		($	1,306	)		$	534
net2phone
Revenue		$	9,702			$	10,866			$	11,445			$	12,490			$	12,913			$	13,535			$	15,555			$	16,182			$	16,950
Direct Cost of Revenue		$	2,076			$	2,020			$	2,177			$	2,401			$	2,468			$	2,389			$	2,649			$	2,547			$	2,841
SG&A		$	10,419			$	11,207			$	11,831			$	12,680			$	13,309			$	13,046			$	13,819			$	14,010			$	13,813
(Loss) from Operations		($	3,880	)		($	3,658	)		($	3,965	)		($	3,958	)		($	4,193	)		($	2,866	)		($	2,257	)		($	1,817	)		($	1,056	)
Adjusted EBITDA		($	2,793	)		($	2,360	)		($	2,563	)		($	2,591	)		($	2,865	)		($	1,899	)		($	913	)		($	374	)		$	296
Traditional Comms
Revenue		$	311,886			$	308,443			$	343,116			$	356,675			$	332,868			$	298,304			$	284,200			$	274,608			$	265,666
Direct Cost of Revenue		$	264,806			$	260,544			$	292,455			$	300,937			$	281,787			$	247,505			$	236,595			$	225,283			$	218,542
SG&A		$	27,399			$	27,390			$	27,879			$	26,603			$	28,298			$	28,500			$	27,633			$	28,866			$	27,429
Income from Operations		$	16,083			$	19,232			$	20,083			$	26,629			$	20,328			$	19,897			$	17,579			$	18,022			$	17,263
Adjusted EBITDA		$	19,681			$	20,509			$	22,781			$	29,136			$	22,783			$	22,299			$	19,973			$	20,458			$	19,695
Corporate
G&A		$	2,147			$	1,969			$	1,702			$	1,725			$	2,027			$	2,262			$	1,783			$	1,741			$	1,919
(Loss) from Operations		($	1,864	)		($	2,294	)		($	1,115	)		($	2,121	)		($	2,110	)		($	3,004	)		($	1,960	)		($	1,852	)		($	2,724	)
Adjusted EBITDA		($	2,147	)		($	1,969	)		($	1,702	)		($	1,725	)		($	2,027	)		($	2,262	)		($	1,783	)		($	1,741	)		($	1,919	)

NOTES ON FINANCIAL STATEMENTS

Consolidated results for all periods presented include corporate overhead. Corporate G&A expense in 1Q23 decreased to $1.9 million from $2.0 million in 1Q22.

As of October 31, 2022, IDT held $137.1 million in cash, cash equivalents, debt securities, and current equity investments. Current assets totaled $361.1 million and current liabilities totaled $292.8 million. IDT had no outstanding debt at quarter end.

Net cash provided by operating activities during 1Q23 was $18.2 million compared to net cash used in operating activities of $5.9 million during 1Q22. Exclusive of changes in customer deposit balances at our Gibraltar-based bank, net cash provided by operating activities during 1Q23 was $15.3 million compared to $7.2 million during 1Q22.

Capital expenditures increased to $5.2 million in 1Q23 from $4.4 million in 1Q22.

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 6:00 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: 820449).

A replay of the conference call will be available approximately three hours after the call concludes through December 19, 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: 47065. 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 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, IDT Digital Payments and BOSS Revolution international calling services make sending money, paying for products and services, 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

		October 31, 2022				July 31, 2022
		(Unaudited)
		(in thousands)
Assets
Current assets:
Cash and cash equivalents		$	107,895			$	98,352
Restricted cash and cash equivalents			90,880				91,210
Debt securities			19,811				22,303
Equity investments			9,369				17,091
Trade accounts receivable, net of allowance for doubtful accounts of $6,193 at October 31, 2022 and $5,882 at July 31, 2022			57,875				64,315
Disbursement prefunding			28,356				21,057
Prepaid expenses			15,057				17,526
Other current assets			31,834				30,773
Total current assets			361,077				362,627
Property, plant, and equipment, net			37,425				36,866
Goodwill			26,250				26,380
Other intangibles, net			9,103				9,609
Equity investments			6,916				7,426
Operating lease right-of-use assets			6,737				7,210
Deferred income tax assets, net			33,029				36,701
Other assets			10,156				10,275
Total assets		$	490,693			$	497,094
Liabilities and equity
Current liabilities:
Trade accounts payable		$	31,670			$	29,080
Accrued expenses			107,374				117,109
Deferred revenue			35,383				36,531
Customer deposits			83,614				85,764
Other current liabilities			34,715				36,588
Total current liabilities			292,756				305,072
Operating lease liabilities			4,175				4,606
Other liabilities			4,999				6,588
Total liabilities			301,930				316,266
Commitments and contingencies
Redeemable noncontrolling interest			10,324				10,191
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 October 31, 2022 and July 31, 2022			33				33
Class B common stock, $.01 par value; authorized shares-200,000; 27,765 and 27,725 shares issued and 23,935 and 24,112 shares outstanding at October 31, 2022 and July 31, 2022, respectively			278				277
Additional paid-in capital			297,191				296,005
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 3,830 and 3,613 shares of Class B common stock at October 31, 2022 and July 31, 2022, respectively			(106,906	)			(101,565	)
Accumulated other comprehensive loss			(11,672	)			(11,305	)
Accumulated deficit			(4,828	)			(15,830	)
Total IDT Corporation stockholders’ equity			174,096				167,615
Noncontrolling interests			4,343				3,022
Total equity			178,439				170,637
Total liabilities and equity		$	490,693			$	497,094

IDT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended October 31,
		2022				2021
		(in thousands, except per share data)
Revenues		$	321,816			$	370,083
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)			231,636				291,625
Selling, general and administrative (i)			65,864				60,113
Depreciation and amortization			4,790				4,446
Severance			100				38
Total costs and expenses			302,390				356,222
Other operating gain (expense), net			800				(88	)
Income from operations			20,226				13,773
Interest income, net			509				13
Other expense, net			(3,842	)			(16,216	)
Income (loss) before income taxes			16,893				(2,430	)
(Provision for) benefit from income taxes			(4,338	)			85
Net income (loss)			12,555				(2,345	)
Net (income) attributable to noncontrolling interests			(1,553	)			(133	)
Net income (loss) attributable to IDT Corporation		$	11,002			$	(2,478	)
Earnings (loss) per share attributable to IDT Corporation common stockholders:
Basic		$	0.43			$	(0.10	)
Diluted		$	0.43			$	(0.10	)
Weighted-average number of shares used in calculation of earnings (loss) per share:
Basic			25,603				25,566
Diluted			25,616				25,566
(i) Stock-based compensation included in selling, general and administrative expenses		$	572			$	285

 

 

IDT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

		Three Months Ended October 31,
		2022				2021
		(in thousands)
Operating activities
Net income (loss)		$	12,555			$	(2,345	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			4,790				4,446
Deferred income taxes			3,672				(413	)
Provision for doubtful accounts receivable			430				716
Net unrealized loss from marketable securities			1,846				13,386
Stock-based compensation			572				285
Other			756				1,718
Changes in assets and liabilities:
Trade accounts receivable			5,185				(5,638	)
Disbursement prefunding, prepaid expenses, other current assets, and other assets			(7,123	)			(7,563	)
Trade accounts payable, accrued expenses, other current liabilities, and other liabilities			(6,970	)			3,265
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)			2,865				(13,069	)
Deferred revenue			(394	)			(641	)
Net cash provided by (used in) operating activities			18,184				(5,853	)
Investing activities
Capital expenditures			(5,172	)			(4,353	)
Purchase of convertible preferred stock in equity method investment			–				(1,051	)
Purchases of debt securities and equity investments			(2,058	)			(6,260	)
Proceeds from maturities and sales of debt securities and redemption of equity investments			11,472				3,867
Net cash provided by (used in) investing activities			4,242				(7,797	)
Financing activities
Distributions to noncontrolling interests			(99	)			(183	)
Proceeds from other liabilities			300				2,302
Repayment of other liabilities			(1,916	)			(1,242	)
Proceeds from sale of redeemable equity in subsidiary			–				10,000
Repurchases of Class B common stock			(5,341	)			(26	)
Net cash (used in) provided by financing activities			(7,056	)			10,851
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents			(6,157	)			(2,257	)
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents			9,213				(5,056	)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period			189,562				226,916
Cash, cash equivalents, and restricted cash and cash equivalents at end of period		$	198,775			$	221,860

 

 

Reconciliation of Non-GAAP Financial Measures for the
First Quarter Fiscal 2023 and 2022

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 Adjusted EBITDA for 1Q23 and each fiscal quarter in fiscal 2022 and fiscal 2021, and non-GAAP net income (loss), and non-GAAP earnings (loss) per diluted share (EPS) for 1Q23, 4Q22, and1Q22, 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 (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 2023 and fiscal 2022 periods.

IDT’s measure of non-GAAP EPS is 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), 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 (loss), 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 (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), 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 gain (expense), net, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA, non-GAAP net income (loss), and non-GAAP EPS. Other operating gain (expense), net includes a gain from the write-off of a contingent consideration liability, legal fees net of insurance claims related to Straight Path Communications Inc.’s stockholders’ putative class action and derivative complaint, and expense for the indemnification of a net2phone cable telephony customer related to patent infringement claims brought against the customer. From time-to-time, IDT may have gains or incur costs related to non-routine legal and other 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 (loss) 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.

Adjusted EBITDA, non-GAAP net income (loss), 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 (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), 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 (loss), 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 (loss) for IDT on a consolidated basis, (b) for non-GAAP net income (loss), net income (loss), and (c) for non-GAAP EPS, diluted earnings (loss) 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 Communications				net2phone				NRS				Fintech				Corporate
Three Months Ended October 31, 2022 (1Q23)
Net income attributable to IDT Corporation		$	11.0
Adjustments:
Net income attributable to noncontrolling interests			1.6
Net income			12.6
Provision for income taxes			4.3
Income before income taxes			16.9
Interest income, net			(0.5	)
Other expense, net			3.8
Income (loss) from operations			20.2			$	17.3			$	(1.1	)		$	5.2			$	1.5			$	(2.7	)
Depreciation and amortization			4.8				2.3				1.4				0.5				0.6				–
Severance			0.1				0.1				–				–				–				–
Other operating gain, net			(0.8	)			–				–				–				(1.6	)			0.8
Adjusted EBITDA		$	24.3			$	19.7			$	0.3			$	5.7			$	0.5			$	(1.9	)

 

		Total IDT Corporation				Traditional Communications				net2phone				NRS				Fintech				Corporate
Three Months Ended July 31, 2022 (4Q22)
Net income attributable to IDT Corporation		$	17.2
Adjustments:
Net income attributable to noncontrolling interests			0.7
Net income			18.0
Benefit from income taxes			–
Income before income taxes			18.0
Interest expense, net			0.1
Other expense, net			1.1
Income (loss) from operations			19.2			$	18.0			$	(1.8	)		$	6.7			$	(1.9	)		$	(1.9	)
Depreciation and amortization			4.8				2.4				1.4				0.4				0.6				–
Other operating expense, net			0.1				–				–				–				–				0.1
Adjusted EBITDA		$	24.1			$	20.5			$	(0.4	)		$	7.1			$	(1.3	)		$	(1.7	)

 

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

		Total IDT Corporation				Traditional Communications				net2phone				NRS				Fintech				Corporate
Three Months Ended October 31, 2022 (1Q22)
Net loss attributable to IDT Corporation		$	(2.4	)
Adjustments:
Net income attributable to noncontrolling interests			0.1
Net loss			(2.3	)
Benefit from income taxes			(0.1	)
Loss before income taxes			(2.4	)
Interest income, net			–
Other expense, net			16.2
Income (loss) from operations			13.8			$	20.3			$	(4.2	)		$	1.3			$	(1.6	)		$	(2.1	)
Depreciation and amortization			4.4				2.4				1.3				0.2				0.5				–
Other operating expense, net			0.1				–				–				–				–				0.1
Adjusted EBITDA		$	18.4			$	22.8			$	(2.9	)		$	1.5			$	(1.0	)		$	(2.0	)

 

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

			1Q23				4Q22				1Q22
Net income (loss) attributable to IDT Corporation		$	11.0			$	17.2			$	(2.5	)
Adjustments (add) subtract:
Stock-based compensation			(0.6	)			(0.1	)			(0.3	)
Severance expense			(0.1	)			(0.1	)			–
Other operating gain (expense), net			0.8				(0.1	)			(0.1	)
Total adjustments			0.1				(0.3	)			(0.4	)
Income tax effect of total adjustments			–				–				(0.1	)
			(0.1	)			0.3				0.3
Non-GAAP net income (loss)		$	10.9			$	17.5			$	(2.2	)
Earnings (loss) per share:
Basic		$	0.43			$	0.66			$	(0.10	)
Total adjustments			–				0.01				0.02
Non-GAAP – basic		$	0.43			$	0.67			$	(0.08	)
Weighted-average number of shares used in calculation of basic earnings (loss) per share			25.6				26.0				25.6
Diluted		$	0.43			$	0.66			$	(0.10	)
Total adjustments			–				0.01				0.02
Non-GAAP – diluted		$	0.43			$	0.67			$	(0.08	)
Weighted-average number of shares used in calculation of diluted earnings (loss) per share			25.6				26.1				25.6

 

($ in thousands)		Reconciliation of Income (Loss) from Operations to Adjusted EBITDA Figures may not foot due to rounding to thousands
			1Q21				2Q21				3Q21				4Q21				1Q22				2Q22				3Q22				4Q22				1Q23
NRS
(Loss) income from Operations		($	317	)		($	635	)		$	305			$	394			$	1,347			$	2,058			$	1,078			$	6,725			$	5,231
Additions:
Depreciation and amortization		$	113			$	138			$	168			$	100			$	160			$	183			$	207			$	355			$	478
Adjusted EBITDA		($	204	)		($	497	)		$	474			$	495			$	1,507			$	2,241			$	1,285			$	7,080			$	5,709
Fintech
Income (loss) from Operations		$	3,227			$	279			($	1,436	)		($	4,017	)		($	1,595	)		($	2,271	)		($	1,112	)		($	1,909	)		$	1,511
Additions (Subtractions):
Depreciation and amortization		$	344			$	361			$	377			$	433			$	509			$	534			$	578			$	610			$	621
Severance																		$	38			$	22
Other operating (gain) expense, net										$	(45	)		$	412											$	(13	)		$	(7	)		$	(1,598	)
Adjusted EBITDA		$	3,571			$	640			($	1,104	)		($	3,171	)		($	1,048	)		($	1,715	)		($	546	)		($	1,306	)		$	534
net2phone
(Loss) from Operations		($	3,880	)		($	3,658	)		($	3,965	)		($	3,958	)		($	4,193	)		($	2,866	)		($	2,257	)		($	1,817	)		($	1,056	)
Additions (Subtractions):
Depreciation and amortization		$	1,087			$	1,198			$	1,402			$	1,367			$	1,328			$	1,260			$	1,343			$	1,443			$	1,352
Other operating expense (gain), net						$	100															$	(293	)
Adjusted EBITDA		($	2,793	)		($	2,360	)		($	2,563	)		($	2,591	)		($	2,865	)		($	1,899	)		($	913	)		($	374	)		$	296
Traditional Comms
Income from Operations		$	16,083			$	19,232			$	20,083			$	26,629			$	20,328			$	19,897			$	17,579			$	18,022			$	17,263
Additions (Subtractions):
Depreciation and amortization		$	2,931			$	2,747			$	2,459			$	2,464			$	2,429			$	2,381			$	2,361			$	2,356			$	2,321
Severance		$	113			$	143			$	184			$	13							$	8							$	49			$	100
Other operating expense (gain), net		$	554			$	(1,613	)		$	56			$	30			$	26			$	13			$	33			$	31			$	11
Adjusted EBITDA		$	19,681			$	20,509			$	22,781			$	29,136			$	22,783			$	22,299			$	19,973			$	20,458			$	19,695
Corporate
(Loss) from Operations		($	1,864	)		($	2,294	)		($	1,115	)		($	2,121	)		($	2,110	)		($	3,004	)		($	1,960	)		($	1,852	)		($	2,724	)
Additions (Subtractions):
Depreciation and amortization		$	18			$	20			$	19			$	19			$	20			$	20			$	19			$	18			$	18
Other operating (gain) expense, net		$	(302	)		$	305			$	(605	)		$	376			$	63			$	721			$	158			$	93			$	787
Adjusted EBITDA		($	2,147	)		($	1,969	)		($	1,702	)		($	1,725	)		($	2,027	)		($	2,262	)		($	1,783	)		($	1,741	)		($	1,919	)

*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.

BOSS Money’s Average Revenue per Transaction is also a financial metric. Average Revenue per Transaction is calculated by dividing BOSS Money’s revenue in accordance with GAAP by the number of transactions during the period. Average Revenue per Transaction is useful for comparisons of BOSS Money’s revenue per transaction to prior periods and to competitors and others in the market, as well as for forecasting future revenue based on transaction trends.

net2phone’s subscription revenue is its revenue in accordance with GAAP excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil. net2phone’s 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’s revenues and direct cost of revenues are strong indications of the top-line growth and performance of the business.

# # #

 

Consumer spending at NRS retailers in October increased 9.5% compared to October 2021 and increased 3.6% compared to September 2022

NEWARK, N.J., Nov. 07, 2022 — NRSInsights, a provider of sales data and analytics drawn from retail transactions processed through the National Retail Solutions (NRS) nationwide point-of-sale (POS) platform, today announced comparative same-store sales results for October 2022.

The NRS retail network comprises over 20,000 terminals scanning purchases at independent retailers including bodegas, convenience stores, liquor stores, grocers, and tobacco and sundries sellers predominantly serving urban consumers.

Retail Same-Store Sales Highlights for October 2022

(Sequential comparisons are influenced by seasonal factors)

• Same-store sales increased 9.5% from a year earlier (October 2021) and increased 3.6% compared to the preceding month (September 2022);
• Same-store sales in the preceding month (September 2022) had also increased 9.5% compared to the year-ago month (September 2021) but had decreased 1.2% compared to the previous month, (August 2022);
• Year to date, same-store sales have increased 8.2% compared to the comparable period in 2021;
• For the three months ended October 31, 2022, same-store sales increased 8.6% compared to the three months a year ago;
• The number of items sold during October 2022 increased 8.6% compared to October 2021 and increased 4.4% compared to September 2022;
• The average number of transactions per store in October 2022 increased 4.9% compared to October 2021 and increased 1.5% compared to September 2022;
• A dollar-weighted average of prices for the top 500 items purchased in October 2022 increased 4.1% year over year, an increase compared to the 3.6% year-over-year increase in September 2022.

Suzy Silliman, SVP, Data Strategy and Sales at NRS commented, “NRS same-store sales data for October showed strong consumer demand, with robust year over year and sequential increases. The rate of increase in the cost of the most popular items also increased significantly, suggesting that inflationary pressures are still building in this slice of the retail market.”

The table below provides historical comparative data with the US Commerce Department’s Advance Monthly Retail Trade data excluding food service:

NRSInsights Reports

The NRSInsights monthly Same-Store Retail Sales Reports are intended to provide timely topline data reflective of sales at NRS’ network of independent, predominantly urban, retail stores.

Over the prior 12 months, the NRS same-store retail sales data has exhibited a statistically significant correlation with the US Commerce Department’s Advance Monthly Retail Trade data excluding food services (r =.869, p = 0.000003)

The NRSInsights data have not been adjusted to reflect inflation, demographic distributions, seasonal buying patterns, item substitution, or other factors that may facilitate comparisons to other periods, to other same-store retail sales data, or to the US Commerce Department’s retail data.

Same-store data comparisons of October 2022 with October 2021 are derived from approximately 122 million transactions processed through the 11,616 stores on the NRS network that scanned transactions in both months.

NRS POS Network

NRS operates the largest POS network for independent retailers in the US, aggregating data from over 20,000 active POS terminals operating in over 17,000 independent retail stores. Its platform predominantly serves urban, small-format, independent, retail stores including convenience stores, bodegas, liquor stores, grocers, and tobacco and sundries sellers. The network includes retailers in all 50 states and in 190 of the 210 designated market areas (DMAs) in the US. Over the past twelve months, NRS’ POS terminals processed $12.6 billion in sales through approximately 910 million transactions.

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).

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.

NRS Data Contact:
Suzy Silliman
SVP, Data Strategy and Sales at NRS
National Retail Solutions
suzy.silliman@nrsplus.com

# # #

Attachment

• National Retail Solutions

NEWARK, NJ, Oct. 24, 2022 — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, today announced that Shmuel Jonas, Chief Executive Officer, will present at the LD Micro Main Event XV investor conference on Tuesday, October 25, 2022 in Los Angeles, CA. Mr. Jonas’ presentation is scheduled to begin at 11 AM ET (8 AM PT) followed by 1×1 meetings with investors.

Mr. Jonas’ presentation will include an overview of the company’s operations, strategy and financial results through the close of its 2022 fiscal year ended July 31st.

Those who wish to participate virtually or in person can register for the conference and live stream here: https://me22.sequireevents.com/. The presentation deck will also be available on the investor relations pages of the IDT Corporation 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.

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

# # #

Highest Levels of Quarterly and Full Fiscal Year Income from Operations since 2015

Highest Levels of Quarterly and Full Fiscal Year Adjusted EBITDA in Company History

Fintech and Cloud Communications Businesses Drive Gains

NEWARK, NJ, Oct. 06, 2022 (GLOBE NEWSWIRE) — IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services, today reported results for the fourth quarter and full fiscal year 2022, the three and twelve months ended July 31, 2022.

FOURTH QUARTER AND FISCAL YEAR 2022 HIGHLIGHTS

(Throughout this release, unless otherwise noted, results for the fourth quarter of fiscal year 2022 (4Q22) are compared to the fourth quarter of fiscal year 2021 (4Q21), and results for FY2022 are compared to FY2021. All earnings per share (EPS) and other ‘per share’ results are per diluted share unless otherwise noted.)

• Fintech and cloud communications businesses — revenue and related metrics:
  • National Retail Solutions (NRS) recurring revenue^* increased 157% to $17.7 million in 4Q22. FY2022 recurring revenue increased 129% to $45.3 million. Net active POS terminals increased by approximately 1400 during 4Q22 to end the quarter with approximately 19,400;
  • BOSS Money remittance revenue increased 56% to $17.0 million in 4Q22. Transaction volume increased by 31% to 2.7 million. FY2022 revenue increased 16% to $57.5 million with transaction volume increasing 24% to 9.4 million;
  • net2phone subscription revenue^* increased 37% to $15.1 million in 4Q22. Seats served increased by approximately 12,000 sequentially to end the quarter with approximately 291,000. FY2022 subscription revenue increased 38% to $53.6 million;
• Consolidated revenue in 4Q22 decreased 16% year-over-year to $329 million from $390 million as a result of a 23% decrease in the Traditional Communications segment’s revenue. FY2022 consolidated revenue decreased 6% to $1,364 million from $1,447 million;
• Consolidated income from operations in 4Q22 increased 13% to $19.2 million from $16.9 million. FY2022 income from operations increased 6% to $60.1 million from $57.0 million;
• Net income attributable to IDT in 4Q22 decreased to $17.2 million from $38.7 million. FY2022 net income attributable to IDT decreased to $27.0 million from $96.5 million. The quarterly and full-year decreases resulted from the positive impacts of reversals of income tax valuation allowances totaling $22.4 million in 4Q21 and $46.3 million in FY2021, and, for the full fiscal year, net unrealized losses on equity investments of $19.2 million in FY2022 compared to net unrealized gains of $8.8 million in FY2021;
  

(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 later in this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measure. Please see the final page of this release for the explanation of asterisked key performance metrics.)

• EPS decreased to $0.66 in 4Q22 from $1.46. In FY2022, EPS decreased to $1.03 from $3.70. The quarterly and full-year decreases resulted from the positive impacts of reversals of income tax valuation allowances totaling $0.84 per share in 4Q21 and $1.78 per share in FY2021, and, for the full fiscal year, net unrealized losses on equity investments of $0.73 per share in FY2022 compared to net unrealized gains of $0.34 per share in FY2021;
• Consolidated Adjusted EBITDA in 4Q22 increased 9% to $24.1 million from $22.2 million. FY2022 Adjusted EBITDA increased 6% to $79.1 million from $74.5 million;
• Non-GAAP EPS in 4Q22 increased to $0.70 from $0.66. FY2022 Non-GAAP EPS decreased to $1.19 from $1.98;
• IDT repurchased 554,744 shares of its Class B common stock in the open market for $13.4 million during 4Q22.

REMARKS BY SHMUEL JONAS, CEO

“In the fourth quarter and for the full 2022 fiscal year, our high-margin, rapidly growing fintech and cloud communications businesses delivered impressive year-over-year and sequential results. For several years we have invested in these businesses to develop the next generation of IDT’s value creation. This transformation helped drive IDT’s consolidated quarterly and annual Adjusted EBITDA to their highest levels in our history.

“Looking ahead, we anticipate that the continued growth of these high-margin fintech and cloud communications businesses and of our Mobile Top-Up offerings will further, significantly improve IDT’s consolidated Adjusted EBITDA, more than offsetting the continued decreasing contributions that we expect from the BOSS Revolution Calling and IDT Global businesses within our lower margin Traditional Communications segment.”

CONSOLIDATED RESULTS

RESULTS BY SEGMENT

Fintech

Fintech comprises two primary businesses: 1) National Retail Solutions (NRS), an operator of a nationwide point-of-sale (POS) retail network providing merchant services, digital out-of-home (DOOH) advertising, transaction data, and ancillary services, and 2) BOSS Money, a provider of international money remittances.

In 4Q22 and 4Q21, the Fintech segment accounted for 11.0% and 4.9% of IDT’s consolidated revenue, respectively. In FY2022 and FY2021, the Fintech segment accounted for 8.0% and 5.1% of consolidated revenue, respectively.

NRS Take-Aways:

• As of July 31, 2022, NRS’ POS terminal network comprised approximately 19,400 active POS terminals, an increase of 38% compared to a year earlier, and approximately 10,300 payment processing accounts, an increase of 77% compared to a year earlier;
• NRS recurring revenue increased 157% in 4Q22 to $17.7 million from $6.9 million in 4Q21. FY2022 recurring revenue increased 129% to $45.3 million from $19.8 million in FY2021;
• NRS monthly average recurring revenue per terminal increased to $316 from $169;
• In August 2022, NRS and Bringg, a leading delivery management platform provider, announced a partnership to enable NRS retailers nationwide to source and manage external delivery providers for home delivery services utilizing Bringg’s delivery hub.

BOSS Money Take-Aways:

• Transaction volumes in 4Q22 increased 31% to 2.67 million from 2.04 million. FY2022 transaction volumes increased 24% to 9.37 million from 7.54 million.
• Revenue increased 56% in 4Q22 to $17.0 million from $10.9 million. FY2022 revenue increased 16% to $57.5 million from $49.6 million. The robust 4Q22 increase resulted from accelerated growth in transaction volumes as well as higher average revenue per transaction^*;
• Average revenue per transaction in 4Q22 increased 19% to $6.35 from $5.33. The increase was driven by the development and introduction of new platform functionalities enabling more flexible and granular pricing strategies. In FY2022, average revenue per transaction decreased 7% to $6.13 from $6.57 as a result of elevated foreign exchange revenues realized during the first half of fiscal 2021 from favorable, transitory market conditions;
• During 4Q22, BOSS Money announced an expansion of service to Ethiopia by offering direct deposit to approximately 40 million Ethiopian bank accounts through an agreement with Terra Pay, a global mobile-first payments provider. More recently, BOSS Money initiated a collaboration with United Bank for Africa (UBA) to enable customers to send U.S. dollars for direct deposit at any of the approximately 20 million UBA accounts in Nigeria.

net2phone

In 4Q22 and 4Q21, the net2phone segment accounted for 4.9% and 3.2% of IDT’s consolidated revenue, respectively. In FY2022 and FY2021, the net2phone segment accounted for 4.3% and 3.1% of consolidated revenue, respectively.

net2phone Take–aways:

• Total seats on July 31, 2022 increased 4% to 291,000 from 279,000 on April 30, 2022. Seats increased 29% from 226,000 a year earlier. The year-over-year increase included 7,000 seats added through the Integra CCaaS acquisition in 3Q22;
  
• Subscription revenue in 4Q22 increased 37% to $15.1 million from $11.0 million, led by strong growth in both net2phone’s South and North American regions. FY2022 subscription revenue increased 38% to $53.6 million from $38.8 million in FY2021. Revenue per seat increased robustly in both South and North America — the former despite the strengthening of the US dollar relative to most South American currencies — as net2phone focused on higher-value customers and channel partners;
  
• During 4Q22, net2phone announced a partnership with TeleBermuda International Limited (TBi) to provide its UCaaS solutions to TBi’s business customers. net2phone also announced a strategic partnership with UPSTACK to enable UPSTACK’s expert advisors to offer net2phone’s cloud communication solutions to clients;
• Following the close of the fiscal year, net2phone was named a UCaaS growth and innovation leader in Latin America and the Caribbean by Frost & Sullivan, which placed net2phone in the top quadrant of the Frost Radar^TM: Unified Communications as a Service Market in Latin America and the Caribbean, 2022. During 4Q22, netphone’s UCaaS offering was recognized as one of the 10 Most Promising Unified Communication Solutions in 2022 by CIOReview, a leading publication for business technology leaders.
  

Traditional Communications

In 4Q22 and 4Q21, the Traditional Communications segment accounted for 84.1% and 91.9% of IDT’s consolidated revenue, respectively. In FY2022 and FY2021, the Traditional Communications segment accounted for 87.7% and 91.8% of consolidated revenue, respectively.

Traditional Communications Take–Aways:

• Mobile Top-Up (MTU) revenue in 4Q22 decreased 18% to $112.6 million from $136.6 million. The decrease reflects a sudden, industry-wide deterioration in a key corridor that was particularly impactful in the wholesale and retail channels. In FY2022, revenue increased 3% to $473.2 million from $461.6 million in FY2021 led by increased sales of bundled offerings;
• BOSS Revolution Calling revenue in 4Q22 decreased 20% to $90.2 million from $112.6 million. In FY2022, revenue decreased 15% to $387.9 million from $455.2 million in FY2021. The decreases reflect the long-standing industry-wide decline in the paid minute calling markets that paused during the initial stages of the COVID pandemic but have since accelerated;
• IDT Global’s carrier services revenue in 4Q22 decreased 35% to $62.9 million from $97.4 million. FY2022 revenue decreased 19% to $292.3 million from $361.0 million in FY2021;
• Decreases in BOSS Revolution Calling and IDT Global revenues have been heavily skewed toward lower margin corridors and/or distribution channels, mitigating their bottom-line impacts. Management anticipates, however, that both offerings will continue to generate significant, though uneven, revenue decreases for the foreseeable future and that, gradually, a larger proportion of these decreases will impact Traditional Communications’ bottom line results.

NOTES ON FINANCIAL STATEMENTS

Consolidated results for all periods presented include corporate overhead. Corporate G&A expense was $1.7 million in both 4Q22 and 4Q21. FY2022 corporate SG&A increased to $7.8 million from $7.5 million in FY2021.

As of July 31, 2022, IDT held $137.7 million in cash, cash equivalents, debt securities, and current equity investments. Current assets totaled $362.6 million and current liabilities totaled $305.1 million, and IDT had no outstanding debt.

Net cash provided by operating activities during 4Q22 was $16.1 million compared to $28.5 million during 4Q21. Exclusive of changes in customer deposit balances at our Gibraltar-based bank, net cash provided by operating activities during 4Q22 was $22.3 million compared to $24.3 million during 4Q21. FY2022 net cash provided by operating activities was $29.4 million compared to $66.6 million in FY2021. Exclusive of changes in customer deposit balances, net cash provided by operating activities during FY2022 was $45.4 million compared to $73.5 million during FY2021.

Capital expenditures increased to $8.1 million in 4Q22 from $3.3 million in 4Q21. Capital expenditures increased to $21.9 million in FY2022 from $16.8 million in FY2021.

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, 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: 657260).

A replay of the conference call will be available approximately three hours after the call concludes through October 20, 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: 46269. 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

IDT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

IDT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

Reconciliation of Non-GAAP Financial Measures for the
Fourth Quarter and Full Fiscal Years 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 4Q22, 3Q22, 4Q21, and the full fiscal years 2022 and 2021, 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 the release of valuation allowance on deferred tax assets and 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 4Q21 and 3Q21, due to continue d and projected profitability, IDT was able to release a portion of its valuation allowance that was recorded against its deferred tax assets. These income tax benefits were excluded from IDT’s non-GAAP net income and non-GAAP EPS because they were only indirectly related to the results of IDT’s core operations.

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

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

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

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.

*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.

BOSS Money’s Average Revenue per Transaction is also a financial metric. Average Revenue per Transaction is calculated by dividing BOSS Money’s revenue in accordance with GAAP by the number of transactions during the period. Average Revenue per Transaction is useful for comparisons of BOSS Money’s revenue per transaction to prior periods and to competitors and others in the market, as well as for forecasting future revenue based on transaction trends.

net2phone’s 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’s revenues and direct cost of revenues are strong indications of the top-line growth and performance of the business.

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