UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

FOR THE QUARTERLY PERIOD ENDED ~~JANUARY~~OCTOBER 31, 2021

~~☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-16371

IDT CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware		22-3415036
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

520 Broad Street, Newark, New Jersey		07102
(Address of principal executive offices)		(Zip Code)

~~(973) 438-1000~~

(973)438-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Class B common stock, par value $.01 per share		New York Stock Exchange

Trading symbol: IDT

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

As of ~~March~~December 8, 2021, the registrant had the following shares outstanding:


Class A common stock, $.01 par value:		1,574,326 shares outstanding (excluding 1,698,000 treasury shares)
Class B common stock, $.01 par value:		~~24,151,017~~24,187,548 shares outstanding (excluding ~~2,191,634~~2,192,276 treasury shares)

IDT CORPORATION

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION			13

	Item 1.	Financial Statements (Unaudited)		13

		Consolidated Balance Sheets		13

		Consolidated Statements of Operations		24

		Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~		35

		Consolidated Statements of Equity		46

		Consolidated Statements of Cash Flows		67

		Notes to Consolidated Financial Statements		78

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2322

	Item 3.	Quantitative and Qualitative Disclosures About Market Risks		3331

	Item 4.	Controls and Procedures		3332

PART II. OTHER INFORMATION			3433

	Item 1.	Legal Proceedings		3433

	Item 1A.	Risk Factors		3433

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		3533

	Item 3.	Defaults Upon Senior Securities		3533

	Item 4.	Mine Safety Disclosures		3533

	Item 5.	Other Information		3533

	Item 6.	Exhibits		3633

SIGNATURES			3734

i 2

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

IDT CORPORATION

CONSOLIDATED BALANCE SHEETS

January 31,
2021

July 31,
2020

(Unaudited) (Note 1)
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 79,481 $ 84,860
Restricted cash and cash equivalents 109,858 116,362
Debt securities 21,501 18,363
Equity investments 24,346 5,964
Trade accounts receivable, net of allowance for doubtful accounts of $6,909 at January 31, 2021 and $6,085 at July 31, 2020 51,616 44,166
Prepaid expenses 34,671 33,115
Other current assets 19,926 19,302
Total current assets 341,399 322,132
Property, plant and equipment, net 30,641 30,061
Goodwill 14,843 12,858
Other intangibles, net 6,289 3,959
Equity investments 10,441 8,833
Operating lease right-of-use assets 8,794 9,490
Deferred income tax assets, net 2,832 8,512
Other assets 9,332 8,905
Total assets $ 424,571 $ 404,750
Liabilities and equity
Current liabilities:
Trade accounts payable $ 36,368 $ 31,147
Accrued expenses 126,425 125,544
Deferred revenue 39,189 40,114
Customer deposits 109,673 115,992
Other current liabilities 14,646 12,073
Total current liabilities 326,301 324,870
Operating lease liabilities 6,514 7,353
Other liabilities 1,340 1,388
Total liabilities 334,155 333,611
Commitments and contingencies
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, 2021 and July 31, 2020 33 33
Class B common stock, $.01 par value; authorized shares—200,000; 26,343 and 25,961 shares issued and 24,151 and 24,345 shares outstanding at January 31, 2021 and July 31, 2020, respectively 263 260
Additional paid-in capital 276,871 277,443
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 2,192 and 1,616 shares of Class B common stock at January 31, 2021 and July 31, 2020, respectively (60,413 ) (56,221 )
Accumulated other comprehensive loss (8,957 ) (7,410 )
Accumulated deficit (117,937 ) (139,333 )
Total IDT Corporation stockholders’ equity 89,860 74,772
Noncontrolling interests 556 (3,633 )
Total equity 90,416 71,139
Total liabilities and equity $ 424,571 $ 404,750

	October 31, 2021			July 31, 2021
	(Unaudited)			(Note 1)
			(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	114,543		$	107,147
Restricted cash and cash equivalents		107,317			119,769
Debt securities		13,633			14,012
Equity investments		31,144			42,434
Trade accounts receivable, net of allowance for doubtful accounts of $4,810 at October 31, 2021 and $4,438 at July 31, 2021		51,263			46,644
Disbursement prefunding		23,969			27,656
Prepaid expenses		17,130			13,694
Other current assets		26,491			16,779
Total current assets		385,490			388,135
Property, plant, and equipment, net		30,870			30,829
Goodwill		14,798			14,897
Other intangibles, net		7,312			7,578
Equity investments		9,487			11,654
Operating lease right-of-use assets		7,768			7,671
Deferred income tax assets, net		41,686			41,502
Other assets		10,318			10,389
Total assets	$	507,729		$	512,655
Liabilities and equity
Current liabilities:
Trade accounts payable	$	31,615		$	24,502
Accrued expenses		120,440			129,085
Deferred revenue		41,299			42,293
Customer deposits		100,342			115,524
Other current liabilities		32,223			27,930
Total current liabilities		325,919			339,334
Operating lease liabilities		5,533			5,473
Other liabilities		975			1,234
Total liabilities		332,427			346,041
Commitments and contingencies					-
Redeemable noncontrolling interest		10,010			—
Equity:
IDT Corporation stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000; 0 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, 2021 and July 31, 2021		33			33
Class B common stock, $.01 par value; authorized shares—200,000; 26,380 and 26,379 shares issued and 24,188 and 24,187 shares outstanding at October 31, 2021 and July 31, 2021, respectively		264			264
Common stock, value
Additional paid-in capital		278,306			278,021
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 2,192 and 2,192 shares of Class B common stock at October 31, 2021 and July 31, 2021, respectively		(60,439	)		(60,413	)
Accumulated other comprehensive loss		(9,226	)		(10,183	)
Accumulated deficit		(45,336	)		(42,858	)
Total IDT Corporation stockholders’ equity		163,602			164,864
Noncontrolling interests		1,690			1,750
Total equity		165,292			166,614
Total liabilities and equity	$	507,729		$	512,655

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2021			2020
	Three Months Ended October 31,
	2021			2020
	(in thousands, except per share data)
Revenues	$	370,083		$	343,425
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		291,625			273,174
Selling, general and administrative (i)		60,113			52,140
Depreciation and amortization		4,446			4,493
Severance		38			113
Total costs and expenses		356,222			329,920
Other operating expense, net (see Note 11)		(88	)		(252	)
Income from operations		13,773			13,253
Interest income (expense), net		13			(41	)
Other expense, net		(16,216	)		(1,380	)
(Loss) income before income taxes		(2,430	)		11,832
Benefit from (provision for) income taxes		85			(3,417	)
Net (loss) income		(2,345	)		8,415
Net income attributable to noncontrolling interests		(133	)		(127	)
Net (loss) income attributable to IDT Corporation	$	(2,478	)	$	8,288
(Loss) earnings per share attributable to IDT Corporation common stockholders:
Basic	$	(0.10	)	$	0.32
Diluted	$	(0.10	)	$	0.32

Weighted-average number of shares used in calculation of (loss) earnings per share:
Basic		25,566			25,534
Diluted		25,566			25,861

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021
2020
(in thousands, except per share data)

Revenues $ 339,766 $ 323,890 $ 683,191 $ 664,089
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization) 269,145 262,716 542,319 542,177
Selling, general and administrative (i) 54,298 53,789 106,442 107,223
Depreciation and amortization 4,464 5,184 8,956 10,479
Severance 143 486 255 1,112
Total costs and expenses 328,050 322,175 657,972 660,991
Other operating gain (expense), net (see Note 10) 1,207 (392 ) 955 (3,168 )
Income (loss) from operations 12,923 1,323 26,174 (70 )
Interest income, net 139 195 98 467
Other income, net 3,170 550 1,792 785
Income before income taxes 16,232 2,068 28,064 1,182
Provision for income taxes (3,027 ) (1,164 ) (6,444 ) (1,700 )
Net income (loss) 13,205 904 21,620 (518 )
Net (income) loss attributable to noncontrolling interests (97 ) 28 (224 ) (63 )
Net income (loss) attributable to IDT Corporation $ 13,108 $ 932 $ 21,396 $ (581 )
Earnings (loss) per share attributable to IDT Corporation common stockholders:
Basic $ 0.52 $ 0.04 $ 0.84 $ (0.02 )
Diluted $ 0.51 $ 0.04 $ 0.83 $ (0.02 )
Weighted-average number of shares used in calculation of earnings (loss) per share:
Basic 25,362 26,320 25,448 26,300
Diluted 25,713 26,451 25,787 26,300
(i) Stock-based compensation included in selling, general and administrative expenses $ 434 $ 1,167 $ 940 $ 2,531


(i)	Stock-based compensation included in selling, general and administrative expenses		$	285			$	506

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME ~~(LOSS)~~

(Unaudited)

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020
2021
2020

(in thousands)
Net income (loss) $ 13,205 $ 904 $ 21,620 $ (518 )
Other comprehensive income (loss):
Change in unrealized loss on available-for-sale securities 46 — 17 —
Foreign currency translation adjustments (1,815 ) (513 ) (1,564 ) (1,717 )
Other comprehensive loss (1,769 ) (513 ) (1,547 ) (1,717 )
Comprehensive income (loss) 11,436 391 20,073 (2,235 )
Comprehensive (income) loss attributable to noncontrolling interests (97 ) 28 (224 ) (63 )
Comprehensive income (loss) attributable to IDT Corporation $ 11,339 $ 419 $ 19,849 $ (2,298 )

	2021			2020
	Three Months Ended October 31,
	2021			2020
	(in thousands)
Net (loss) income	$	(2,345	)	$	8,415
Other comprehensive (loss) income:
Change in unrealized gain on available-for-sale securities		(111	)		(29	)
Foreign currency translation adjustments		1,068			251
Other comprehensive income		957			222
Comprehensive (loss) income		(1,388	)		8,637
Comprehensive income attributable to noncontrolling interests		(133	)		(127	)
Comprehensive (loss) income attributable to IDT Corporation	$	(1,521	)	$	8,510

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

Three Months Ended January 31, 2021
(in thousands)
IDT Corporation Stockholders
Class A
Common Stock Class B
Common Stock Additional
Paid-In
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Noncontrolling
Interests Total
Equity
BALANCE AT OCTOBER 31, 2020 $ 33 $ 260 $ 278,134 $ (59,077 ) $ (7,188 ) $ (131,045 ) $ (3,534 ) $ 77,583
Exercise of stock options — — 501 — — — — 501
Restricted Class B common stock purchased from employees — — — (1,336 ) — — — (1,336 )
Grant of restricted equity in subsidiary (see Note 11). — — (2,195 ) — — — 2,195 —
Business acquisition — — — — — — 2,188 2,188
Stock-based compensation — 3 431 — — — — 434
Distributions to noncontrolling interests — — — — — — (390 ) (390 )
Other comprehensive loss — — — — (1,769 ) — — (1,769 )
Net income — — — — — 13,108 97 13,205
BALANCE AT JANUARY 31, 2021 $ 33 $ 263 $ 276,871 $ (60,413 ) $ (8,957 ) $ (117,937 ) $ 556 $ 90,416

Six Months Ended January 31, 2021
(in thousands)
IDT Corporation Stockholders
Class A
Common Stock Class B
Common Stock Additional
Paid-In
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Noncontrolling
Interests Total
Equity
BALANCE AT JULY 31, 2020 $ 33 $ 260 $ 277,443 $ (56,221 ) $ (7,410 ) $ (139,333 ) $ (3,633 ) $ 71,139
Exercise of stock options — — 686 — — — — 686
Repurchases of Class B common stock through repurchase program — — — (2,849 ) — — — (2,849 )
Restricted Class B common stock purchased from employees — — — (1,343 ) — — — (1,343 )
Grant of restricted equity in subsidiary (see Note 11). — — (2,195 ) — — — 2,195 —
Business acquisition — — — — — — 2,188 2,188
Stock-based compensation — 3 937 — — — — 940
Distributions to noncontrolling interests — — — — — — (418 ) (418 )
Other comprehensive loss — — — — (1,547 ) — — (1,547 )
Net income — — — — — 21,396 224 21,620
BALANCE AT JANUARY 31, 2021 $ 33 $ 263 $ 276,871 $ (60,413 ) $ (8,957 ) $ (117,937 ) $ 556 $ 90,416

	Class A		Class B		Capital		Treasury			Comprehensive			Deficit			Interests			Total
	Three Months Ended October 31, 2021 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Accumulated Deficit			Noncontrolling Interests			Total Equity
BALANCE AT JULY 31, 2021	$	33	$	264	$	278,021	$	(60,413	)	$	(10,183	)	$	(42,858	)	$	1,750		$	166,614
Restricted Class B common stock purchased from employee		—		—		—		(26	)		—			—			—			(26	)
Exercise of stock options
Repurchases of Class B common stock through repurchase program
Stock-based compensation		—		—		285		—			—			—			—			285
Distributions to noncontrolling interests		—		—		—		—			—			—			(183	)		(183	)
Other comprehensive income		—		—		—		—			957			—			—			957
Net loss		—		—		—		—			—			(2,478	)		123			(2,355	)
BALANCE AT OCTOBER 31, 2021	$	33	$	264	$	278,306	$	(60,439	)	$	(9,226	)	$	(45,336	)	$	1,690		$	165,292

~~IDT CORPORATION~~

	Three Months Ended October 31, 2020 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Accumulated Deficit			Noncontrolling Interests			Total Equity
BALANCE AT JULY 31, 2020	$	33	$	260	$	277,443	$	(56,221	)	$	(7,410	)	$	(139,333	)	$	(3,633	)	$	71,139
BALANCE	$	33	$	260	$	277,443	$	(56,221	)	$	(7,410	)	$	(139,333	)	$	(3,633	)	$	71,139
Exercise of stock options		—		—		185		—			—			—			—			185
Repurchases of Class B common stock through repurchase program		—		—		—		(2,849	)		—			—			—			(2,849	)
Restricted Class B common stock purchased from employees		—		—		—		(7	)		—			—			—			(7	)
Stock-based compensation		—		—		506		—			—			—			—			506
Distributions to noncontrolling interests		—		—		—		—			—			—			(28	)		(28	)
Other comprehensive income		—		—		—		—			222			—			—			222
Net income		—		—		—		—			—			8,288			127			8,415
Net (loss) income		—		—		—		—			—			8,288			127			8,415
BALANCE AT OCTOBER 31, 2020	$	33	$	260	$	278,134	$	(59,077	)	$	(7,188	)	$	(131,045	)	$	(3,534	)	$	77,583
BALANCE	$	33	$	260	$	278,134	$	(59,077	)	$	(7,188	)	$	(131,045	)	$	(3,534	)	$	77,583

~~CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)—Continued~~

Three Months Ended January 31, 2020
(in thousands)
IDT Corporation Stockholders

Class A
Common Stock Class B
Common Stock Additional
Paid-In
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Noncontrolling
Interests Total
Equity
BALANCE AT OCTOBER 31, 2019 $ 33 $ 258 $ 274,953 $ (51,739 ) $ (6,062 ) $ (162,276 ) $ (2,836 ) $ 52,331
Restricted Class B common stock purchased from employees — — — (266 ) — — — (266 )
Stock-based compensation — 2 1,165 — — — — 1,167
Distributions to noncontrolling interests — — — — — — (230 ) (230 )
Other comprehensive loss — — — — (513 ) — — (513 )
Net income — — — — — 932 (28 ) 904
BALANCE AT JANUARY 31, 2020 $ 33 $ 260 $ 276,118 $ (52,005 ) $ (6,575 ) $ (161,344 ) $ (3,094 ) $ 53,393

Six Months Ended January 31, 2020
(in thousands)
IDT Corporation Stockholders

Class A
Common Stock Class B
Common Stock Additional
Paid-In
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Noncontrolling
Interests Total
Equity
BALANCE AT JULY 31, 2019 $ 33 $ 258 $ 273,313 $ (51,739 ) $ (4,858 ) $ (160,763 ) $ (2.687 ) $ 53,557
Exercise of stock options — — 276 — — — — 276
Restricted Class B common stock purchased from employees — — — (266 ) — — — (266 )
Stock-based compensation — 2 2,529 — — — — 2,531
Distributions to noncontrolling interests — — — — — — (470 ) (470 )
Other comprehensive loss — — — — (1,717 ) — — (1,717 )
Net loss — — — — — (581 ) 63 (518 )
BALANCE AT JANUARY 31, 2020 $ 33 $ 260 $ 276,118 $ (52,005 ) $ (6,575 ) $ (161,344 ) $ (3,094 ) $ 53,393

See accompanying notes to consolidated financial statements.

IDT CORPORATION

~~IDT CORPORATION~~

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	2021			2020
	Three Months Ended October 31,
	2021			2020
	(in thousands)
Operating activities
Net (loss) income	$	(2,345	)	$	8,415
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		4,446			4,493
Deferred income taxes		(413	)		3,104
Provision for doubtful accounts receivable		716			579
Net unrealized loss from marketable securities		13,386			17
Stock-based compensation		285			506
Other		1,718			1,077
Changes in assets and liabilities:
Trade accounts receivable		(5,638	)		(4,020	)
Disbursement prefunding, prepaid expenses, other current assets, and other assets		(7,563	)		7,318
Trade accounts payable, accrued expenses, other current liabilities, and other liabilities		3,265			(2,023	)
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)		(13,069	)		(549	)
Deferred revenue		(641	)		(150	)
Net cash (used in) provided by operating activities		(5,853	)		18,767
Investing activities
Capital expenditures		(4,353	)		(4,564	)
Purchase of convertible preferred stock in equity method investment		(1,051	)		—
Purchases of debt securities and equity investments		(6,260	)		(29,295	)
Proceeds from maturities and sales of debt securities and redemption of equity investments		3,867			6,596
Net cash used in investing activities		(7,797	)		(27,263	)
Financing activities
Distributions to noncontrolling interests		(183	)		(28	)
Proceeds from other liabilities		2,302			—
Repayment of other liabilities		(1,242	)		(40	)
Proceeds from sale of redeemable equity in subsidiary		10,000			—
Proceeds from exercise of stock options		—			185
Repurchases of Class B common stock		(26	)		(2,856	)
Net cash provided by (used in) financing activities		10,851			(2,739	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents		(2,257	)		(1,859	)
Net decrease in cash, cash equivalents, and restricted cash and cash equivalents		(5,056	)		(13,094	)
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	$	221,860		$	188,128

Six Months Ended
January 31,

2021

2020

(in thousands)
Operating activities
Net income (loss) $ 21,620 $ (518 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 8,956 10,479
Deferred income taxes 5,881 1,587
Provision for doubtful accounts receivable 1,069 1,466
Stock-based compensation 940 2,531
Other (17 ) (412 )
Change in assets and liabilities:
Trade accounts receivable (7,330 ) 6,253
Prepaid expenses, other current assets and other assets 4,965 (9,315 )
Trade accounts payable, accrued expenses, other current liabilities, and other liabilities 1,631 (11,488 )
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank) (11,136 ) (20,613 )
Deferred revenue (968 ) (3,260 )
Net cash provided by (used in) operating activities 25,611 (23,290 )
Investing activities
Capital expenditures (8,825 ) (7,656 )
Payments for acquisitions, net of cash acquired (2,388 ) (450 )
Purchase of Rafael Holdings, Inc. Class B common stock and warrant (5,000 ) —
Purchases of debt securities and equity investments (34,436 ) (8,994 )
Proceeds from maturities and sales of debt securities and redemptions of equity investments 11,575 2,672
Net cash used in investing activities (39,074 ) (14,428 )
Financing activities
Distributions to noncontrolling interests (418 ) (470 )
Repayment of other liabilities. (56 ) (79 )
Repayments of borrowings under revolving credit facility — (273 )
Proceeds from borrowings under revolving credit facility — 273
Proceeds from exercise of stock options 686 276
Repurchases of Class B common stock (4,192 ) (266 )
Net cash used in financing activities (3,980 ) (539 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents 5,560 14,152
Net decrease in cash, cash equivalents, and restricted cash and cash equivalents (11,883 ) (24,105 )
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 201,222 257,199
Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 189,339 $ 233,094
Supplemental schedule of non-cash investing and financing activities
Liabilities incurred for acquisition $ 393 $ 375

See accompanying notes to consolidated financial statements.

IDT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
~~(Unaudited)~~

~~Note 1—Basis of Presentation~~(Unaudited)

Note 1—Basis of Presentation

The accompanying unaudited consolidated financial statements of IDT Corporation and its subsidiaries (the “Company” or “IDT”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three ~~and six~~ months ended ~~January~~October 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, ~~2021.~~2022. The balance sheet at July 31, ~~2020~~2021 has been derived from the Company’s audited financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, ~~2020,~~2021, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal ~~2021~~2022 refers to the fiscal year ending July 31, ~~2021)~~2022).

~~Note 2—Business Segment Information~~

As of August 1, 2020, the Company revised its reportable business segments to reflect the growth of its financial technology and cloud communications businesses and their increased contributions to the Company’s consolidated results. Note 2—Business Segment Information

The Company ~~now~~ has 3 reportable business segments, Fintech, net2phone-Unified Communications as a Service (“UCaaS”), and Traditional Communications. The revised reportable business segments reflect management’s approach to analyzing results, its resource allocation strategy, and its assessment of business performance. Comparative segment information has been reclassified and restated in all periods to conform to the current period presentation.

The Company’s reportable segments are distinguished by types of service, customers, and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. There are no significant asymmetrical allocations to segments. The Company evaluates the performance of its business segments based primarily on income (loss) from operations.

The Fintech segment ~~comprises~~is comprised of National Retail Solutions (“NRS”), an operator of a nationwide point of sale (“POS”) network providing payment processing, digital advertising, transaction data, and ancillary services, and BOSS Revolution Money Transfer, a provider of international money remittance and related value/payment transfer services, and National Retail Solutions (“NRS”), operator of a nationwide point of sale (“POS”) retail network providing payment processing, digital advertising, transaction data, and ancillary services. ~~BOSS Revolution Money Transfer and NRS were previously included in the Company’s Telecom & Payment Services segment.~~

The net2phone-UCaaS segment ~~comprises~~is comprised of net2phone’s cloud communications ~~offerings, which were previously included in the Company’s net2phone segment.~~offerings.

The Traditional Communications segment includes ~~BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States,~~ Mobile Top-Up, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts, BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada, and Carrier Services, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes ~~net2phone-Platform Services, which provides telephony services to cable operators and~~ other ~~offerings that leverage a common technology platform, as well as~~ smaller ~~communications and payments offerings,~~businesses, many in harvest mode. Most of the Traditional Communications segment was previously included in the Company’s Telecom & Payment Services segment except for net2phone-Platform Services, which was previously included in the Company’s net2phone segment.

Corporate costs include compensation, consulting fees, treasury, tax and accounting services, human resources, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, business development, charitable contributions, travel, and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.

Operating results for the business segments of the Company were as follows:

Schedule of Operating Results of Business Segments

(in thousands)	Fintech			net2phone- UCaaS			Traditional Communications		Corporate			Total
Three Months Ended October 31, 2021
Revenues	$	22,568		$	12,913		$	334,602	$	—		$	370,083
(Loss) income from operations		(45	)		(4,198	)		20,125		(2,109	)		13,773

Three Months Ended October 31, 2020
Revenues	$	20,087		$	9,702		$	313,636	$	—		$	343,425
Income (loss) from operations		3,136			(3,880	)		15,861		(1,864	)		13,253

(in thousands) Fintech net2phone-
UCaaS Traditional Communications Corporate Total
Three Months Ended January 31, 2021
Revenues $ 18,497 $ 10,738 $ 310,531 $ — $ 339,766
(Loss) income from operations (247 ) (3,248 ) 18,712 (2,294 ) 12,923

Three Months Ended January 31, 2020
Revenues $ 9,741 $ 7,915 $ 306,234 $ — $ 323,890
(Loss) income from operations (3,177 ) (3,787 ) 10,782 (2,495 ) 1,323

Six Months Ended January 31, 2021
Revenues $ 38,585 $ 20,366 $ 624,240 $ — $ 683,191
Income (loss) from operations 2,889 (7,059 ) 34,502 (4,158 ) 26,174

Six Months Ended January 31, 2020
Revenues $ 19,298 $ 15,122 $ 629,669 $ — $ 664,089
(Loss) income from operations (5,847 ) (7,495 ) 18,268 (4,996 ) (70 )

Note 3—Revenue Recognition

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications and payment offerings as well as wholesale international voice and SMS termination. BOSS Revolution Money Transfer, NRS, and net2phone-UCaaS are technology-driven, synergistic businesses that leverage the Company’s core assets, and revenue is primarily recognized at a point in time, and in some cases (mainly net2phone-UCaaS) is recognized over time. Traditional Communications are mostly minute-based, paid-voice communications services, and revenue is primarily recognized at a point in time. The Company’s most significant revenue streams are from ~~BOSS Revolution Calling,~~ Mobile Top-Up, ~~and Carrier Services.~~ BOSS Revolution Calling, and Carrier Services. Mobile Top-Up and BOSS Revolution Calling are sold direct-to-consumers and through distributors and retailers.

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

(in thousands)
BOSS Revolution Money Transfer $ 13,280 $ 7,660 $ 28,438 $ 14,861
National Retail Solutions 5,217 2,081 10,147 4,437
Total Fintech 18,497 9,741 38,585 19,298
net2phone-UCaaS 10,738 7,915 20,366 15,122
Mobile Top-Up 96,562 75,836 192,397 152,669
BOSS Revolution Calling 113,903 113,861 231,253 231,195
Carrier Services 87,155 101,659 174,928 215,176
Other 12,911 14,878 25,662 30,629
Total Traditional Communications 310,531 306,234 624,240 629,669
Total $ 339,766 $ 323,890 $ 683,191 $ 664,089

Schedule of Revenues Disaggregated by Business Segment and Service Offered to Customers

	Three Months Ended October 31,
	2021		2020
	(in thousands)
BOSS Revolution Money Transfer	$	12,496	$	15,157
National Retail Solutions		10,072		4,930
Total Fintech		22,568		20,087
net2phone-UCaaS		12,913		9,702
Mobile Top-Up		128,485		95,835
BOSS Revolution Calling		105,969		117,350
Carrier Services		89,195		87,773
Other		10,953		12,678
Total Traditional Communications		334,602		313,636
Total	$	370,083	$	343,425

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location. On ~~July 31, 2020,~~February 1, 2021, the Company ~~restructured certain operations for tax purposes resulting in~~changed the ~~change of~~ geographic sourcing of certain revenues from the ~~Netherlands~~United States to the United ~~States.~~Kingdom.

Schedule of Revenues Disaggregated by Geographic Region

(in thousands)	Fintech		net2phone-UCaaS		Traditional Communications		Total
Three Months Ended October 31, 2021
United States	$	22,568	$	6,824	$	238,692	$	268,084
Outside the United States:
United Kingdom		—		—		81,769		81,769
Other		—		6,089		14,141		20,230
Total outside the United States		—		6,089		95,910		101,999
Total	$	22,568	$	12,913	$	334,602	$	370,083

(in thousands)	Fintech		net2phone- UCaaS		Traditional Communications		Total		Fintech		net2phone-UCaaS		Traditional Communications		Total
Three Months Ended January 31, 2021
Three Months Ended October 31, 2020
United States	$	18,497	$	5,677	$	265,318	$	289,492	$	20,087	$	5,090	$	270,623	$	295,800
Outside the United States:
United Kingdom		—		—		31,929		31,929		—		—		29,421		29,421
Netherlands		—		—		5		5
Other		—		5,061		13,279		18,340		—		4,612		13,592		18,204
Total outside the United States		—		5,061		45,213		50,274		—		4,612		43,013		47,625
Total	$	18,497	$	10,738	$	310,531	$	339,766	$	20,087	$	9,702	$	313,636	$	343,425

(in thousands) Fintech net2phone-
UCaaS Traditional Communications Total
Three Months Ended January 31, 2020
United States $ 9,741 $ 3,695 $ 206,129 $ 219,565
Outside the United States:
United Kingdom — 3 36,151 36,154
Netherlands — — 49,692 49,692
Other — 4,217 14,262 18,479
Total outside the United States — 4,220 100,105 104,325

Total $ 9,741 $ 7,915 $ 306,234 $ 323,890

(in thousands) Fintech net2phone-
UCaaS Traditional Communications Total
Six Months Ended January 31, 2021
United States $ 38,585 $ 10,758 $ 535,949 $ 585,292
Outside the United States:
United Kingdom — — 61,350 61,350
Netherlands — — 7 7
Other — 9,608 26,934 36,542
Total outside the United States — 9,608 88,291 97,899
Total $ 38,585 $ 20,366 $ 624,240 $ 683,191

(in thousands) Fintech net2phone-
UCaaS Traditional Communications Total
Six Months Ended January 31, 2020
United States $ 19,298 $ 6,967 $ 420,442 $ 446,707
Outside the United States:
United Kingdom — 7 71,943 71,950
Netherlands — — 104,634 104,634
Other — 8,148 32,650 40,798
Total outside the United States — 8,155 209,227 217,382

Total $ 19,298 $ 15,122 $ 629,669 $ 664,089

Remaining Performance Obligations

The Company does not have any significant revenue from performance obligations satisfied or partially satisfied in previous reporting periods. The Company’s remaining performance obligations at ~~January~~October 31, 2021 and July 31, ~~2020~~2021 had an original expected duration of one year or less.

Accounts Receivable and Contract Balances

The timing of revenue recognition may differ from the time of billing to the Company’s customers. Trade accounts receivable in the Company’s consolidated balance sheets represent unconditional rights to consideration. An entity records a contract asset when revenue is recognized in advance of the entity’s right to bill and receive consideration. The Company has not identified any contract assets.

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The ~~primary component of the~~ Company’s contract liability balance is primarily payments received for prepaid BOSS Revolution Calling. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company’s consolidated balance sheets as “Deferred revenue”.

The following table presents information about the Company’s contract liability balance:

Schedule of Information About Contract Liability Balance

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period $ 22,818 $ 24,957 $ 26,451 $ 35,146

	2021		2020
	Three Months Ended October 31,
	2021		2020
	(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period	$	22,456	$	23,460

Deferred Customer Contract Acquisition and Fulfillment Costs

The Company recognizes as an asset its incremental costs of obtaining a contract with a customer that it expects to recover. The Company charges its direct costs to fulfill contracts to expense as incurred. The Company’s incremental costs of obtaining a contract with a customer are sales commissions paid to acquire customers. The Company applies the practical expedient whereby the Company primarily charges these costs to expense when incurred because the amortization period would be one year or less for the asset that would have been recognized from deferring these costs. For net2phone-UCaaS sales, employees and third parties receive commissions on sales to end users. The Company amortizes the deferred costs over the expected customer relationship period when it is expected to exceed one year.

The Company’s deferred customer contract acquisition costs were as follows:

Schedule of Deferred Customer Contract Acquisition Costs

	January 31, 2021		July 31, 2020		October 31,2021		July 31, 2021
	(in thousands)				(in thousands)
Deferred customer contract acquisition costs included in “Other current assets”	$	3,066	$	2,350	$	3,787	$	3,460
Deferred customer contract acquisition costs included in “Other assets”		2,946		2,384		3,241		3,151
Total	$	6,012	$	4,734	$	7,028	$	6,611

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

(in thousands)
Amortization of deferred customer contract acquisition costs $ 864 $ 615 $ 1,631 $ 1,166

Schedule of Amortization of Deferred Customer Contract Acquisition Costs

	2021		2020
	Three Months Ended October 31,
	2021		2020
	(in thousands)
Amortization of deferred customer contract acquisition costs	$	1,012	$	767

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from one to ~~five years.~~six years. net2phone-UCaaS also has operating leases for office equipment. Certain of these leases contain renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise the options to extend or terminate the leases.

net2phone-UCaaS ~~has~~is the lessee in equipment leases that are classified as ~~finance leases, and net2phone-UCaaS is the lessor in various equipment leases that are classified as sales-type~~ finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

~~On March 26, 2018, the~~

The Company ~~completed a pro rata distribution of the common stock that the Company held in the Company’s former subsidiary,~~leases office and parking space from Rafael Holdings, Inc. (“Rafael”) ~~to the Company’s stockholders of record as of the close of business on March 13, 2018 (the “Rafael Spin-Off”).~~in a building and parking garage located at 520 Broad Street, Newark, New Jersey. The Company also leases office space in Israel from Rafael. Howard S. Jonas, the Chairman of the Company’s Board of Directors, is also the Chairman of the Board of Directors ~~and Chief Executive Officer~~ of Rafael. ~~The Company leases office space and parking in Rafael’s building and parking garage located at 520 Broad St, Newark, New Jersey. The Company also leases office space in Israel from Rafael.~~ The Newark lease expires in April 2025 and the Israel lease expires in July ~~2025.~~2025. In each of the three months ended ~~January~~October 31, 2021 and 2020, the Company incurred lease costs of ~~$0.5 million, and in each of the six months ended January 31, 2021 and 2020, the Company incurred lease costs of $0.9~~$0.5 million in connection with the Rafael leases, which is included in operating lease cost in the table below.

Supplemental disclosures related to the Company’s operating leases were as follows:

Schedule of Supplemental Disclosures Related to the Company's Operating Leases

	2021		2020
	Three Months Ended October 31,
	2021		2020
	(in thousands)
Operating lease cost	$	700	$	729
Short-term lease cost		347		65
Total lease cost	$	1,047	$	794
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases	$	695	$	710

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

(in thousands)
Operating lease cost $ 697 $ 712 $ 1,425 $ 1,423
Short-term lease cost 130 75 195 133
Total lease cost $ 827 $ 787 $ 1,620 $ 1,556

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 672 $ 685 $ 1,382 $ 1,369

Schedule of Supplemental Disclosures Related Weighted Average Operating Leases

	October 31, 2021			July 31, 2021
Weighted-average remaining lease term-operating leases		3.4 years			3.4 years
Weighted-average discount rate-operating leases		2.9	%		2.9	%

January 31,
2021

July 31,
2020

Weighted-average remaining lease term-operating leases 3.7 years 4.2 years
Weighted-average discount rate-operating leases 2.9 % 3.12 %

On September ~~1, 2020,~~13, 2021, the Company entered into a new lease with an aggregate operating lease liability of ~~$0.6~~ $0.7 million. The Company’s aggregate operating lease liability was as follows:

Schedule of Aggregate Operating Lease Liability

	January 31, 2021		July 31, 2020		October 31, 2021		July 31, 2021
	(in thousands)					(in thousands)
Operating lease liabilities included in “Other current liabilities”	$	2,537	$	2,350	$	2,500	$	2,456
Operating lease liabilities included in noncurrent liabilities		6,514		7,353		5,533		5,473
Total	$	9,051	$	9,703	$	8,033	$	7,929

Future minimum maturities of operating lease liabilities were as follows (in thousands):

Schedule of Future Minimum Maturities of Operating Lease Liabilities

Twelve-month period ending October 31:
2022	$	2,698
2023		2,406
2024		1,967
2025		1,095
2026		139
Thereafter		154
Total lease payments		8,459
Less imputed interest		(426	)
Total operating lease liabilities	$	8,033

Twelve-month period ending January 31:
2022 $ 2,768
2023 2,526
2024 1,957
2025 1,844
2026 497
Thereafter —
Total lease payments 9,592
Less imputed interest (541 )
Total operating lease liabilities $ 9,051

Note 5—Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported in the consolidated balance sheets that equals the total of the same amounts reported in the consolidated statements of cash flows:

Schedule of Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

	October 31, 2021		July 31, 2021
	(in thousands)
Cash and cash equivalents	$	114,543	$	107,147
Restricted cash and cash equivalents		107,317		119,769
Total cash, cash equivalents, and restricted cash and cash equivalents	$	221,860	$	226,916

January 31,
2021

July 31,
2020

(in thousands)
Cash and cash equivalents $ 79,481 $ 84,860
Restricted cash and cash equivalents 109,858 116,362
Total cash, cash equivalents, and restricted cash and cash equivalents $ 189,339 $ 201,222

At ~~January~~October 31, 2021 and July 31, ~~2020,~~2021, restricted cash and cash equivalents included ~~$109.8~~ $101.8 million and ~~$116.3~~ $115.8 million, respectively, in restricted cash and cash equivalents for customer deposits held by IDT Financial Services Limited, the Company’s Gibraltar-based bank.

~~Note 6—Debt Securities~~

Company Restricted Cash and Cash Equivalents

The Company treats unrestricted cash and cash equivalents held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC, which provide the Company’s international money transfer services in the United States, as substantially restricted and unavailable for other purposes. At October 31, 2021 and July 31, 2021, “Cash and cash equivalents” in the Company’s consolidated balance sheets included an aggregate of $16.7 million and $15.3 million, respectively, held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC, that was unavailable for other purposes.

Note 6—Debt Securities

The following is a summary of available-for-sale debt securities:

Schedule of Available-for-sale Securities

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
October 31, 2021:
Certificates of deposit*	$	-	$	-	$	—		$	-
U.S. Treasury bills and notes	$	1,663	$	—	$	(36	)	$	1,627
Corporate bonds		6,276		33		(116	)		6,193
Municipal bonds		5,814		—		(1	)		5,813
Total	$	13,753	$	33	$	(153	)	$	13,633

July 31, 2021:
Certificates of deposit*	$	1,200	$	3	$	—		$	1,203
U.S. Treasury bills and notes		1,669		—		(17	)		1,652
Corporate bonds		6,327		38		(33	)		6,332
Municipal bonds		4,825		—		—			4,825
Total	$	14,021	$	41	$	(50	)	$	14,012

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Fair Value

(in thousands)
January 31, 2021:
Certificates of deposit* $ 4,608 $ 15 $ — $ 4,623
U.S. Treasury bills and notes 3,676 — (9 ) 3,667
Corporate bonds 6,233 68 (17 ) 6,284
Municipal bonds 6,925 2 — 6,927
Total $ 21,442 $ 85 $ (26 ) $ 21,501
July 31, 2020:
Certificates of deposit* $ 13,844 $ 58 $ — $ 13,902
U.S. Treasury bills 2,498 — — 2,498
Municipal bonds 1,979 — (16 ) 1,963
Total $ 18,321 $ 58 $ (16 ) $ 18,363

Each of the Company’s certificates of deposit has a CUSIP, was purchased in the secondary market through a broker and may be sold in the secondary market.

Proceeds from maturities and sales of debt securities and redemptions of equity investments were ~~$5.0~~ $3.9 million and ~~$1.9~~ $6.6 million in the three months ended ~~January 31, 2021 and 2020, respectively, and $11.6 million and $2.7 million in the six months ended January~~October 31, 2021 and 2020, respectively. There were no realized gains or realized losses from sales of debt securities in the three ~~and six~~ months ended ~~January~~October 31, 2021 and 2020. The Company uses the specific identification method in computing the realized gains and realized losses on the sales of debt securities.

The contractual maturities of the Company’s available-for-sale debt securities at ~~January~~October 31, 2021 were as follows:

Schedule of Contractual Maturities of Available-for-sale Debt Securities

	Fair Value		Fair Value
	(in thousands)		(in thousands)
Within one year	$	9,688	$	1,258
After one year through five years		6,447		6,326
After five years through ten years		4,611		5,249
After ten years		755		800

Total	$	21,501	$	13,633

The following available-for-sale debt securities were in an unrealized loss position for which other-than-temporary impairments were not recognized:

Schedule of Available-for-sale Securities, Unrealized Loss Position

	Unrealized Losses		Fair Value
	(in thousands)
October 31, 2021:
U.S. Treasury bills and notes	$	36	$	1,627
Corporate bonds		116		5,572
Municipal bonds		1		4,569
Total	$	153	$	11,768

July 31, 2021:
U.S. Treasury bills and notes	$	17	$	1,652
Corporate bonds		33		3,293
Total	$	50	$	4,945

Unrealized Losses

Fair Value

(in thousands)
January 31, 2021:
U.S. Treasury bills and notes $ 9 $ 1,667
Corporate bonds 17 1,690
Total $ 26 $ 3,357

July 31, 2020:
Municipal bonds $ 16 $ 1,963

~~At January~~July 31, 2021, ~~and July 31, 2020,~~ there were no securities in a continuous unrealized loss position for 12 months or longer. At October 31, 2021, the following available-for-sale debt securities included in the table above were in a continuous unrealized loss position for 12 months or longer:

Schedule of Continuous Unrealized Loss Position for 12 Months or Longer

	Unrealized Losses		Fair Value
	(in thousands)
U.S. Treasury bills and notes	$	36	$	1,627
Corporate bonds		44		1,219
Total	$	80	$	2,846

~~Note 7—Equity Investments~~At October 31, 2021, the Company did not intend to sell any of the debt securities included in the table above, and it is not more likely than not that the Company will be required to sell any of these securities before recovery of the unrealized losses, which may be at maturity.

Note 7—Equity Investments

Equity investments consist of the following:

Schedule of Equity Investments

	January 31, 2021		July 31, 2020		October 31, 2021		July 31, 2021
	(in thousands)				(in thousands)
Zedge, Inc. Class B common stock, 42,282 shares at January 31, 2021 and July 31, 2020	$	307	$	59
Rafael Holdings, Inc. Class B common stock, 28,320 and 27,806 shares at January 31, 2021 and July 31, 2020, respectively		665		389
Zedge, Inc. Class B common stock, 42,282 shares at October 31, 2021 and July 31, 2021					$	488	$	649
Rafael Holdings, Inc. Class B common stock, 290,214 and 246,565 shares at October 31, 2021 and July 31, 2021, respectively						2,194		12,479
Rafael Holdings, Inc. restricted Class B common stock, nil and 43,649 shares at October 31, 2021 and July 31, 2021, respectively						—		2,209
Other marketable equity securities						5,186		3,630
Fixed income mutual funds		23,374		5,516		23,276		23,467
Current equity investments	$	24,346	$	5,964	$	31,144	$	42,434

Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”)	$	1,939	$	3,825	$	2,119	$	2,465
Visa Inc. Series A Convertible Participating Preferred Stock (“Visa Series A Preferred”)		2,416		—
Rafael Holdings, Inc. warrant		380		—
Series B and Series C convertible preferred stock—equity method investment						3,329		2,901
Hedge funds		3,481		4,783		2,814		3,563
Other		2,225		225		1,225		2,725
Noncurrent equity investments	$	10,441	$	8,833	$	9,487	$	11,654

~~On June 1, 2016,~~The Company received the ~~Company completed a pro rata distribution~~shares of ~~the common stock that the Company held in the Company’s subsidiary~~ Zedge, Inc. (“Zedge”) ~~to the Company’s stockholders of record as of the close of business on May 26, 2016. Howard S. Jonas is the Vice-Chairman of the Board of Directors of Zedge. The Company received the Zedge~~ Class B common stock and 28,320 of theshares ~~and the~~of Rafael Class B common ~~shares~~stock set forth in the table above in connection with the lapsing of restrictions on Zedge and Rafael restricted stock held by certain of the Company’s employees and the Company’s payment of taxes related thereto.

~~On December 7, 2020, the~~ The Company purchased ~~from Rafael 218,245 newly issued~~ 261,894 shares of ~~Rafael’s~~Rafael Class B common stock and a warrant to purchase up to 43,649 shares of Rafael’s Class B common stock at an exercise price of $22.91 at any time on or after December 7, 2020 and on or prior to June 6, 2022. The aggregate purchase price of $5.0 million was allocated $4.6 million toin fiscal 2021. Howard S. Jonas is the ~~shares and $0.4 million to the warrant based on their relative purchase date fair values. The fair value~~Vice-Chairman of the ~~warrant on the acquisition date was estimated using a Black-Scholes valuation model that represents a Level 3 measurement. The purchase price was based on a per share price~~Board of ~~$22.91, which was the closing price~~Directors of Rafael’s Class B common stock on the New York Stock Exchange on the trading day immediately preceding December 7, 2020. At January 31, 2021, these shares of Rafael’s Class B common stock and the warrant were not available for sale, assignment, or transfer. The value of the shares at January 31, 2021 of $5.1 million was included in “Other current assets” in the consolidated balance sheets.

In June 2016, upon the acquisition of Visa Europe Limited by Visa, Inc. (“Visa”), IDT Financial Services Limited received 1,830 shares of Visa Series C Preferred among other consideration. At July 31, 2020, each share of Visa Series C Preferred was convertible into 13.722 shares of Visa Class A common stock (the “Conversion Adjustment), subject to certain conditions, and will be convertible at the holder’s option beginning in June 2028. On September 24, 2020, in connection with Visa’s first mandatory release assessment, the Company received 125 shares of Visa Series A Preferred and the Conversion Adjustment for Visa Series C Preferred was reduced to 6.861. The 125 shares of Visa Series A Preferred are convertible into 12,500 shares of Visa Class A common stock.Zedge.

The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

Schedule of Carrying Value of Equity Investments

										2021			2020
	Three Months Ended January 31,				Six Months Ended January 31,					Three Months Ended October 31,
	2021		2020		2021			2020		2021			2020
	(in thousands)									(in thousands)
Balance, beginning of period	$	2,109	$	3,937	$	4,109		$	3,919	$	2,743		$	4,109
Redemption for Visa mandatory release assessment		—		—		(1,870	)		—		—			(1,870	)
Adjustment for observable transactions involving a similar investment from the same issuer		114		408		(16	)		426		(346	)		(130	)
Impairments		—		—		—			—		—			—
Balance, end of the period	$	2,223	$	4,345	$	2,223		$	4,345	$	2,397		$	2,109

In the three months ended January 31, 2021 and the three and six months ended January 31, 2020, the Company increased the carrying value of the shares of Visa Series C Preferred it held by $0.1 million, $0.4 million, and $0.4 million, respectively, and in the six months ended January 31, 2021, the

The Company decreased the carrying value of the shares of Visa Series C Preferred it held by ~~$16,000,~~$0.3 million and $0.1 million in the three months ended October 31, 2021 and 2020, respectively, based on the fair value of Visa Class A common stock and a discount for lack of current marketability.

Unrealized gains and losses for all equity investments included the following:

Schedule of Unrealized (losses) Gains for All Equity Investments

	2021			2020
	Three Months Ended October 31,
	2021			2020
	(in thousands)
Net losses recognized during the period on equity investments	$	(14,494	)	$	(920	)
Less: net gains and losses recognized during the period on equity investments sold during the period		—			—
Unrealized losses recognized during the period on equity investments still held at the reporting date	$	(14,494	)	$	(920	)

The net losses on investments in the three months ended October 31, 2021 was primarily from unrealized losses of $12.5 million on shares of Rafael Class B common stock.

Three Months Ended
January 31, Six Months Ended
January 31,
2021 2020 2021 2020
(in thousands)
Net gains recognized during the period on equity investments $ 1,307 $ 383 $ 387 $ 409
Less: net gains and losses recognized during the period on equity investments sold during the period — — — —
Unrealized gains recognized during the period on equity investments still held at the reporting date $ 1,307 $ 383 $ 387 $ 409

~~Subsequent Event—MarketSpark, Inc.~~Equity Method Investment

On February 2, 2021, the Company paid ~~$4.0~~$4.0 million to purchase shares of ~~MarketSpark, Inc. Series~~series B ~~Convertible Preferred Stock representing 23.95%~~convertible preferred stock of a communications company (the equity method investee, or “EMI”), and on August 10, 2021, the Company paid $1.1 million to purchase shares of the EMI’s series C convertible preferred stock and additional shares of the EMI’s series B convertible preferred stock. The initial shares purchased represented 23.95% of the outstanding shares of ~~MarketSpark~~the EMI on an as converted basis. ~~MarketSpark, which is based in San Diego, California, replaces telephone lines in commercial buildings, such~~The subsequent purchases increased the Company’s ownership to 26.57% on an as ~~the ones used in fire panels, elevators, emergency phone lines, point-of-sale terminals, and fax lines, with cellular connections.~~

~~Note 8—Fair Value Measurements~~converted basis.

The Company accounts for this investment using the equity method since the series B and series C convertible preferred stock are in-substance common stock, and the Company can exercise significant influence over the operating and financial policies of the EMI.

The Company determined that on the dates of the acquisitions, there were differences of $3.4 million and $1.0 million between its investment in the EMI and its proportional interest in the equity of the EMI, which represented the Company’s share of the EMI’s customer list on the dates of the acquisitions. These basis differences are being amortized over the 6-year estimated life of the customer list. In the accompanying consolidated statements of operations, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other expense, net” (see Note 18).

The following table summarizes the change in the balance of the Company’s equity method investment:

Summary of Changes in Equity Method Investments

	Three Months Ended October 31,
	2021			2020
	(in thousands)
Balance, beginning of period	$	2,901		$	—
Purchase of convertible preferred stock		1,051			—
Equity in the net loss of investee		(441	)		—
Amortization of equity method basis difference		(182	)		—
Balance, end of period	$	3,329		$	—

Summarized financial information of the EMI was as follows:

Summary of Statements of Operations

	Three Months Ended October 31,
	2021			2020
	(in thousands)
Revenues	$	1,691		$	—
Costs and expenses:
Direct cost of revenues		1,462			—
Selling, general and administrative		1,889			—
Depreciation and amortization		-			-
Severance		-			-
Total costs and expenses		3,351			—
Loss from operations		(1,660	)		—
Other expense		(1	)		—
Net loss	$	(1,661	)	$	—

Note 8—Fair Value Measurements

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

Schedule of Balance of Assets Measured at Fair Value On a Recurring Basis

	Level 1 (1)		Level 2 (2)		Level 3 (3)			Total			Level 1 (1)		Level 2 (2)		Level 3 (3)			Total
	(in thousands)										(in thousands)
January 31, 2021
October 31, 2021
Debt securities	$	3,667	$	17,834	$	—		$	21,501		$	1,627	$	12,006	$	—		$	13,633
Equity investments included in current assets		29,470		—		—			29,470			31,144		—		—			31,144
Equity investments included in noncurrent assets		—		2,416		2,319			4,735			—		—		2,119			2,119
Total	$	33,137	$	20,250	$	2,319		$	55,706		$	32,771	$	12,006	$	2,119		$	46,896

Contingent consideration included in other noncurrent liabilities	$	—	$	—	$	(799	)	$	(799	)
Contingent consideration included in:
Other current liabilities											$	—	$	—	$	(628	)	$	(628	)
Other noncurrent liabilities												—		—		(387	)		(387	)

July 31, 2020
Total											$	—	$	—	$	(1,015	)	$	(1,015	)

July 31, 2021
Debt securities	$	2,498	$	15,865	$	—		$	18,363		$	1,652	$	12,360	$	—		$	14,012
Equity investments included in current assets		5,964		—		—			5,964			40,225		2,209		—			42,434
Equity investments included in noncurrent assets		—		—		3,825			3,825			—		—		2,465			2,465

Total	$	8,462	$	15,865	$	3,825		$	28,152		$	41,877	$	14,569	$	2,465		$	58,911

Contingent consideration included in other noncurrent liabilities	$	—	$	—	$	(396	)	$	(396	)
Contingent consideration included in:
Other current liabilities											$	—	$	—	$	(628	)	$	(628	)
Other noncurrent liabilities												—		—		(397	)		(397	)

Total											$	—	$	—	$	(1,025	)	$	(1,025	)

(1)

– quoted prices in active markets for identical assets or liabilities

(2)

– observable inputs other than quoted prices in active markets for identical assets and liabilities

(3)

– no observable pricing inputs in the market

At ~~January~~October 31, 2021 and July 31, ~~2020,~~2021, the Company had ~~$3.5~~ $2.8 million and ~~$4.8~~ $3.6 million, respectively, in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method, therefore they were not measured at fair value.

The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Schedule of Assets Measured at Fair Value On a Recurring Basis Using Significant Unobservable Inputs (Level 3)

	Three Months Ended January 31,				Six Months Ended January 31,					Three Months Ended October 31,
	2021		2020		2021			2020		2021			2020
	(in thousands)									(in thousands)
Balance, beginning of period	$	1,825	$	3,637	$	3,825		$	3,619	$	2,465		$	3,825
Purchase of Rafael Holdings, Inc. warrant		354		—		354			—
Redemption for Visa mandatory release assessment		—		—		(1,870	)		—		—			(1,870	)
Total gains recognized in “Other income, net”		140		408		10			426
Total losses included in “Other expense, net”											(346	)		(130	)
Balance, end of period	$	2,319	$	4,045	$	2,319		$	4,045	$	2,119		$	1,825

Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period	$	—	$	—	$	—		$	—	$	—		$	—

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Schedule of Liabilities Measured at Fair Value On a Recurring Basis Using Significant Unobservable Inputs (Level 3)

	Three Months Ended January 31,					Six Months Ended January 31,					Three Months Ended October 31,
	2021		2020			2021		2020			2021			2020
	(in thousands)										(in thousands)
Balance, beginning of period	$	391	$	—		$	396	$	—		$	1,025		$	396
Transfer into Level 3 from acquisitions (see Note 9)		393		375			393		375
Total loss (gain) included in “Foreign currency translation adjustment”		15		(5	)		10		(5	)
Total gains included in “Foreign currency translation adjustment”												(10	)		(5	)
Balance, end of period	$	799	$	370		$	799	$	370		$	1,015		$	391

Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period	$	—	$	—		$	—	$	—		$	—		$	—

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Cash and cash equivalents, restricted cash and cash equivalents, other current assets, customer deposits, and other current liabilities. At ~~January~~October 31, 2021 and July 31, ~~2020,~~2021, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash, cash equivalents, and restricted cash and cash equivalents were classified as Level 1 and other current assets, customer deposits, and other current liabilities were classified as Level 2 of the fair value hierarchy.

Other assets and other liabilities. At ~~January~~October 31, 2021 and July 31, ~~2020,~~2021, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.

Note 9—Acquisition

~~Note 9—Acquisitions~~

On December 3, 2020, the Company’s subsidiary IDT International Telecom, Inc. (“IDTIT”) acquired ~~51%~~51% of the issued shares of a company that provides a digital ~~distribution~~ platform facilitating supply and distribution of mobile airtime and data top-ups and other services across ~~borders via~~borders. The purchase price was $2.4 million, net of cash acquired. The Company also recorded $0.4 million for the estimated fair value of contingent consideration of $0.5 million. Pursuant to a ~~single point application programming interface. The operating results~~Put/Call Option Agreement related to the 5% of the issued shares of the acquired company that the seller did not initially sell to IDTIT (“Option Shares”), the seller exercised its option and on March 22, 2021, IDTIT purchased the Option Shares for $0.3 million. On June 15, 2021, IDTIT purchased 19% of the issued shares of the acquired company from the ~~date of acquisition, which were not significant, are included in~~remaining noncontrolling interest holder for $1.0 million. The Company also recorded $0.2 million for the ~~Company’s consolidated financial statements.~~

~~The acquisition date~~estimated fair value of ~~the consideration consisted of the following (in thousands):~~

Cash paid $ 2,732
Cash acquired (344 )
Cash paid, net of cash acquired 2,388
Contingent consideration 393
Total fair value of consideration, net of cash acquired $ 2,781

~~The~~ contingent consideration of $0.5 million will be paid (a) no later than November 30, 2021 if the acquired company generates EBITDA of no less than $1.0 million between October 1, 2020 and September 30, 2021; or (b) no later than November 30, 2022 if the acquired company generates EBITDA of no less than $1.0 million between October 1, 2021 and September 30, 2022. The acquisition-date fair value of the contingent consideration was estimated using discounted cash flow models. This fair value measurement was based on significant inputs not observable in the market and therefore represents a Level 3 measurement.up to $0.3 million. There was no change in the estimated fair value of the contingent consideration in the ~~period from the acquisition date to January~~three months ended October 31, 2021.

In addition, IDTIT paid the $0.1 million loan payable from the acquired company to the seller, and the loan payable was assigned to IDTIT. Also, a subsidiary of the Company and the seller entered into a Put/Call Option Agreement related to the 5% of the issued shares of the acquired company that were not sold to IDTIT (“Option Shares”). On February 2, 2021, the seller exercised its option to cause the Company’s subsidiary to purchase the Option Shares for $0.3 million. To date, the purchase of the Options Shares is still in process.

~~The impact of the acquisition’s purchase price allocations on the Company’s consolidated balance sheet was as follows (in thousands):~~

Trade accounts receivable $ 656
Prepaid expenses 1,644
Property, plant and equipment 75
Goodwill 1,894
Customer relationships (15-year useful lives) 1,960
Tradenames (20-year useful lives) 440
Deferred income tax assets 197
Other assets 161
Trade accounts payable (1,306 )
Accrued expenses (423 )
Other current liabilities (329 )
Noncontrolling interests (2,188 )
Net assets excluding cash acquired $ 2,781

The goodwill was assigned to the Traditional Communications segment and was attributable primarily to the assembled workforces and the expected synergies from the business combination. The goodwill is not expected to be deductible for income tax purposes.

The Company’s pro forma results of operations as if the ~~acquisition~~acquisitions occurred on August 1, ~~2019 were not materially different from the actual results of operations.~~

~~Ringsouth Europa, S.L.~~

On December 11, 2019, the Company’s subsidiary, net2phone, Inc. acquired 100% of the outstanding shares of Ringsouth Europa, S.L. (“Ringsouth”), a regional provider of cloud communications services to businesses in Spain. The acquisition date fair value of the consideration consisted of the following:

Cash paid $ 450
Contingent consideration 375
Total fair value of consideration $ 825

Ringsouth’s operating results from the date of acquisition, which were not significant, were included in the Company’s consolidated financial statements. The Company’s pro forma results of operations as if the Ringsouth acquisition occurred on August 1, 20192020 were not materially different from the actual results of operations.

Note 10—~~Other Operating Gain (Expense), Net~~Variable Interest Entity

As of May 31, 2021, the Company entered into a Warrant Purchase Agreement with the shareholders of an entity (the variable interest entity, or “VIE”) that operates money transfer businesses. The Company determined that, effective May 31, 2021, it had the power to direct the activities of the VIE that most significantly impact its economic performance, and the Company has the obligation to absorb losses of and the right to receive benefits from the VIE that could potentially be significant to it. The Company therefore determined that it is the primary beneficiary of the VIE, and as a result, the Company consolidates the VIE. The Company does not currently own any interest in the VIE and thus the net income incurred by the VIE was attributed to noncontrolling interests in the accompanying consolidated statements of operations.

The VIE’s net income and aggregate funding repaid to the Company by the VIE were as follows:

Schedule of Net Income (loss) and Aggregate Funding Repaid to the Company By VIE

	Three Months Ended October 31,
	2021			2020
	(in thousands)
Net income of the VIE	$	144		$	—
Aggregate funding repaid to the Company by the VIE, net	$	(3	)	$	—

The VIE’s summarized consolidated balance sheet amounts are as follows:

VIE’s Summarized Consolidated Balance Sheet

	October 31, 2021			July 31, 2021
	(in thousands)
Assets:
Cash and equivalents	$	1,419		$	1,364
Restricted cash		5,384			3,848
Trade accounts receivable, net		31			91
Prepaid expenses		210			344
Other current assets		863			858
Total current assets		-			-
Goodwill		-			-
Property, plant, and equipment, net		652			637
Equity investments		-			-
Operating lease right-of-use assets		-			-
Deferred income tax assets, net		-			-
Other assets		-			-
Other intangibles, net		1,042			1,042

Total assets	$	9,601		$	8,184

Liabilities and noncontrolling interests:
Trade accounts payable	$	5		$	312
Accrued expenses		41			26
Other current liabilities		6,058			4,491
Due to the Company		5			8
Accumulated other comprehensive loss		(6	)		(7	)
Noncontrolling interests		3,498			3,354

Total liabilities and noncontrolling interests	$	9,601		$	8,184

The VIE’s assets may only be used to settle the VIE’s obligations and may not be used for other consolidated entities. The VIE’s liabilities are non-recourse to the general credit of the Company’s other consolidated entities.

Note 11—Other Operating Expense, Net

The following table summarizes the other operating ~~gain (expense),~~expense, net by business segment:

Schedule of Other Operating Expense, Net


	Three Months Ended October 31,
	2021			2020
	(in thousands)
Corporate—Straight Path Communications Inc. class action legal fees	$	(978	)	$	(321	)
Corporate—Straight Path Communications Inc. class action insurance claims		915			623
Traditional Communications—net2phone indemnification claim		(25	)		—
Traditional Communications—Carrier Services settlement		—			(554	)

Total other operating expense, net	$	(88	)	$	(252	)

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

(in thousands)
Corporate—Straight Path Communications Inc. class action legal fees net of insurance claims $ (306 ) $ (160 ) $ (4 ) $ (421 )
net2phone-UCaaS—other, net (100 ) (63 ) (100 ) (63 )
Traditional Communications—gain from sale of rights under class action lawsuit 2,000 — 2,000 —
Traditional Communications—net2phone indemnification claim (387 ) (169 ) (387 ) (534 )
Traditional Communications—Carrier Services settlement — — (554 ) —
Traditional Communications—accrual for non-income related taxes related to a foreign subsidiary — — — (2,150 )
Total other operating gain (expense), net $ 1,207 $ (392 ) $ 955 $ (3,168 )

Straight Path Communications Inc. Class Action

~~On July 31, 2013,~~As discussed in Note 17, the Company ~~completed~~(as well as other defendants) has been named in a ~~pro rata distribution~~pending putative class action on behalf of the ~~common stock~~stockholders of the Company’s former subsidiary, Straight Path Communications Inc. (“Straight Path”) ~~to the Company’s stockholders of record as of the close of business on July 25, 2013. As discussed in Note 14, there is~~, and a ~~pending putative class action on behalf of Straight Path’s stockholders and~~ derivative ~~complaint naming the Company, among others.~~complaint. The Company incurred legal fees ~~of $1.4 million~~ and $0.6 million in the three months ended January 31, 2021 and 2020, respectively, and $1.7 million and $1.2 million in the six months ended January 31, 2021 and 2020, respectively, related to this action. Also, the Company recorded offsetting gains from insurance claims ~~for~~related to this ~~matter of $1.1 million and $0.4 million~~action in the three months ended ~~January~~October 31, 2021 and ~~2020, respectively, and $1.7 million and $0.8 million in the six months ended January 31, 2021 and 2020, respectively.~~

~~Gain from Sale of Rights under Class Action Lawsuit~~

On December 21, 2020, the Company received $2.0 million from the sale to a third party of all its rights under the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. The lawsuit is about claims that merchants paid excessive fees to accept Visa and Mastercard cards between January 1, 2004 and January 25, 2019 because Visa and Mastercard, individually, and together with their respective member banks, violated the antitrust laws.2020.

Indemnification Claim

InBeginning in June 2019, as part of a commercial resolution, the Company indemnified a net2phone cable telephony customer related to patent infringement claims brought against the customer.

~~Accrual for Non-Income Related Taxes~~

~~In the six months ended January 31, 2020, the Company recorded an accrual for non-income related taxes related to one of its foreign subsidiaries.~~

Note ~~11—Equity~~12—Revolving Credit Facility

The Company’s subsidiary, IDT Telecom, Inc. (“IDT Telecom”), entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At October 31, 2021 and July 31, 2021, IDT Telecom had not borrowed any amounts under this facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the Intercontinental Exchange Benchmark Administration Ltd. LIBOR multiplied by the Regulation D maximum reserve requirement plus 125 to 175 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due in May 2024. IDT Telecom pays a quarterly unused commitment fee on the average daily balance of the unused portion of the $25.0 million commitment of 30 to 85 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of October 31, 2021, IDT Telecom was in compliance with all of the covenants.

Note 13—Equity

Stock Repurchases

The Company has an existing stock repurchase program authorized by its Board of Directors for the repurchase of shares of the Company’s Class B common stock. The Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. There were 0 repurchases under the program in the three months ended October 31, 2021. In the ~~six~~three months ended ~~January~~October 31, ~~2021,~~2020, the Company repurchased 463,792 shares of Class B common stock for an aggregate purchase price of ~~$2.8~~$2.8 million. ~~There were no repurchases under the program in six months ended January 31, 2020.~~ At ~~January~~October 31, 2021, 5.8 million shares remained available for repurchase under the stock repurchase program.

In the ~~six~~three months ended ~~January~~October 31, 2021 and 2020, the Company paid ~~$1.3 million~~ $26,000 and ~~$0.3 million,~~$7,000, respectively, to repurchase ~~109,381~~ 627 and ~~37,348~~ 1,053 shares, respectively, of the Company’s Class B common stock that were tendered by employees of the Company to satisfy the employees’ tax withholding obligations in connection with the ~~lapsing of restrictions on awards~~vesting of deferred stock units (“DSUs”) and lapsing of restrictions on restricted stock. Such shares were repurchased by the Company based on their fair market value on the trading day immediately prior to the vesting date.

Deferred Stock Units Equity Incentive Program

The Company has an existing equity incentive program in the form of DSUs that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. ~~On January 5, 2021,~~The number of shares issuable on the ~~second~~ vesting date ~~under~~varies between 50% to 200% of the ~~program, in accordance with~~number of DSUs that vest on that vesting date, depending on the ~~program and based on elections made by certain grantees,~~market price for the ~~Company issued 283,838 shares of its~~underlying Class B common stock ~~in respect~~on the vesting date relative to the market price at the time of ~~vested DSUs. Based on those elections, vesting for 19,919 DSUs was delayed until January 5, 2022.~~the grant. At ~~January~~October 31, 2021, there were 154,169 unvested DSUs outstanding ~~all of which~~that are eligible to vest (if the conditions therefor are satisfied) on January 5, 2022.

2015 Stock Option and Incentive Plan

In the ~~six~~three months ended ~~January~~October 31, ~~2021 and~~ 2020, the Company received proceeds from the exercise of stock options of ~~$0.7~~$0.2 million ~~and $0.3 million, respectively,~~ for which the Company issued ~~81,041 and 32,551~~21,894 shares ~~respectively,~~ of its Class B common stock. There were 0 stock option exercises in the three months ended October 31, 2021.

~~Grant~~On September 14, 2021, the Company’s Board of ~~Restricted Equity in net2phone 2.0, Inc.~~Directors amended the Company’s 2015 Stock Option and Incentive Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 175,000 shares. The amendment is subject to approval by the Company’s stockholders at its annual meeting of stockholders on December 15, 2021.

Note 14—Redeemable Noncontrolling Interest

On December 31, 2020, the previously approved compensatory arrangement with each of Howard S. Jonas and Shmuel Jonas, the Company’s Chief Executive Officer, was finalized. Howard S. Jonas and Shmuel Jonas each received 50 restricted September 29, 2021, NRS sold 862,442 shares of ~~net2phone 2.0, Inc. (“net2phone 2.0”)~~its Class B common stock, which represents 5%2.5% of its outstanding capital stock on a fully diluted basis, to Alta Fox Opportunities Fund LP (“Alta Fox”) for cash of $10 million. Alta Fox has the right to request that NRS redeem all or any portion of the ~~outstanding~~NRS common ~~stock~~shares that it purchased at the per share purchase price during a period of ~~net2phone 2.0. net2phone 2.0 is~~182 days following the fifth anniversary of this transaction. The redemption right shall terminate upon the consummation of (i) a ~~new entity that owns and operates the net2phone-UCaaS segment. The restricted shares will vest if: (a) for any fiscal quarter~~sale of net2phone 2.0 between November 1, 2020 and October 31, 2023, net2phone 2.0 records subscription revenue that is at least $18 million, and (b) as of October 31, 2023, the valuation of net2phone 2.0 is $100 million or more. The restricted shares will also vest in the event, prior to October 31, 2023, net2phone 2.0NRS or its assets for cash or securities that are ~~sold at an equity valuation and~~listed on a ~~cash-free basis~~national securities exchange, (ii) a public offering of ~~$100 million~~NRS’ securities, or ~~more, regardless~~(iii) a distribution of ~~whether the revenue threshold was satisfied prior thereto. The restricted~~NRS’ capital stock following which NRS’ common shares ~~entitle each grantee to proceeds only~~are listed on a ~~sale, spin-off, initial public offering, or other monetization~~national securities exchange.

The shares of ~~net2phone 2.0 and~~NRS’ Class B common stock sold to Alta Fox have ~~protection from dilution for the first $15 million invested~~been classified as mezzanine equity in the ~~net2phone 2.0 following~~accompanying consolidated balance sheet because they may be redeemed at the ~~grant.~~option of Alta Fox, although the shares are not mandatorily redeemable. The ~~aggregate estimated fair value on~~carrying amount of the ~~grant date was $0.2 million, which will be recognized over~~shares includes the ~~vesting period.~~

~~Note 12—Earnings (Loss) Per Share~~noncontrolling interest in the net income of NRS.

Note 15—(Loss) Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

The weighted-average number of shares used in the calculation of basic and diluted (loss) earnings ~~(loss)~~ per share attributable to the Company’s common stockholders consists of the following:

Schedule of Weighted-average Number of Shares Used in the Calculation of Basic and Diluted (Loss) Earnings Per Share

	Three Months Ended January 31,				Six Months Ended January 31,				Three Months Ended October 31,
	2021		2020		2021		2020		2021		2020
	(in thousands)								(in thousands)
Basic weighted-average number of shares		25,362		26,320		25,448		26,300		25,566		25,534
Effect of dilutive securities:
Stock options		9		—		4		—		—		—
Non-vested restricted Class B common stock		342		131		335		—		—		327
Diluted weighted-average number of shares		25,713		26,451		25,787		26,300		25,566		25,861

The following shares were excluded from the calculation of diluted (loss) earnings ~~(loss)~~ per share:

Schedule of Outstanding Stock Options Excluded from the Calculation of Diluted (Loss) Earnings Per Share

	Three Months Ended January 31,				Six Months Ended January 31,				Three Months Ended October 31,
	2021		2020		2021		2020		2021		2020
	(in thousands)								(in thousands)
Stock options		1,035		1,190		1,070		1,190		1,035		1,104
Non-vested restricted Class B common stock		—		—		—		520		352		—
Shares excluded from the calculation of diluted earnings per share		1,035		1,190		1,070		1,710		1,387		1,104

In the three and six months ended January 31, 2021 and in the three months ended January 31, 2020, stock options with an exercise price that was greater than the average market price of the Company’s stock during the period were excluded from the diluted earnings per share computation.

The diluted loss per share equals basic loss per share in the ~~six~~three months ended ~~January~~October 31, ~~2020~~2021 because the Company had a net loss and the impact of the assumed exercise of stock options and the vesting of restricted stock would have been anti-dilutive. Stock options with an exercise price that was greater than the average market price of the Company’s common stock in the three months ended October 31, 2020 were excluded from the calculation of diluted earnings per share.

Note ~~13—~~16—Accumulated Other Comprehensive Loss

The accumulated balances for each classification of other comprehensive (loss) income were as follows:

Schedule of Accumulated Balances for Each Classification of Other Comprehensive (Loss) Income

	Unrealized Loss on Available-for-Sale Securities			Foreign Currency Translation			Accumulated Other Comprehensive Loss
				(in thousands)
Balance, July 31, 2021	$	(9	)	$	(10,174	)	$	(10,183	)
Other comprehensive (loss) income attributable to IDT Corporation		(111	)		1,068			957
Balance, October 31, 2021	$	(120	)	$	(9,106	)	$	(9,226	)

Unrealized Gain (Loss) on Available-for-Sale Securities

Foreign Currency Translation

Accumulated Other Comprehensive Loss

(in thousands)
Balance, July 31, 2020 $ 42 $ (7,452 ) $ (7,410 )
Other comprehensive income (loss) attributable to IDT Corporation 17 (1,564 ) (1,547 )
Balance, January 31, 2021 $ 59 $ (9,016 ) $ (8,957 )

Note ~~14—~~17—Commitments and Contingencies

Coronavirus Disease (COVID-19)

The Company continues to monitor and respond to the impacts of the COVID-19 pandemic on all aspects of its business, including its customers, employees, suppliers, vendors, and business partners.

Operationally, the Company’s employees transitioned to work-from-home during the third quarter of fiscal 2020 and, to a large degree, ~~continued~~continue to ~~work-from-home thereafter. Its~~work-from-home. Beginning in the fourth quarter of fiscal 2021, certain of the Company’s employees returned to work in the Company’s offices on a part-time basis. The Company’s salespeople, customer service employees, technicians, and delivery employees ~~continued~~continue to serve its independent retailers, ~~and~~ channel partners, and customers with minimal interruption.

COVID-19 had mixed financial impacts on the Company ~~during~~beginning in the third ~~and fourth quarters~~quarter of fiscal 2020 and continuing through the first ~~and second quarters~~quarter of fiscal ~~2021.~~2022.

Legal Proceedings

On January 22, 2019, Jose Rosales filed a putative class action against IDT America, IDT Domestic Telecom and IDT International in California state court alleging certain violations of employment law. Plaintiff alleges that these companies failed to compensate members of the putative class in accordance with California law. In August 2019, the Company filed a cross complaint against Rosales alleging trade secret and other violations. The parties are now seeking court approval of a settlement agreement.

On April 24, 2018, Sprint Communications Company L.P. filed a patent infringement claim against the Company and certain of its affiliates in the U.S. District Court for the District of Delaware alleging infringement of U.S. Patent Nos. 6,298,064; 6,330,224; 6,343,084; 6,452,932; 6,463,052; 6,473,429; 6,563,918; 6,633,561; 6,697,340; 6,999,463; 7,286,561; 7,324,534; 7,327,728; 7,505,454; and 7,693,131. Plaintiff was seeking damages and injunctive relief. On June 28, 2018, Sprint dismissed the complaint without prejudice. The Company is evaluating the underlying claim, and at this stage, is unable to estimate its potential liability, if any. The Company intends to vigorously defend any claim of infringement of the listed patents.

On July 5, 2017, plaintiff JDS1, LLC, on behalf of itself and all other similarly situated stockholders of Straight Path, and derivatively on behalf of Straight Path as nominal defendant, filed a putative class action and derivative complaint in the Court of Chancery of the State of Delaware against the Company, The Patrick Henry Trust (a trust formed by Howard S. Jonas that held record and beneficial ownership of certain shares of Straight Path he formerly held), Howard S. Jonas, and each of Straight Path’s directors. The complaint alleges that the Company aided and abetted Straight Path Chairman of the Board and Chief Executive Officer Davidi Jonas, and Howard S. Jonas in his capacity as controlling stockholder of Straight Path, in breaching their fiduciary duties to Straight Path in connection with the settlement of claims between Straight Path and the Company related to potential indemnification claims concerning Straight Path’s obligations under the Consent Decree it entered into with the Federal Communications Commission (“FCC”), as well as the sale of Straight Path’s subsidiary Straight Path IP Group, Inc. to the Company in connection with that settlement. That action was consolidated with a similar action that was initiated by The Arbitrage Fund. The Plaintiffs are seeking, among other things, (i) a declaration that the action may be maintained as a class action or in the alternative, that demand on the Straight Path Board is excused; (ii) that the term sheet is invalid; (iii) awarding damages for the unfair price stockholders received in the merger between Straight Path and Verizon Communications Inc. for their shares of Straight Path’s Class B common stock; and (iv) ordering Howard S. Jonas, Davidi Jonas, and the Company to disgorge any profits for the benefit of the class Plaintiffs. On August 28, 2017, the Plaintiffs filed an amended complaint. On September 24, 2017, the Company filed a motion to dismiss the amended complaint, which was ultimately denied, and which denial was affirmed by the Delaware Supreme Court. The parties are engaged in ~~discovery.~~discovery and motion practice. The trial is currently scheduled for ~~December 6, 2021.~~May 2022. The Company intends to vigorously defend this matter (see Note ~~10)~~11). At this stage, the Company is unable to estimate its potential liability, if any.

In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, the Company believes that none of the other legal proceedings to which the Company is a party will have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

Sales Tax Contingency

On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. The Company has evaluated its state tax filings with respect to the Wayfair decision and is in the process of reviewing its remittance practices. It is possible that one or more jurisdictions may assert that the Company has liability for periods for which it has not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect the Company’s business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to the Company’s operations, and if such changes were made it could materially and adversely affect the Company’s business, financial position, and operating results.

Regulatory Fees Audit

The Company’s 2017 FCC Form 499-A, which reports its calendar year 2016 revenue, is currently under audit by the Universal Service Administrative Company (“USAC”). The Internal Audit Division of USAC issued preliminary audit findings and the Company has, in accordance with audit procedures, appealed certain of the findings. The Company awaits a final decision by USAC on the preliminary audit findings. Depending on the findings contained in the final decision, the Company may further appeal to the FCC. Although a final decision remains pending, the Company has been invoiced ~~$2.9~~ $2.9 million and ~~$1.8~~ $1.8 million on behalf of the Federal Telecommunications Relay Services Fund and on behalf of the Universal Service Fund, respectively. The Company does not intend to remit payment for these fees unless and until a negative decision on its appeal has been issued. In response to the aforementioned preliminary audit findings, the Company made certain changes to its filing policies and procedures for years that remain potentially under audit. At ~~January~~October 31, 2021 and July 31, ~~2020,~~2021, the Company’s accrued expenses included ~~$41.1~~ $38.2 million and ~~$40.8~~ $38.3 million, respectively, for FCC-related regulatory fees for the year covered by the audit, as well as prior and subsequent years.

Purchase Commitments

At ~~January~~October 31, 2021, the Company had purchase commitments of ~~$1.3~~ $4.0 million primarily for ~~certain~~ equipment and services.

Performance Bonds

The Company has performance bonds issued through third parties for the benefit of various states in order to comply with the states’ financial requirements for money remittance licenses and telecommunications resellers. At ~~January~~October 31, 2021, the Company had aggregate performance bonds of ~~$19.8~~ $19.6million outstanding.

~~Company Restricted Cash and Cash Equivalents~~

The Company treats unrestricted cash and cash equivalents held by IDT Payment Services, which provides the Company’s international money transfer services in the United States, as substantially restricted and unavailable for other purposes. At January 31, 2021 and July 31, 2020, “Cash and cash equivalents” in the Company’s consolidated balance sheets included an aggregate of $9.8 million and $11.0 million, respectively, held by IDT Payment Services that was unavailable for other purposes.

FCC Investigation of Straight Path Spectrum LLC

On September 20, 2016, the Company received a letter of inquiry from the Enforcement Bureau of the FCC requesting certain information and materials related to an investigation of potential violations by Straight Path Spectrum LLC (formerly a subsidiary of the Company and Straight Path) in connection with licenses to operate on the 28 GHz and 39 GHz bands of the Fixed Microwave Services. The Company has cooperated with the FCC in this matter and has responded to the letter of inquiry. If the FCC were to pursue separate action against the Company, the FCC could seek to fine or impose regulatory penalties or civil liability on the Company related to activities during the period of ownership by the Company.

Note ~~15—~~18—Other ~~Income,~~Expense, Net

Other ~~income,~~expense, net consists of the following:

Schedule of Other Expense Net

Three Months Ended
January 31, Six Months Ended
January 31,
2021 2020 2021 2020
(in thousands)
Foreign currency transaction gains $ 1,893 $ 278 $ 1,466 $ 949
Write-off of tax assets related to prior periods — (139 ) — (613 )
Gain on investments 1,307 383 387 409
Other (30 ) 28 (61 ) 40
Total other income, net $ 3,170 $ 550 $ 1,792 $ 785


	Three Months Ended October 31,
	2021			2020
	(in thousands)
Foreign currency transaction losses	$	(250	)	$	(428	)
Equity in net loss of investee		(623	)		—
Losses on investments (see Note 7)		(14,494	)		(920	)
Other		(849	)		(32	)
Total other expense, net	$	(16,216	)	$	(1,380	)

Note ~~16—~~19—Recently Issued Accounting ~~Standards~~Standard Not Yet Adopted

In June 2016, the Financial Accounting Standards Board ~~(“FASB”)~~ issued Accounting Standards Update ~~(“ASU”)~~ No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking current expected credit loss model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators, and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. The Company will adopt the new standard on August 1, 2023. The Company is evaluating the impact that the new standard will have on its consolidated financial statements.

~~In December 2019, the FASB issued ASU No. 2019-12,~~ ~~Income Taxes (Topic 740)~~, ~~Simplifying the Accounting for Income Taxes,~~ that removes certain exceptions to the general principles in Topic 740, and clarifies and amends existing guidance in Topic 740. The Company will adopt the new standard on August 1, 2021. The Company is evaluating the impact that the new standard will have on its consolidated financial statements.21

~~In January 2020, the FASB issued ASU No. 2020-01,~~ ~~Investments—Equity Securities (Topic 321)~~, ~~Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815),~~ that clarifies the interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU affect the application of the measurement alternative for certain equity securities and the equity method of accounting, and guidance for certain forward contracts and purchased options to purchase securities, that, upon settlement or exercise, would be accounted for under the equity method of accounting. The Company will adopt the new standard on August 1, 2021. The Company is evaluating the impact that the new standard will have on its consolidated financial statements.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2020,~~2021, as filed with the U.S. Securities and Exchange Commission (or SEC).

As used below, unless the context otherwise requires, the terms “the Company,” “IDT,” “we,” “us,” and “our” refer to IDT Corporation, a Delaware corporation, its predecessor, International Discount Telecommunications, Corp., a New York corporation, and their subsidiaries, collectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks, and uncertainties that could result in those differences include, but are not limited to, those discussed under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2020, and under Item 1A to Part II “Risk Factors” in this Quarterly Report on Form 10-Q.~~2021. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2020.~~2021.

Recently Issued Accounting ~~Standards~~Standard Not Yet Adopted

In June 2016, the Financial Accounting Standards Board ~~or FASB,~~ issued Accounting Standards Update ~~or ASU,~~ No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking current expected credit loss model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators, and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. We will adopt the new standard on August 1, 2023. We are evaluating the impact that the new standard will have on our consolidated financial statements.

~~In December 2019, the FASB issued ASU No. 2019-12,~~ ~~Income Taxes (Topic 740)~~, ~~Simplifying the Accounting for Income Taxes,~~ that removes certain exceptions to the general principles in Topic 740, and clarifies and amends existing guidance in Topic 740. We will adopt the new standard on August 1, 2021. We are evaluating the impact that the new standard will have on our consolidated financial statements.

~~In January 2020, the FASB issued ASU No. 2020-01,~~ ~~Investments—Equity Securities (Topic 321)~~, ~~Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815),~~ that clarifies the interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU affect the application of the measurement alternative for certain equity securities and the equity method of accounting, and guidance for certain forward contracts and purchased options to purchase securities, that, upon settlement or exercise, would be accounted for under the equity method of accounting. We will adopt the new standard on August 1, 2021. We are evaluating the impact that the new standard will have on our consolidated financial statements.

Results of Operations

We evaluate the performance of our business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

Coronavirus Disease (COVID-19)

We continue to monitor and respond to the impacts of the COVID-19 pandemic on all aspects of our business, including our customers, employees, suppliers, vendors, and business partners.

Operationally, our employees transitioned to work-from-home during the third quarter of fiscal 2020 and, to a large degree, ~~continued~~continue to ~~work-from-home thereafter.~~work-from-home. Beginning in the fourth quarter of fiscal 2021, certain of our employees returned to work in our offices on a part-time basis. Our salespeople, customer service employees, technicians, and delivery employees ~~continued~~continue to serve our independent retailers, ~~and~~ channel partners, and customers with minimal interruption.

COVID-19 has had mixed financial impacts on our businesses ~~during~~beginning in the third ~~and fourth quarters~~quarter of fiscal 2020 and continuing through the first ~~and second quarters~~quarter of fiscal ~~2021.~~2022. It drove ~~significant~~ increases in demand for our consumer offerings, principally BOSS Revolution Money Transfer, BOSS Revolution Calling and Mobile Top-Up, through our digital channels ~~during~~beginning in the latter half of March ~~and into April~~ 2020. Subsequently, digital transaction levels have continued to increase relative to retailer originated transactions. ~~Conversely,~~Correspondingly, sales of consumer offerings originating through retailers and channel partners slowed modestly in late March and April 2020 before stabilizing in the fourth ~~quarter.~~quarter of fiscal 2020. National Retail Solutions, or NRS, was ~~slightly~~immaterially impacted by the closure of some of its retailers in the third quarter of fiscal 2020, but most re-opened quickly and many attracted increased foot traffic following the onset of COVID-19 as local retailers are typically more accessible to pedestrian traffic than big box retailers. The resilience of local retailers has enabled NRS to continue to expand sales of terminals, payment processing, and advertising services. net2phone-Unified Communications as a Service, or UCaaS’, customer base growth slowed somewhat in the second half of fiscal 2020 in certain Latin American markets. However, Latin American sales rebounded in the first quarter of fiscal 2021 and have remained strong in our United States and Canadian markets. Carrier Services’ revenue, which had been declining as communications globally transition away from traditional international long-distance voice, declined more rapidly following the onset of COVID-19 as business communications shifted from calling to video conferencing and other collaboration platforms.

At the onset of the COVID-19 pandemic, the transition from offices to a more flexible workforce increased the demand for net2phone-UCaaS’ offerings. Customers transitioned from their on-premises phone system to net2phone-UCaaS’ cloud solution, ported their phone numbers, and quickly set-up their employees to work remotely. In April 2020, the release of Huddle, net2phone-UCaaS’ integrated video conferencing solution, significantly improved net2phone-UCaaS’ functionality for remote work, which also increased the demand for its services. COVID-19 had mixed financial impacts on net2phone-UCaaS’ business beginning in the third quarter of fiscal 2020. Its customer base growth slowed somewhat in the second half of fiscal 2020 in certain Latin American markets. However, Latin American sales rebounded in the first quarter of fiscal 2021 and sales have remained strong in its United States and Canadian markets. In the second half of fiscal 2021, COVID-19 cases increased in Latin America, in particular Brazil, and in Spain. This caused businesses to downsize or shutdown, which reduced its customer base and revenues. In the fourth quarter of fiscal 2021, the demand for flexible communications solutions for a hybrid workforce has resulted in an increase in new net2phone-UCaaS customers.

As of the date of this ~~report,~~Quarterly Report, including the impact of COVID-19, we expect that our cash from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on ~~January~~October 31, 2021 will be sufficient to meet our ~~currently~~ anticipated working capital and capital expenditure requirements during the ~~twelve-month~~twelve month period ending ~~January~~October 31, 2022. ~~Looking ahead, current economic conditions, if enduring, may create additional hardship for many of our customers. Over~~However, the longer term, sustained levels of high unemployment along with declining economic activity and less favorable foreign exchange market conditions could materially and adversely impact us by dampening demand for both our retail and wholesale offerings. The situation remains fluid and we cannot predict with certainty the potential impact of COVID-19 on our business, results of operations, financial condition, and cash flows.

~~Three and Six Months Ended January 31, 2021 Compared to Three and Six Months Ended January 31, 2020~~Explanation of Performance Metrics

As of August 1, 2020, we revised our reportable business segments to reflect the growth of our financial technology and cloud communications businesses and their increased contributions to our consolidated results. We now have three reportable business segments, Fintech, net2phone-UCaaS, and Traditional Communications. The revised reportable business segments reflect management’s approach to analyzing results, its resource allocation strategy, and its assessment of business performance. Comparative segment information has been reclassified and restated in all periods to conform to the current period presentation. We evaluate the performance of our business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

Our results of operations discussion include the following performance metrics: active point of sale, or POS, terminals, payment processing accounts, direct cost of revenues as a percentage of revenues, seats, subscription revenue, ~~seats,~~ and minutes of use.

NRS uses two metrics, among others, to measure the size of its customer base: active POS terminals and payment processing accounts. Active POS terminals are the number of POS terminals that have completed at least one transaction in the calendar month. It excludes POS terminals that are being installed. Payment processing accounts are NRS PAY accounts that can generate revenue. It excludes accounts that have been approved but not activated. NRS uses these two metrics in its analysis of revenue trends and comparisons between periods.

Direct cost of revenues as a percentage of revenues is a financial metric that measures changes in our direct cost of revenues relative to changes in revenues during the same period. Direct cost of revenues is the numerator and revenues are the denominator in this ratio. Direct cost of revenues as a percentage of revenues is a useful metric for monitoring and evaluating trends in the net contribution of our revenues. ~~net2phone-UCaaS’s~~

net2phone-UCaaS’ cloud communications offering is priced on a per-seat basis, with each customer employee identity constituting a seat, and its subscription revenue is a monthly base fee per seat. The number of seats served and subscription revenue trends and comparisons between periods are used in the analysis of ~~net2phone-UCaaS’s~~net2phone-UCaaS’ revenues and direct cost of revenues.

Minutes of use is a nonfinancial metric that measures aggregate customer usage during a reporting period. Minutes of use is an important factor in BOSS Revolution Calling’s and Carrier Services’ revenue recognition since satisfaction of our performance obligation occurs when the customer uses our service. Minutes of use trends and comparisons between periods are used in the analysis of revenues and direct cost of revenues.

Three Months Ended October 31, 2021 Compared to Three Months Ended October 31, 2020

Fintech Segment

Fintech, which represented ~~5.4%~~6.1% and ~~3.0%~~5.9% of our total revenues in the three months ended ~~January~~October 31, 2021 and 2020, respectively, ~~and 5.6% and 2.9%~~is comprised of ~~our total revenues in the six months ended January 31, 2021 and 2020, respectively, comprises~~ BOSS Revolution Money Transfer, a provider of international money remittance and related value/payment transfer services, and NRS, an operator of a nationwide ~~point of sale, or~~ POS ~~retail~~ network providing payment processing, digital advertising, transaction data, and ancillary services. ~~BOSS Revolution Money Transfer and NRS were previously included in our Telecom & Payment Services segment.~~

Three months ended
January 31, Change Six months ended
January 31, Change
2021 2020 $ % 2021 2020 $ %
(in millions)
Revenues:
BOSS Revolution Money Transfer $ 13.3 $ 7.6 $ 5.7 73.4 % $ 28.4 $ 14.9 $ 13.5 91.3 %
National Retail Solutions 5.2 2.1 3.1 150.7 10.2 4.4 5.8 128.7
Total revenues 18.5 9.7 8.8 89.9 38.6 19.3 19.3 99.9
Direct cost of revenues 6.5 4.4 2.1 46.6 12.7 8.2 4.5 53.7
Selling, general and administrative 11.8 8.2 3.6 44.2 22.2 16.3 5.9 35.9
Depreciation and amortization 0.4 0.3 0.1 47.6 0.8 0.6 0.2 45.1
(Loss) income from operations $ (0.2 ) $ (3.2 ) $ 3.0 92.2 % $ 2.9 $ (5.8 ) $ 8.7 149.4 %

	Three months ended October 31,				Change
	2021		2020		$			%

Revenues:
BOSS Revolution Money Transfer	$	12.5	$	15.2	$	(2.7	)		(17.6	)%
National Retail Solutions		10.1		4.9		5.2			104.3

Total revenues		22.6		20.1		2.5			12.4
Direct cost of revenues		7.2		6.2		1.0			16.9
Selling, general and administrative		14.8		10.4		4.4			42.9
Depreciation and amortization		0.6		0.4		0.2			43.9

(Loss) income from operations	$	—	$	3.1	$	(3.1	)		(101.4	)%

Revenues. Revenues from BOSS Revolution Money Transfer ~~increased~~decreased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020 driven~~2021 primarily ~~by increased transaction volume in its digital channel. The revenue increases also reflected a~~because the significant ~~but diminished~~ benefit from ~~the~~ transient foreign exchange market conditions that ~~positively impacted~~materially improved BOSS Revolution Money Transfer’s ~~results~~revenues in the ~~fourth quarter of~~three months ended October 31, 2020 ceased by January 31, 2021. The revenue decline was partially offset by revenue from increased transaction volume in BOSS Revolution Money Transfer’s digital channel in the three months ended October 31, 2021 compared to the similar period in fiscal ~~2020 and first quarter of fiscal 2021 but mostly dissipated by the end of the second quarter of fiscal~~ 2021.

Revenues from NRS increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 driven primarily by the expansion of its POS network, and revenue growth from its digital out-of-home advertising and payment processing services. Advertising and data revenue increased 130% to $4.3 million in the three months ended October 31, 2021 from $1.9 million in the three months ended October 31, 2020. Merchant services and other revenue, which includes payment processing services, ~~and digital out-of-home advertising offerings.~~

increased 146% to $3.1 million in the three months ended October 31, 2021 from $1.3 million in the three months ended October 31, 2020. Active POS terminals increased 37% to 15,100 at October 31, 2021 from 11,100 at October 31, 2020. Payment processing accounts increased 118% to 6,800 at October 31, 2021 from 3,100 at October 31, 2020.

Direct Cost of Revenues. ~~Direct~~BOSS Revolution Money Transfer’s direct cost of revenues increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 due to increased direct cost of revenues in both its retailer and digital channels. NRS’ direct cost of revenues increased in the three months ended October 31, 2021 compared to the similar period in fiscal 2021 primarily due to the increase in its revenues. ~~Direct cost of revenues for both BOSS Revolution Money Transfer and NRS increased in the three and six months ended January 31, 2021 compared to the similar periods in fiscal 2020.~~

Three months ended
January 31, Six months ended
January 31,
2021 2020 Change 2021 2020 Change
Direct cost of revenues as a percentage of revenues
35.0
% 45.3 % (10.3 )%
32.9
% 42.7 % (9.8 )%

	Three months ended October 31,
	2021			2020			Change

Direct cost of revenues as a percentage of revenues		32.1	%		30.9	%		1.2	%

Direct cost of revenues as a percentage of revenues ~~decreased 1,030 and 980~~increased 120 basis points in the three ~~and six~~ months ended ~~January~~October 31, 2021 ~~respectively,~~ compared to the similar ~~periods~~period in fiscal ~~2020~~2021 due to ~~decreases~~the increase in ~~direct cost of revenues as a percentage of revenues in BOSS Revolution Money Transfer.~~ BOSS Revolution Money Transfer’s direct cost of revenues as a percentage of revenues, although NRS’ direct cost of revenues as a percentage of revenues decreased ~~largely from increased foreign exchange revenue derived,~~ in ~~part, from strategies leveraging~~ the ~~U.S. dollar.~~three months ended October 31, 2021 compared to the similar period in fiscal 2021.

Selling, General and Administrative. Selling, general and administrative expense increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 primarily due to increases in sales commissions, employee compensation, ~~marketing,~~and debit and credit card processing ~~charges, and sales commissions.~~charges. The increase in card processing charges was the result of increased credit and debit card transactions through our BOSS Revolution ~~apps~~Money app and other digital channels. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense ~~decreased~~increased to ~~64.0%~~65.6% from ~~84.3%~~51.6% in the three months ended ~~January~~October 31, 2021 and 2020, ~~respectively, and decreased to 57.5% from 84.6% in the six months ended January 31, 2021 and 2020,~~ respectively.

Depreciation and Amortization. Depreciation and amortization expense increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal 2020 primarily due to increased depreciation of capitalized costs of consultants and employees developing internal use software and increased depreciation of NRS’ POS equipment.

net2phone-UCaaS Segment

The net2phone-UCaaS segment, which represented ~~3.2%~~3.5% and ~~2.4%~~2.8% of our total revenues in the three months ended ~~January~~October 31, 2021 and 2020, respectively, ~~and 3.0% and 2.3%~~is comprised of ~~our total revenues in the six months ended January 31, 2021 and 2020, respectively, comprises~~ net2phone’s cloud communications ~~offerings, which were previously included in our net2phone segment.~~offerings.

Three months ended
January 31, Change Six months ended
January 31, Change
2021 2020 $ % 2021 2020 $ %
(in millions)
Revenues $ 10.7 $ 7.9 $ 2.8 35.7 % $ 20.4 $ 15.1 $ 5.3 34.7 %
Direct cost of revenues 1.9 1.6 0.3 19.3 3.9 3.1 0.8 27.1
Selling, general and administrative 10.8 9.0 1.8 19.7 21.2 17.4 3.8 21.0
Depreciation and amortization 1.1 1.0 0.1 15.8 2.3 2.0 0.3 13.3
Other operating expense, net 0.1 0.1 — 58.7 0.1 0.1 — 58.7
Loss from operations $ (3.2 ) $ (3.8 ) $ 0.6 14.2 % $ (7.1 ) $ (7.5 ) $ 0.4 5.8 %

	Three months ended October 31,						Change
	2021			2020			$			%

Revenues	$	12.9		$	9.7		$	3.2			33.1	%
Direct cost of revenues		2.5			2.1			0.4			18.9
Selling, general and administrative		13.3			10.4			2.9			27.8
Depreciation and amortization		1.3			1.1			0.2			22.2

Loss from operations	$	(4.2	)	$	(3.9	)	$	(0.3	)		(8.2	)%

Revenues. net2phone-UCaaS’s revenues increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 driven primarily ~~driven~~ by growth in the United States, although revenue increased in all net2phone-UCaaS regions. Seats served increased ~~56%~~38% to ~~190,000~~244,000 at ~~January~~October 31, 2021 from ~~122,000~~176,000 at ~~January 31, 2020 and from 154,000 at July~~October 31, 2020. Subscription revenue increased ~~36.1%~~38% to ~~$10.1~~$12.5 million in the three months ended ~~January~~October 31, 2021 from ~~$7.4~~$9.1 million in the three months ended ~~January 31, 2020 and increased 34.0% to $19.1 million in the six months ended January 31, 2021 from $14.3 million in the six months ended January~~October 31, 2020 led by growth in both the ~~U.S. market. net2phone-UCaaS launched its integration with Slack in~~South American and North American regions. In the three months ended ~~January~~October 31, 2021, ~~building on its prior integrations with Zoho and Microsoft Teams. More recently,~~ net2phone-UCaaS launched ~~an integration with Salesforce. Also, in November 2020, net2phone-UCaaS announced it had launched~~a HIPAA compliant program for certain of its ~~service in Peru,~~communications and ~~expanded coverage~~collaboration solutions and introduced net2phone Phone App for Teams. The app enables Microsoft Teams users to ~~six~~add voice capabilities into Teams environments without additional ~~cities in Brazil in December 2020.~~licenses.

Direct Cost of Revenues. Direct cost of revenues increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 primarily due to the increase in revenues, with the largest ~~increases~~increase in ~~the United States and South~~Latin America.

Three months ended
January 31, Six months ended
January 31,

2021

2020

Change

2021

2020

Change

Direct cost of revenues as a percentage of revenues 17.7 % 20.1 % (2.4 )% 19.2 % 20.4 % (1.2 )%

	Three months ended October 31,
	2021			2020			Change

Direct cost of revenues as a percentage of revenues		19.1	%		21.4	%		(2.3	)%

Direct cost of revenues as a percentage of revenues decreased ~~240 and 120~~230 basis points in the three ~~and six~~ months ended ~~January~~October 31, 2021 ~~respectively,~~ compared to the similar ~~periods~~period in fiscal ~~2020~~2021 primarily because of ~~decreases~~a decrease in direct cost of revenues as a percentage of revenues in the United States. net2phone-UCaaS’ focus on mid-sized businesses, multi-channel strategies, and localized offerings generated revenue growth that exceeded the increase in direct cost of revenues.

Selling, General and Administrative. Selling, general and administrative expense increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 primarily due to increases in employee compensation and sales commissions. As a percentage of net2phone-UCaaS’ revenues, net2phone-UCaaS’ selling, general and administrative expenses decreased to ~~100.6%~~103.1% from ~~114.0%~~107.4% in the three months ended ~~January~~October 31, 2021 and 2020, ~~respectively, and decreased to 103.9% from 115.6% in the six months ended January 31, 2021 and 2020,~~ respectively.

Depreciation and Amortization. ~~Depreciation~~The increase in depreciation and amortization expense ~~increased~~ in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 was due to increased depreciation of net2phone-UCaaS’ ~~customer premises~~telephone equipment leased to customers and increased depreciation of capitalized costs of consultants and employees developing internal use software.

~~Other Operating Expense, net~~. Other operating expense, net of $0.1 million in the three and six months ended January 31, 2021 was due to the settlement of a legal matter. Other operating expense, net of $0.1 million in the three and six months ended January 31, 2020 was due to the write-off of certain capitalized assets related to a cancelled project.

Traditional Communications Segment

The Traditional Communications segment, which represented ~~91.4%~~90.4% and ~~94.6%~~91.3% of our total revenues in the three months ended ~~January 31, 2021 and 2020, respectively, and 91.4% and 94.8% of our total revenues in the six months ended January~~October 31, 2021 and 2020, respectively, includes Mobile Top-Up, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts, BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada, and Carrier Services, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes ~~net2phone-Platform Services, which provides telephony services to cable operators and~~ other ~~offerings that leverage a common technology platform, as well as~~ smaller ~~communications and payments offerings,~~businesses, many in harvest mode. Most of the Traditional Communications segment was previously included in our Telecom & Payment Services segment except for net2phone-Platform Services, which was previously included in our net2phone segment.

Traditional Communications’ most significant revenue streams are from Mobile Top-Up, BOSS Revolution Calling, and Carrier Services. Mobile Top-Up and BOSS Revolution Calling are sold direct-to-consumers and through distributors and retailers. We receive payments for BOSS Revolution Calling, traditional calling cards, and Mobile Top-Up prior to providing the services. We recognize the revenue when services are provided to the customer. Traditional Communications’ revenues tend to be somewhat seasonal, with the second fiscal quarter (which contains Christmas and New Year’s Day) and the fourth fiscal quarter (which contains Mother’s Day and Father’s Day) typically showing higher minute volumes.

Three months ended
January 31, Change Six months ended
January 31, Change
2021 2020 $/# % 2021 2020 $/# %
(in millions)
Revenues:
Mobile Top-Up $ 96.6 $ 75.8 $ 20.8 27.3 % $ 192.4 $ 152.7 $ 39.7 26.0 %
BOSS Revolution Calling 113.9 113.9 — — 231.2 231.2 — —
Carrier Services 87.1 101.6 (14.5 ) (14.3 ) 174.9 215.2 (40.3 ) (18.7 )
Other 12.9 14.9 (2.0 ) (13.2 ) 25.7 30.6 (4.9 ) (16.2 )
Total revenues 310.5 306.2 4.3 1.4 624.2 629.7 (5.5 ) (0.9 )
Direct cost of revenues (260.8 ) (256.7 ) (4.1 ) (1.6 ) (525.7 ) (530.9 ) 5.2 1.0
Selling, general and
administrative (29.7 ) (34.2 ) 4.5 13.3 (59.0 ) (68.8 ) 9.8 14.3
Depreciation and
amortization (2.8 ) (3.8 ) 1.0 26.3 (5.8 ) (7.9 ) 2.1 25.9
Severance (0.1 ) (0.5 ) 0.4 70.6 (0.3 ) (1.1 ) 0.8 77.0
Other operating gain
(expense), net 1.6 (0.2 ) 1.8 nm 1.1 (2.7 ) 3.8 139.5

Income from operations $ 18.7 $ 10.8 $ 7.9 73.3 % $ 34.5 $ 18.3 $ 16.2 88.6 %
Minutes of use:
BOSS Revolution Calling 898 958 (60 ) (6.3 ) 1,825 1,960 (135 ) (6.9 )
Carrier Services 2,808 3,928 (1,120 ) (28.5 ) 5,725 8,242 (2,517 ) (30.5 )

	Three months ended October 31,				Change
	2021		2020		$/#			%

Revenues:
Mobile Top-Up	$	128.5	$	95.8	$	32.7			34.1	%
BOSS Revolution Calling		106.0		117.3		(11.3	)		(9.7	)
Carrier Services		89.2		87.8		1.4			1.6
Other		10.9		12.7		(1.8	)		(13.3	)

Total revenues		334.6		313.6		21.0			6.7
Direct cost of revenues		281.9		264.9		17.0			6.4
Selling, general and administrative		30.0		29.2		0.8			2.6
Depreciation and amortization		2.6		3.0		(0.4	)		(15.3	)
Severance		—		0.1		(0.1	)		(66.4	)
Other operating expense		—		0.5		(0.5	)		(95.3	)

Income from operations	$	20.1	$	15.9	$	4.2			26.9	%

Minutes of use:
BOSS Revolution Calling		804		927		(123	)		(13.3	)%
Carrier Services		2,060		2,917		(857	)		(29.4	)

~~nm—not meaningful~~

Revenues. Revenues from Mobile Top-Up increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal 2021 primarily from continued product expansion and growth in the business-to-business wholesale channel. In addition, our acquisition of a mobile top-up company in December 2020 ~~due~~contributed to our increased penetration into the ~~addition~~market in Africa.

Revenues and minutes of ~~new mobile partners and increasing demand for data-centric top-up bundles.~~

~~Revenues~~use from BOSS Revolution Calling ~~were substantially unchanged~~decreased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020 because COVID-19 related~~2021. In fiscal 2021, COVID-19-related demand ~~in the three and six months ended January 31, 2021~~ slowed the rate of decline in BOSS Revolution Calling revenue that we ~~have~~ experienced but it was less significant in ~~recent periods.~~the three months ended October 31, 2021. BOSS Revolution Calling continues to be impacted by persistent, market-wide trends, including the proliferation of unlimited calling plans offered by wireless carriers and mobile virtual network operators, and the increasing penetration of free and paid over-the-top voice, video conferencing, and messaging services.

Revenues ~~and minutes~~from Carrier Services increased in the three months ended October 31, 2021 compared to the similar period in fiscal 2021 due to an increase in the average rate per minute. Minutes of use from Carrier Services decreased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 as communications globally continued to transition away from international voice calling. This trend was accelerated by the impact of COVID-19 as business communications shifted from calling to video conferencing and other collaboration platforms. We expect that Carrier Services will continue to be adversely impacted by these trends, and minutes of use and revenues will likely continue to decline from quarter-to-quarter, as we seek to maximize economics rather than necessarily sustain minutes of use or revenues.

Direct Cost of Revenues. Direct cost of revenues increased in the three months ended ~~January~~October 31, 2021 compared to the similar period in fiscal ~~2020~~2021 primarily due to ~~an increase~~increases in Mobile Top-Up’s and Carrier Services’ direct cost of revenues in the three months ended ~~January~~October 31, 2021 compared to the similar period in fiscal ~~2020,~~2021 as a result of the increases in revenues from those lines of business, partially offset by ~~decreases~~a decrease in ~~Carrier Services’~~ and BOSS Revolution Calling’s direct cost of revenues in the three months ended ~~January~~October 31, 2021 compared to the similar period in fiscal 2020. Direct cost of revenues decreased in the six months ended January 31, 2021 compared to the similar period in fiscal 2020 primarily due to decreases in Carrier Services’ and BOSS Revolution Calling’s direct cost of revenues in the six months ended January 31, 2021 compared to the similar period in fiscal 2020, partially offset by an increase in Mobile Top-Up’s direct cost of revenues in the six months ended January 31, 2021 compared to the similar period in fiscal 2020.2021.

	Three months ended October 31,
	2021			2020			Change

Direct cost of revenues as a percentage of revenues		84.3	%		84.5	%		(0.2	)%

Three months ended
January 31, Six months ended
January 31,
2021 2020 Change 2021 2020 Change

Direct cost of revenues as a percentage of revenues 84.0 % 83.8 % 0.2 % 84.2 % 84.3 % (0.1 )%

Direct cost of revenues as a percentage of revenues increased 20 basis points in the three months ended January 31, 2021 compared to the similar period in fiscal 2020 and direct cost of revenues as a percentage of revenues decreased 10 basis points in the six months ended January 31, 2021 compared to the similar period in fiscal 2020. Direct cost of revenues as a percentage of revenues decreased 20 basis points in the three months ended October 31, 2021 compared to the similar period in fiscal 2021 because of decreases in direct cost of revenues as a percentage of revenues in Mobile Top-Up, BOSS Revolution Calling, and Carrier Services in the three months ended October 31, 2021 compared to the similar period in fiscal 2021. The decreases in direct cost of revenues as a percentage of revenues at Mobile Top-Up and BOSS Revolution Calling ~~in the three and six months ended January 31, 2021 compared to the similar periods in fiscal 2020~~were primarily due to the continued migration of customers to our digital platforms. The increased adoption of our digital, direct-to-consumer channels is expected to ~~endure and~~continue, which is expected to contribute to future reductions in direct cost of revenues as a percentage of revenues.

Selling, General and Administrative. Selling, general and administrative expense ~~decreased~~increased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 primarily due to increases in consulting expense and marketing expense, partially offset by decreases in employee compensation and stock-based compensation, marketing expense, travel and related expense, and consulting fees, partially offset by increases in debit and credit card processing charges. The increases in card processing charges were the result of the shift in the sales of our consumer offerings from cash transactions at retailers to credit and debit card transactions through our BOSS Revolution apps and other digital channels.compensation. As a percentage of Traditional Communications’ revenue, Traditional Communications’ selling, general and administrative expense decreased to ~~9.6%~~9.0% from ~~11.2%~~9.3% in the three months ended ~~January~~October 31, 2021 and 2020, ~~respectively, and decreased to 9.4% from 10.9% in the six months ended January 31, 2021 and 2020,~~ respectively.

Depreciation and Amortization. Depreciation and amortization expense decreased in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 as more of our property, plant, and equipment became fully depreciated, partially offset by depreciation of equipment added to our telecommunications network and capitalized costs of consultants and employees developing internal use software.

Severance Expense. In the three months ended ~~January~~October 31, 2021 and 2020, we incurred severance expense of $38,000 and $0.1 million, ~~and $0.5 million, respectively, and in the six months ended January 31, 2021 and 2020, we incurred severance expense of $0.3 million and $1.1 million,~~ respectively.

Other Operating ~~Gain (Expense), net~~.Expense. Other operating ~~gain, net~~expense of $25,000 in the three ~~and six~~ months ended ~~January~~October 31, 2021 included $2.0 million received from the sale to a third party of all our rights under the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. The lawsuit is about claims that merchants paid excessive fees to accept Visa and Mastercard cards between January 1, 2004 and January 25, 2019 because Visa and Mastercard, individually, and together with their respective member banks, violated the antitrust laws. Other operating gain (expense), net also included expensewas for the indemnification of a net2phone cable telephony customer related to patent infringement claims brought against the ~~customer of $0.4 million and $0.2 million~~customer. Other operating expense in the three months ended ~~January~~October 31, ~~2021 and~~ 2020 respectively, and $0.4 million and $0.5 million in the six months ended January 31, 2021 and 2020, respectively. Other operating gain, net in the six months ended January 31, 2021 also included expensewas for a ~~Carrier Services~~ settlement of a claim for $0.6 million. In addition, other operating expense, net in the six months ended January 31, 2020 included an accrual for non-income related taxes related to one of our foreign subsidiaries of $2.2 million.Carrier Services’ claim.

Corporate

Three months ended
January 31, Change Six months ended
January 31, Change
2021 2020 $ % 2021 2020 $ %
(in millions)
General and administrative $ 2.0 $ 2.3 $ (0.3 ) (15.4 )% $ 4.1 $ 4.6 $ (0.5 ) (9.7 )%
Other operating expense, net 0.3 0.2 0.1 90.4 — 0.4 (0.4 ) (99.1 )
Loss from operations $ 2.3 $ 2.5 $ (0.2 ) (8.2 )% $ 4.1 $ 5.0 $ (0.9 ) (16.7 )%

	Three months ended October 31,						Change
		2021			2020			$		%
					(in millions)
General and administrative	$	(2.0	)	$	(2.2	)	$	0.2		5.6	%
Other operating (expense) gain, net		(0.1	)		0.3			(0.4	)	(120.7	)
Loss from operations	$	(2.1	)	$	(1.9	)	$	(0.2	)	(13.2	)%

Corporate costs include compensation, consulting fees, treasury, tax and accounting services, human resources, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, charitable contributions, travel, and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.

General and Administrative. Corporate general and administrative expense decreased in the three ~~and six~~ months ended January 31, 2021 compared to the similar periods in fiscal 2020 primarily because of a decrease in stock-based compensation. In addition, employee compensation decreased in the three months ended JanuaryOctober 31, 2021 compared to the similar period in fiscal ~~2020 and increased~~2021 primarily because of a decrease in ~~the six months ended January 31, 2021 compared~~stock-based compensation due to ~~the similar period~~reductions in ~~fiscal 2020.~~expense of deferred stock units granted in June 2019, as well as a decrease in employee compensation. As a percentage of our ~~total~~ consolidated revenues, Corporate general and administrative expense was ~~0.6%~~0.5% and ~~0.7%~~0.6% in the three months ended ~~January~~October 31, 2021 and 2020, ~~respectively, and 0.6% and 0.7% in the six months ended January 31, 2021 and 2020,~~ respectively.

Other Operating ~~Expense,~~(Expense) Gain, net. ~~On July 31, 2013, we completed a pro rata distribution of the common stock of our former subsidiary Straight Path Communications Inc., or Straight Path, to our stockholders.~~ As discussed in Note 1417 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, ~~on Form 10-Q, there is~~we (as well as other defendants) have been named in a pending putative class action on behalf of the stockholders of our former subsidiary, Straight ~~Path’s stockholders~~Path Communications Inc., or Straight Path, and a derivative ~~complaint naming us, among others.~~complaint. We incurred legal fees of ~~$1.4~~$1.0 million and ~~$0.6~~$0.3 million in the three months ended ~~January 31, 2021 and 2020, respectively, and $1.7 million and $1.2 million in the six months ended January~~October 31, 2021 and 2020, respectively, related to this action. Also, we recorded offsetting gains from insurance claims for this matter of ~~$1.1~~$0.9 million and ~~$0.4~~$0.6 million in the three months ended ~~January 31, 2021 and 2020, respectively, and $1.7 million and $0.8 million in the six months ended January~~October 31, 2021 and 2020, respectively.

Consolidated

The following is a discussion of certain of our consolidated expenses, and our consolidated income and expense line items below income ~~(loss)~~ from operations.

Related Party Lease Costs. ~~On March 26, 2018, we completed~~We lease office and parking space in a ~~pro rata distribution of the common stock of~~building and parking garage located at 520 Broad Street, Newark, New Jersey that is owned by our former subsidiary, Rafael Holdings, Inc., or Rafael, to our stockholders of record as of the close of business on March 13, 2018, which we refer to as the Rafael Spin-Off. We lease office space and parking in Rafael’s building and parking garage located at 520 Broad St, Newark, New Jersey.Rafael. We also lease office space in Israel from Rafael. The Newark lease expires in April 2025 and the Israel lease expires in July 2025. We incurred lease costs of $0.5 million in each of the three months ended ~~January 31, 2021 and 2020, and $0.9 million in each of the six months ended January~~October 31, 2021 and 2020 in connection with the Rafael leases, which is included in consolidated selling, general and administrative expenses.

Stock-Based Compensation Expense. Stock-based compensation expense included in consolidated selling, general and administrative expenses was ~~$0.4~~$0.3 million and ~~$1.2~~$0.5 million in the three months ended ~~January 31, 2021 and 2020, respectively, and $0.9 million and $2.5 million in the six months ended January~~October 31, 2021 and 2020, respectively. The ~~decreases~~decrease in stock-based compensation expense in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020 were~~2021 was primarily due to reductions in expense of deferred stock units granted in June ~~2019 and stock options.~~2019. At ~~January~~October 31, 2021, unrecognized compensation cost related to non-vested stock-based compensation was an aggregate of ~~$1.2~~$0.4 million. The unrecognized compensation cost is expected to be recognized over the remaining vesting period that ends in fiscal 2024.

Three months ended
January 31, Change Six months ended
January 31, Change
2021 2020 $ % 2021 2020 $ %
(in millions)
Income (loss) from operations $ 12.9 $ 1.3 $ 11.6 876.8 % $ 26.2 $ (0.1 ) $ 26.3 nm
Interest income, net 0.1 0.2 (0.1 ) (28.7 ) 0.1 0.5 (0.4 ) (79.0 )%
Other income, net 3.2 0.6 2.6 476.4 1.8 0.8 1.0 128.3
Provision for income taxes (3.0 ) (1.2 ) (1.8 ) (160.1 ) (6.5 ) (1.7 ) (4.8 ) (279.1 )
Net income (loss) 13.2 0.9 12.3 nm 21.6 (0.5 ) 22.1 nm
Net income attributable to noncontrolling interests (0.1 ) — (0.1 ) (446.4 ) (0.2 ) (0.1 ) (0.1 ) (255.6 )
Net income (loss) attributable to IDT Corporation $ 13.1 $ 0.9 $ 12.2 nm $ 21.4 $ (0.6 ) $ 22.0 nm

~~nm—not meaningful~~

	Three months ended October 31,						Change
	2021			2020			$			%

Income from operations	$	13.8		$	13.3		$	0.5			3.9	%
Interest income (expense), net		—			(0.1	)		0.1			131.7
Other expense, net		(16.2	)		(1.4	)		(14.8	)		nm
Benefit from (provision for) income taxes		0.1			(3.4	)		3.5			102.5
Net (loss) income		(2.3	)		8.4			(10.7	)		(127.9	)
Net income attributable to noncontrolling interests		(0.2	)		(0.1	)		(0.1	)		(4.7	)

Net (loss) income attributable to IDT Corporation	$	(2.5	)	$	8.3		$	(10.8	)		(129.9	)%

nm—not meaningful

Other ~~Income, net~~Expense, net.. Other ~~income,~~expense, net consists of the following:

Three months ended
January 31,

Six months ended
January 31,

2021

2020

2021

2020

(in millions)
Foreign currency transaction gains $ 1.9 $ 0.3 $ 1.5 $ 0.9
Write-off of tax assets related to prior periods — (0.1 ) — (0.6 )
Gain on investments 1.3 0.4 0.4 0.4
Other — — (0.1 ) 0.1
Total other income, net $ 3.2 $ 0.6 $ 1.8 $ 0.8

	Three months ended October 31,
	2021			2020
	(in millions)
Foreign currency transaction losses	$	(0.3	)	$	(0.4	)
Equity in the net loss of investee		(0.6	)		—
Losses on investments		(14.5	)		(0.9	)
Other		(0.8	)		(0.1	)
Total other expense, net	$	(16.2	)	$	(1.4	)

On February 2, 2021, we paid $4.0 million to purchase shares of series B convertible preferred stock of a communications company (the equity method investee, or EMI), and on August 10, 2021, we paid $1.1 million to purchase shares of the EMI’s series C convertible preferred stock and additional shares of the EMI’s series B convertible preferred stock. The initial shares purchased represented 23.95% of the outstanding shares of the EMI on an as converted basis. The subsequent purchases increased our ownership to 26.57% on an as converted basis. We account for this investment using the equity method since the series B and series C convertible preferred stock are in-substance common stock, and we can exercise significant influence over the operating and financial policies of the EMI. We determined that on the dates of the acquisitions, there were differences of $3.4 million and $1.0 million between our investment in the EMI and our proportional interest in the equity of the EMI, which represented our share of the EMI’s customer list on the dates of the acquisitions. These basis differences are being amortized over the 6-year estimated life of the customer list.

The losses on investments in the three months ended October 31, 2021 was primarily from unrealized losses of $12.5 million on shares of Rafael Class B common stock.

Benefit from (Provision ~~for~~for) Income Taxes. The ~~increase~~change in income tax expense in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 was primarily due to differences in the amount of taxable (loss) income ~~earned~~ in the various taxing jurisdictions.

Net Income Attributable to Noncontrolling ~~Interests.~~Interests. The change in the net income attributable to noncontrolling interests in the three ~~and six~~ months ended ~~January~~October 31, 2021 compared to the similar ~~periods~~period in fiscal ~~2020~~2021 was ~~primarily~~mostly due to new noncontrolling interests subsequent to October 31, 2020. On September 29, 2021, NRS sold shares of its Class B common stock to a ~~reduction in the net loss~~third party that represents 2.5% of ~~NRS. In addition, in the three and six months ended January~~its outstanding capital stock on a fully diluted basis. As of May 31, 2021, we ~~had new noncontrolling interests from~~began consolidating a ~~business acquisition, and in net2phone 2.0, Inc.,~~variable interest entity, or ~~net2phone 2.0. On December 3, 2020,~~VIE, because we ~~acquired 51%~~determined that we are the primary beneficiary of the ~~issued shares~~VIE since we have the power to direct the activities of ~~a company~~the VIE that ~~provides a digital distribution platform facilitating supply~~most significantly impact its economic performance, and ~~distribution~~we have the obligation to absorb losses of ~~mobile airtime~~ and ~~data top-ups~~the right to receive benefits from the VIE that could potentially be significant to it. We do not currently own any interest in the VIE and ~~other services across borders via a single point application programming interface.~~thus the net income incurred by the VIE was attributed to noncontrolling interests. On December 31, 2020, ~~the previously approved compensatory arrangement with each of~~ Howard S. Jonas, the Chairman of our Board of Directors, and Shmuel Jonas, our Chief Executive Officer, ~~was finalized. Howard S. Jonas and Shmuel Jonas~~ each received fifty restricted shares of net2phone 2.0, Inc., or net2phone 2.0, Class B common stock, which represents 5% of the outstanding common stock of net2phone 2.0. net2phone 2.0 ~~is a new entity that~~ owns and operates our net2phone-UCaaS segment. Finally, beginning on December 3, 2020, we acquired an aggregate of 75% of the issued shares of a company that provides a digital platform facilitating supply and distribution of mobile airtime and data top-ups and other services across borders.

Liquidity and Capital Resources

General

As of the date of this ~~report,~~Quarterly Report, including the impact of COVID-19, we ~~currently~~ expect our cash from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on ~~January~~October 31, 2021 will be sufficient to meet our currently anticipated working capital and capital expenditure requirements during the twelve-month period ending ~~January~~October 31, 2022.

At ~~January~~October 31, 2021, we had cash, cash equivalents, debt securities, and current equity investments of ~~$125.3~~$159.3 million and working capital (current assets in excess of current liabilities) of ~~$15.1~~$59.6 million.

We treat unrestricted cash and cash equivalents held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC as substantially restricted and unavailable for other purposes. At ~~January~~October 31, 2021, “Cash and cash equivalents” in our consolidated balance sheet included an aggregate of ~~$9.8~~$16.7 million held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC that was unavailable for other purposes.

Six months ended
January 31,

2021

2020

(in millions)
Cash flows provided by (used in):
Operating activities $ 25.6 $ (23.3 )
Investing activities (39.1 ) (14.4 )
Financing activities (4.0 ) (0.5 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents 5.6 14.1
Decrease in cash, cash equivalents, and restricted cash and cash equivalents $ (11.9 ) $ (24.1 )

	Three months ended October 31,
	2021			2020
	(in millions)
Cash flows (used in) provided by:
Operating activities	$	(5.9	)	$	18.8
Investing activities		(7.8	)		(27.3	)
Financing activities		10.9			(2.7	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents		(2.3	)		(1.9	)
Decrease in cash, cash equivalents, and restricted cash and cash equivalents	$	(5.1	)	$	(13.1	)

Operating Activities

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable.

Gross trade accounts receivable increased to ~~$58.5~~$56.1 million at ~~January~~October 31, 2021 from ~~$50.3~~$51.1 million at July 31, ~~2020~~2021 primarily due to amounts billed in the ~~six~~three months ended ~~January~~October 31, 2021 ~~in excess of~~that were greater than collections during the period.

Deferred revenue arises from sales of prepaid products and varies from period to period depending on the mix and the timing of revenues. Deferred revenue decreased to ~~$39.2~~$41.3 million at ~~January~~October 31, 2021 from ~~$40.1~~$42.3 million at July 31, ~~2020~~2021 primarily due to decreases in the BOSS Revolution Calling and ~~net2phone-Platform Services~~Mobile Top-Up deferred revenue balances.

Customer deposit liabilities at IDT Financial Services Limited, our Gibraltar-based bank, decreased to ~~$109.7~~$100.3 million at ~~January~~October 31, 2021 from ~~$116.0~~$115.5 million at July 31, 2020 mainly because of the decline of the bank’s travel related programs due to the effect of COVID-19, partially offset by an increase of $4.8 million due to the change in the foreign exchange rate.2021. Our restricted cash and cash equivalents included ~~$109.8~~$101.8 million and ~~$116.3~~$115.8 million at ~~January~~October 31, 2021 and July 31, ~~2020,~~2021, respectively, held by the bank.

On December 21, 2020, we received $2.0 million from the sale to a third party of all our rights under the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. The lawsuit is about claims that merchants paid excessive fees to accept Visa and Mastercard cards between January 1, 2004 and January 25, 2019 because Visa and Mastercard, individually, and together with their respective member banks, violated the antitrust laws.

On June 21, 2018, ~~in South Dakota v Wayfair Inc.,~~ the United States Supreme Court ~~held~~rendered a decision in South Dakota v. Wayfair, Inc., holding that ~~states~~a state may ~~charge sales tax on purchases made from out-of-state sellers, even if the~~require a remote seller ~~does not have a~~with no physical presence in the ~~taxing state.~~state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. We have evaluated our state tax filings with respect to the Wayfair decision and are in the process of reviewing our remittance practices. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect our business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to our operations, and if such changes were made it could materially and adversely affect our business, financial position, and operating results.

Investing Activities

Our capital expenditures were ~~$8.8~~$4.4 million and ~~$7.7~~$4.6 million in the ~~six~~three months ended ~~January~~October 31, 2021 and 2020, respectively. We currently anticipate that total capital expenditures ~~for~~in the twelve-month period ending ~~January~~October 31, 2022 will be $18 million to $20 million. We expect to fund our capital expenditures with our net cash provided by operating activities and cash, cash equivalents, debt securities, and current equity investments on hand.

On ~~December 3, 2020, our subsidiary IDT International Telecom, Inc. acquired 51% of the issued shares of a company for $2.4~~August 10, 2021, we paid $1.1 million net of cash acquired. We also recorded $0.4 million for the estimated fair value of contingent consideration. The contingent consideration is $0.5 million that will be paid (a) no later than November 30, 2021 if the acquired company generates EBITDA of no less than $1.0 million between October 1, 2020 and September 30, 2021; or (b) no later than November 30, 2022 if the acquired company generates EBITDA of no less than $1.0 million between October 1, 2021 and September 30, 2022. Also, one of our subsidiaries and the seller entered into a Put/Call Option Agreement related to ~~the 5% of the issued~~purchase shares of the ~~acquired company that were not sold to us. On February 2, 2021, the seller exercised its option to cause us to purchase these~~EMI’s series C convertible preferred stock and additional shares ~~for $0.3 million. To date, the purchase~~ of the ~~shares is still in process.~~

~~On December 11, 2019,~~EMI’s series B convertible preferred stock. The purchases increased our ~~subsidiary, net2phone, Inc. acquired 100%~~ownership of the EMI’s outstanding shares ~~of Ringsouth Europa, S.L., a regional provider of cloud communications services~~ to businesses in Spain. The cash paid for the acquisition was $0.5 million. We also recorded $0.4 million for the estimated fair value of contingent consideration. The contingent consideration includes two potential payments to the seller of $0.4 million each, based26.57% from 23.95% on ~~monthly recurring revenue targets to be achieved over a 36-month period and 48-month period. The second potential payment is not contingent upon meeting the target for the first payment.~~ an as converted basis.

On December 7, 2020, we purchased from Rafael 218,245 newly issued shares of Rafael’s Class B common stock and a warrant to purchase up to 43,649 shares of Rafael’s Class B common stock at an exercise price of $22.91 at any time on or after December 7, 2020 and on or prior to June 6, 2022. The aggregate purchase price was $5.0 million. The purchase price was based on a per share price of $22.91, which was the closing price of Rafael’s Class B common stock on the New York Stock Exchange on the trading day immediately preceding December 7, 2020.

Purchases of debt securities and equity investments were ~~$34.4~~$6.3 million and ~~$9.0~~$29.3 million in the ~~six~~three months ended ~~January~~October 31, 2021 and 2020, respectively. Proceeds from maturities and sales of debt securities and redemptions of equity investments were ~~$11.6~~$3.9 million and ~~$2.7~~$6.6 million in the ~~six~~three months ended ~~January~~October 31, 2021 and 2020, respectively.

Financing Activities

We distributed cash of ~~$0.4~~$0.2 million and ~~$0.5 million~~$28,000 in the ~~six~~three months ended ~~January~~October 31, 2021 and 2020, respectively, to the noncontrolling interests in certain of our subsidiaries.

In the ~~six~~three months ended ~~January~~October 31, 2021 and 2020, we received proceeds from financing-related other liabilities of $2.3 million and nil, respectively.

In the three months ended October 31, 2021 and 2020, we repaid financing-related other liabilities of ~~$56,000~~$1.2 million and ~~$79,000,~~$40,000, respectively.

Our subsidiary, IDT Telecom, Inc., had a credit agreement, dated as of January 31, 2020, with TD Bank, N.A. for a line of credit facility for up to a maximum principal amount of $25.0 million. The credit agreement terminated on July 15, 2020. In the six months ended January 31, 2020, IDT Telecom borrowed and repaid an aggregate of $0.3 million under the facility. We will seek to enter into a similar credit agreement in fiscal 2021.

~~In the six months ended January 31,~~On September 29, 2021, ~~we received proceeds from the exercise of stock options of $0.7 million for which we issued 81,041~~NRS sold 862,442 shares of ~~our~~its Class B common ~~stock.~~ stock, which represents 2.5% of its outstanding capital stock on a fully diluted basis, to Alta Fox Opportunities Fund LP, or Alta Fox, for cash of $10 million. Alta Fox has the right to request that NRS redeem all or any portion of the NRS common shares that it purchased at the per share purchase price during a period of 182 days following the fifth anniversary of this transaction. The redemption right shall terminate upon the consummation of (i) a sale of NRS or its assets for cash or securities that are listed on a national securities exchange, (ii) a public offering of NRS’ securities, or (iii) a distribution of NRS’ capital stock following which NRS’ common shares are listed on a national securities exchange.

In the ~~six~~three months ended ~~January~~October 31, 2020, we received proceeds from the exercise of stock options of ~~$0.3~~$0.2 million for which we issued ~~32,551~~21,894 shares of our Class B common stock. There were no stock option exercises in the three months ended October 31, 2021.

We have an existing stock repurchase program authorized by our Board of Directors for the repurchase of shares of our Class B common stock. The Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. There were no repurchases under the program in the three months ended October 31, 2021. In the ~~six~~three months ended ~~January~~October 31, ~~2021,~~2020, we repurchased 463,792 shares of ~~our~~ Class B common stock for an aggregate purchase price of $2.8 million. ~~There were no repurchases under the program in the six months ended January 31, 2020.~~ At ~~January~~October 31, 2021, 5.8 million shares remained available for repurchase under the stock repurchase program.

In the ~~six~~three months ended ~~January~~October 31, 2021 and 2020, we paid ~~$1.3 million~~$26,000 and ~~$0.3 million,~~$7,000, respectively, to repurchase ~~109,381~~627 and ~~37,348~~1,053 shares, respectively, of our Class B common stock that were tendered by employees of ours to satisfy the employees’ tax withholding obligations in connection with the ~~lapsing of restrictions on awards~~vesting of deferred stock units and lapsing of restrictions on restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.

Our subsidiary, IDT Telecom, Inc., or IDT Telecom, entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At October 31, 2021 and July 31, 2021, IDT Telecom had not borrowed any amounts under this facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the Intercontinental Exchange Benchmark Administration Ltd. LIBOR multiplied by the Regulation D maximum reserve requirement plus 125 to 175 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due in May 2024. IDT Telecom pays a quarterly unused commitment fee on the average daily balance of the unused portion of the $25.0 million commitment of 30 to 85 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of October 31, 2021, IDT Telecom was in compliance with all of the covenants.

Other Sources and Uses of Resources

We are considering spin-offs, sales of equity, and other potential dispositions of certain of our subsidiaries. Some of the transactions under consideration are in early stages and others are more advanced. A spin-off may include the contribution of a significant amount of cash, cash equivalents, debt securities, and/or equity securities to the subsidiary prior to the spin-off, which would reduce our capital resources. The sale of a subsidiary’s equity in a private or public offering or other transaction would instead be a source of cash to us or that subsidiary. In fiscal 2021, we announced that our Board of Directors had directed us to prepare for the potential spin-off of our net2phone cloud communications business. Management subsequently has stated that the preparations for the potential spin-off are progressing, with timing dependent on market conditions and other factors should our Board of Directors authorize it. There is no assurance at this time that any of these transactions will be completed.

Following the end of the second quarter of fiscal 2021, on February 2, 2021, we paid $4.0 million to purchase shares of MarketSpark, Inc. Series B Convertible Preferred Stock representing 23.95% of the outstanding shares of MarketSpark on an as converted basis. MarketSpark, which is based in San Diego, California, replaces telephone lines in commercial buildings, such as the ones used in fire panels, elevators, emergency phone lines, point-of-sale terminals, and fax lines, with cellular connections.

We intend to, where appropriate, make ~~other~~ strategic investments and acquisitions to complement, expand, and/or enter into new businesses. In considering acquisitions and investments, we search for opportunities to profitably grow our existing businesses and/or to add qualitatively to the range and diversification of businesses in our portfolio. At this time, we cannot guarantee that we will be presented with ~~other~~ acquisition opportunities that meet our ~~return on investment~~return-on-investment criteria, or that our efforts to make acquisitions that meet our criteria will be successful.

Contractual Obligations and Other Commercial Commitments

The following table quantifies our future contractual obligations and other commercial commitments at ~~January~~October 31, 2021:

Payments Due by Period (in millions)	Total		Less than 1 year		1–3 years		4–5 years		After 5 years
Purchase commitments	$	4.0	$	4.0	$	—	$	—	$	—
Connectivity obligations under service agreements		0.6		0.6		—		—		—
Operating leases including short-term leases		8.9		3.1		4.4		1.2		0.2

Total contractual obligations (1)	$	13.5	$	7.7	$	4.4	$	1.2	$	0.2

Payments Due by Period
(in millions)

Total

Less than
1 year

1–3 years

4–5 years

After 5 years

Purchase commitments $ 1.3 $ 1.3 $ — $ — $ —
Connectivity obligations under service agreements 1.4 1.0 0.4 — —
Operating leases including short-term leases 10.0 3.2 4.5 2.3 —
Total contractual obligations (1) $ 12.7 $ 5.5 $ 4.9 $ 2.3 $ —

(1)

The above table does not include up to $10 million for the potential redemption of shares of NRS’ Class B common stock, an aggregate of ~~$19.8~~$19.6 million in performance bonds, ~~or $1.3~~and $1.7 million in potential contingent consideration related to business acquisitions, due to the uncertainty of the amount and/or timing of any such payments.

Off-Balance Sheet Arrangements

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources, other than the following.

In connection with our spin-off of Straight Path in July 2013, we and Straight Path entered into various agreements prior to the spin-off including a Separation and Distribution Agreement to effect the separation and provide a framework for our relationship with Straight Path after the spin-off, and a Tax Separation Agreement, which sets forth the responsibilities of us and Straight Path with respect to, among other things, liabilities for federal, state, local and foreign taxes for periods before and including the spin-off, the preparation and filing of tax returns for such periods and disputes with taxing authorities regarding taxes for such periods. Pursuant to the Separation and Distribution Agreement, we indemnify Straight Path and Straight Path indemnifies us for losses related to the failure of the other to pay, perform or otherwise discharge, any of the liabilities and obligations set forth in the agreement. Pursuant to the Tax Separation Agreement, we indemnify Straight Path from all liability for taxes of Straight Path or any of its subsidiaries or relating to the Straight Path business with respect to taxable periods ending on or before the spin-off, from all liability for taxes of ours, other than Straight Path and its subsidiaries, for any taxable period, and from all liability for taxes due to the spin-off. (See Note 1417 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly ~~Report on Form 10-Q)~~Report).

We have performance bonds issued through third parties for the benefit of various states in order to comply with the states’ financial requirements for money remittance licenses and telecommunications resellers. At ~~January~~October 31, 2021, we had aggregate performance bonds of ~~$19.8~~$19.6 million outstanding.

Item 3.

Quantitative and Qualitative Disclosures About Market Risks

~~Item 3.~~~~Quantitative and Qualitative Disclosures About Market Risks~~

Foreign Currency Risk

Revenues from our international operations were 28% and 14% of our consolidated revenues in the three months ended October 31, 2021 and 2020, respectively. On February 1, 2021, we changed the geographic sourcing of certain revenues from the United States to the United Kingdom. A significant portion of these revenues is in currencies other than the U.S. Dollar. Our foreign currency exchange risk is somewhat mitigated by our ability to offset a portion of these non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign currency exchange rate changes at the end of each reporting period is generally not material.

~~Smaller reporting companies are not required to provide the information required by this item.~~

Investment Risk

~~Item 4.~~~~Controls~~We hold a portion of our assets in debt and ~~Procedures~~equity securities, including hedge funds, for strategic and speculative purposes. At October 31, 2021, the value of our debt and equity securities was an aggregate of $54.3 million, which represented 10.7% of our total assets. Investments in debt and equity securities carry a degree of risk and depend to a great extent on correct assessments of the future course of price movements of securities and other instruments. There can be no assurance that our investment managers will be able to accurately predict these price movements. The securities markets have in recent years been characterized by great volatility and unpredictability. Accordingly, the value of our investments may go down as well as up and we may not receive the amounts originally invested upon redemption.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of ~~January~~October 31, 2021.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended ~~January~~October 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

~~Item 1.~~~~Legal Proceedings~~

Item 1.

Legal Proceedings

Legal proceedings in which we are involved are described in Note 1417 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly ~~Report on Form 10-Q.~~Report.

~~Item 1A.~~~~Risk Factors~~

Item 1A.

Risk Factors

There are no material changes from the risk factors previously disclosed in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2020, except for the following:~~2021.

~~Our U.K.-based businesses and business between the U.K. and other countries face risks related to the United Kingdom leaving the European Union (“Brexit”).~~

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

We operate our business worldwide, including meaningful operations in the United Kingdom. Accordingly, we are subjected to risks from changes in the regulatory environment in various countries. On June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the European Union, or EU, (commonly referred to as “Brexit”). The United Kingdom formally left the EU on April 30, 2020 and had entered a transition period until December 31, 2020. The EU and the United Kingdom concluded the EU-UK Trade and Cooperation Agreement (the “TCA”) on December 24, 2020, which took effect provisionally on January 1, 2021 following the end of the formal transition period and will become formally applicable once ratified by both the United Kingdom and the EU. The TCA sets out the arrangements between the United Kingdom and EU on trade in certain areas (e.g. goods and some services, energy, fisheries, social security coordination), however there is still uncertainty over how its terms will play out in practice and there are still key aspects of the United Kingdom’s relationship with the EU which are not covered by the TCA, such as in respect of financial services. We expect that uncertainty over the terms of the TCA and other future agreements between the United Kingdom and EU will continue to cause political and economic uncertainty, which could harm our business and financial results. The withdrawal will, among other outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the EU, and result in increased legal and regulatory complexities, as well as potential higher costs of conducting business in Europe. Until there is greater understanding on how the terms of the TCA will play out in practice, and until the terms of other potential agreements that the United Kingdom may eventually enter into with the EU are known, it is not possible to determine the extent of the impact that the United Kingdom's departure from the EU and/or any related matters may have on us; however, any of these effects of Brexit, and others we cannot anticipate, could adversely affect our business, business opportunities, results of operations, financial condition, and cash flows. Likewise, similar actions taken by European and other countries in which we operate could have a similar or even more profound impact.

Further, Brexit could adversely affect European and worldwide economic or market conditions and could contribute to instability in global financial markets, and the value of the Pound Sterling currency or other currencies, including the Euro. We are exposed to the economic, market, and fiscal conditions in the United Kingdom and the EU and to changes in any of these conditions.

IDT Financial Services Limited, or IDTFS, our Gibraltar-based bank, currently operates under a license from the Gibraltar Financial Services Commission. As an overseas British Territory, following the expiration of the Brexit transition period, the passporting rights previously enjoyed by IDTFS under EU law have ceased to be in effect. Although we are currently seeking an e-money license issued by an EU country, since this was not secured prior to expiration of the transition period, alternative arrangements were made with third parties to service customers in EU countries previously serviced by IDTFS. Our inability to service these customers will lead to a reduction in the revenues previously earned from them.

Eight trusts for the benefit of sons and daughters of Howard S. Jonas, our Chairman of the Board of Directors, hold shares that, in the aggregate, represent more than a majority of the combined voting power of our outstanding capital stock, which may limit the ability of other stockholders to affect our management.

Eight trusts for the benefit of children of Howard S. Jonas, (the "Trusts"), our Chairman of the Board, collectively have voting power over 1,574,326 shares of our common stock, (which is all the issued and outstanding shares of the Class A common stock), which are convertible into shares of our Class B common stock on a 1-for-1 basis, and 2,382,371 shares of our Class B common stock, representing approximately 69.5% of the combined voting power of our outstanding capital stock, as of March 8, 2021. In addition, as of March 8, 2021, The HSJ 2020 IDT Annuity Trust holds 2,502,899 shares of our Class B common stock. Each of the Trusts has a different, independent trustee.

~~Howard~~ S. Jonas serves as our Chairman of the Board, which is not an officer position. However, he is our founder and served as an executive officer, including our Chief Executive Officer, for a very significant time period, and the members of the Board and management often look to him for guidance on major financial, operational and strategic matters.

Howard S. Jonas does not have the right to direct or control the voting of the shares of our common stock that is held by the Trusts, and the independent trustees hold sole voting and dispositive power over the common stock held by the Trusts. However, he is the trustor of the trusts and is the father of each of the beneficiaries of the Trusts and his views may be taken into account by the trustees and others related to the Trusts.

We are not aware of any voting agreement between or among any of the Trusts and/or Howard S. Jonas, but if such a voting agreement or other similar arrangement exists or were to be consummated, if all or several or all of the Trusts were to act in concert, or if we issued additional Class A common stock, certain or all of the Trusts and/or Howard S. Jonas along with holders of the Class A common stock would be able to control matters requiring approval by our stockholders, including the election of all of the directors, amendment of organizational documents and the approval of significant corporate transactions, including any merger, consolidation or sale of all or substantially all of our assets. As a result, the ability of any of our other stockholders to influence our management may be limited. In addition, our dual class structure has an anti-takeover effect, and accordingly, the holders of the shares of Class A common stock have the ability to prevent any change in control transactions that may otherwise be in the best interest of stockholders.

~~Item 2.~~~~Unregistered Sales of Equity Securities and Use of Proceeds~~

The following table provides information with respect to purchases by us of our shares during the ~~second~~first quarter of fiscal ~~2021:~~2022:

Total
Number of
Shares
Purchased

Average
Price
per Share

Total Number
of Shares
Purchased as
part of
Publicly
Announced
Plans or
Programs

Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs (1)

November 1-30, 2020 — $ — — 5,768,497
December 1–31, 2020 — $ — — 5,768,497
January 1–31, 2021 (2) 108,328 $ 12.33 — 5,768,497

Total 108,328 $ 12.33 —

	Total Number of Shares Purchased		Average Price per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
August 1-31, 2021		—	$	—		—		5,768,497
September 1–30, 2021		627	$	40.68		—		5,768,497
October 1–31, 2021		—	$	—		—		5,768,497

Total		627	$	40.68		—

(1)

On January 22, 2016, our Board of Directors approved a stock repurchase program to purchase up to 8.0 million shares of our Class B common stock.

~~(2)~~

Consists of shares of our Class B common stock that were tendered by employees of ours to satisfy the employees’ tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date and the proceeds utilized to pay the taxes due upon such vesting event.

~~Item 3.~~~~Defaults Upon Senior Securities~~

Item 3.

Defaults Upon Senior Securities

None

~~Item 4.~~~~Mine Safety Disclosures~~

Item 4.

Mine Safety Disclosures

Not applicable

Item 5.

Other Information

~~Item 5.~~~~Other Information~~

None

Item6.

Exhibits

~~Item 6~~.~~Exhibits~~

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed or furnished herewith.

~~Filed or furnished herewith.~~

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IDT CORPORATION

~~March 12,~~December 10, 2021	By:	/s/ ~~Shmuel Jonas~~SHMUEL JONAS
		Shmuel Jonas Chief Executive Officer

~~March 12,~~December 10, 2021	By:	/s/ ~~Marcelo Fischer~~MARCELO FISCHER
		Marcelo Fischer Chief Financial Officer

	January 31, 2021			July 31, 2020
	(Unaudited)			(Note 1)
	(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	79,481		$	84,860
Restricted cash and cash equivalents		109,858			116,362
Debt securities		21,501			18,363
Equity investments		24,346			5,964
Trade accounts receivable, net of allowance for doubtful accounts of $6,909 at January 31, 2021 and $6,085 at July 31, 2020		51,616			44,166
Prepaid expenses		34,671			33,115
Other current assets		19,926			19,302
Total current assets		341,399			322,132
Property, plant and equipment, net		30,641			30,061
Goodwill		14,843			12,858
Other intangibles, net		6,289			3,959
Equity investments		10,441			8,833
Operating lease right-of-use assets		8,794			9,490
Deferred income tax assets, net		2,832			8,512
Other assets		9,332			8,905
Total assets	$	424,571		$	404,750
Liabilities and equity
Current liabilities:
Trade accounts payable	$	36,368		$	31,147
Accrued expenses		126,425			125,544
Deferred revenue		39,189			40,114
Customer deposits		109,673			115,992
Other current liabilities		14,646			12,073
Total current liabilities		326,301			324,870
Operating lease liabilities		6,514			7,353
Other liabilities		1,340			1,388
Total liabilities		334,155			333,611
Commitments and contingencies
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, 2021 and July 31, 2020		33			33
Class B common stock, $.01 par value; authorized shares—200,000; 26,343 and 25,961 shares issued and 24,151 and 24,345 shares outstanding at January 31, 2021 and July 31, 2020, respectively		263			260
Additional paid-in capital		276,871			277,443
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 2,192 and 1,616 shares of Class B common stock at January 31, 2021 and July 31, 2020, respectively		(60,413	)		(56,221	)
Accumulated other comprehensive loss		(8,957	)		(7,410	)
Accumulated deficit		(117,937	)		(139,333	)
Total IDT Corporation stockholders’ equity		89,860			74,772
Noncontrolling interests		556			(3,633	)
Total equity		90,416			71,139
Total liabilities and equity	$	424,571		$	404,750

	Three Months Ended January 31, 2021 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Accumulated Deficit			Noncontrolling Interests			Total Equity
BALANCE AT OCTOBER 31, 2020	$	33	$	260	$	278,134		$	(59,077	)	$	(7,188	)	$	(131,045	)	$	(3,534	)	$	77,583
Exercise of stock options		—		—		501			—			—			—			—			501
Restricted Class B common stock purchased from employees		—		—		—			(1,336	)		—			—			—			(1,336	)
Grant of restricted equity in subsidiary (see Note 11).		—		—		(2,195	)		—			—			—			2,195			—
Business acquisition		—		—		—			—			—			—			2,188			2,188
Stock-based compensation		—		3		431			—			—			—			—			434
Distributions to noncontrolling interests		—		—		—			—			—			—			(390	)		(390	)
Other comprehensive loss		—		—		—			—			(1,769	)		—			—			(1,769	)
Net income		—		—		—			—			—			13,108			97			13,205
BALANCE AT JANUARY 31, 2021	$	33	$	263	$	276,871		$	(60,413	)	$	(8,957	)	$	(117,937	)	$	556		$	90,416


	Three Months Ended January 31, 2020 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Accumulated Deficit			Noncontrolling Interests			Total Equity
BALANCE AT OCTOBER 31, 2019	$	33	$	258	$	274,953	$	(51,739	)	$	(6,062	)	$	(162,276	)	$	(2,836	)	$	52,331
Restricted Class B common stock purchased from employees		—		—		—		(266	)		—			—			—			(266	)
Stock-based compensation		—		2		1,165		—			—			—			—			1,167
Distributions to noncontrolling interests		—		—		—		—			—			—			(230	)		(230	)
Other comprehensive loss		—		—		—		—			(513	)		—			—			(513	)
Net income		—		—		—		—			—			932			(28	)		904
BALANCE AT JANUARY 31, 2020	$	33	$	260	$	276,118	$	(52,005	)	$	(6,575	)	$	(161,344	)	$	(3,094	)	$	53,393

Twelve-month period ending January 31:
2022	$	2,768
2023		2,526
2024		1,957
2025		1,844
2026		497
Thereafter		—
Total lease payments		9,592
Less imputed interest		(541	)
Total operating lease liabilities	$	9,051

Cash paid	$	2,732
Cash acquired		(344	)
Cash paid, net of cash acquired		2,388
Contingent consideration		393
Total fair value of consideration, net of cash acquired	$	2,781

Trade accounts receivable	$	656
Prepaid expenses		1,644
Property, plant and equipment		75
Goodwill		1,894
Customer relationships (15-year useful lives)		1,960
Tradenames (20-year useful lives)		440
Deferred income tax assets		197
Other assets		161
Trade accounts payable		(1,306	)
Accrued expenses		(423	)
Other current liabilities		(329	)
Noncontrolling interests		(2,188	)
Net assets excluding cash acquired	$	2,781

Cash paid	$	450
Contingent consideration		375
Total fair value of consideration	$	825

	Unrealized Gain (Loss) on Available-for-Sale Securities		Foreign Currency Translation			Accumulated Other Comprehensive Loss
	(in thousands)
Balance, July 31, 2020	$	42	$	(7,452	)	$	(7,410	)
Other comprehensive income (loss) attributable to IDT Corporation		17		(1,564	)		(1,547	)
Balance, January 31, 2021	$	59	$	(9,016	)	$	(8,957	)

Payments Due by Period (in millions)	Total		Less than 1 year		1–3 years		4–5 years		After 5 years
Purchase commitments	$	1.3	$	1.3	$	—	$	—	$	—
Connectivity obligations under service agreements		1.4		1.0		0.4		—		—
Operating leases including short-term leases		10.0		3.2		4.5		2.3		—
Total contractual obligations (1)	$	12.7	$	5.5	$	4.9	$	2.3	$	—

	Total Number of Shares Purchased		Average Price per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
November 1-30, 2020		—	$	—		—		5,768,497
December 1–31, 2020		—	$	—		—		5,768,497
January 1–31, 2021 (2)		108,328	$	12.33		—		5,768,497

Total		108,328	$	12.33		—