IDT Corporation’s Earnings Call Highlights Robust Growth

IDT Corporation ((IDT)) has held its Q3 earnings call. Read on for the main highlights of the call.

IDT Corporation’s recent earnings call painted a picture of robust financial health, with strong year-over-year performance in most business segments. The company reported significant increases in income from operations, adjusted EBITDA, and earnings per share (EPS). Despite facing challenges such as a decline in advertising revenue and a slowdown in terminal additions, the overall sentiment was positive, with growth and expansion in key areas slightly outweighing the negatives.

Significant Year-Over-Year Growth

IDT Corporation reported impressive year-over-year growth, with consolidated income from operations soaring by 133%, consolidated adjusted EBITDA increasing by 57%, and EPS skyrocketing by 290%. These figures highlight the company’s strong financial performance and its ability to generate substantial returns for shareholders.

NRS Performance

The National Retail Solutions (NRS) segment demonstrated resilience with a 23% increase in recurring revenue year-over-year. This growth was driven by a 37% rise in merchant services revenue and a 33% increase in SaaS fees, effectively offsetting a 12% decline in advertising and data revenue. This performance underscores the segment’s potential for sustained growth.

BOSS Money Success

BOSS Money, IDT’s remittance platform, achieved remarkable success with a 27% increase in transactions and a 25% rise in revenue. The Fintech segment, which includes BOSS Money, generated over $5 million in adjusted EBITDA, a significant leap from $244,000 the previous year, showcasing the platform’s growing influence in the market.

net2phone Growth

net2phone continued its upward trajectory with balanced growth across the U.S., Brazil, and Mexico. The segment’s adjusted EBITDA margins reached 15%, with income from operations increasing by 188% and adjusted EBITDA by 50%, reflecting its robust market presence and operational efficiency.

Traditional Communications Strength

IDT’s Traditional Communications segment reported over a 30% increase in both income from operations and adjusted EBITDA year-over-year. This segment remains a vital long-term cash generator for the company, contributing significantly to its overall financial stability.

Advertising Revenue Decline

The company faced a 12% decline in advertising and data revenue, attributed to a strategic decision to limit sales to one of the larger programmatic platform clients. While this presents a challenge, the company appears to be managing the impact effectively.

NRS Bad Debt Provision

A provision for bad debt expense amounting to $1.4 million was established due to amounts due from a client. This move indicates the company’s proactive approach to managing potential financial risks.

Slower Terminal Additions

The pace of POS terminal additions, payment processing accounts, and merchant service revenue experienced a slowdown. However, the company disputes the significance of this issue, suggesting confidence in its long-term growth strategy.

Forward-Looking Guidance

Looking ahead, IDT Corporation remains optimistic about its growth prospects. The company is on track to meet its full-year adjusted EBITDA goal of $126 million. With continued expansion in key segments and a focus on new growth initiatives, IDT is well-positioned to maintain its upward trajectory.

In conclusion, IDT Corporation’s earnings call reflects a positive sentiment, driven by substantial financial growth and strategic initiatives across various segments. Despite facing some challenges, the company’s robust performance and optimistic guidance suggest a promising future for investors and stakeholders.