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

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, ~~2023~~2024

☐	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

(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

~~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 ~~8, 2023,~~6, 2024, 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:	~~23,952,533~~23,813,251 shares outstanding (excluding ~~3,829,654~~4,309,732 treasury shares)

IDT CORPORATION

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Equity	6

	Consolidated Statements of Cash Flows	8

	Notes to Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2526

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	3536

Item 4.	Controls and Procedures	3536

PART II. OTHER INFORMATION		3637

Item 1.	Legal Proceedings	3637

Item 1A.	Risk Factors	3637

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3637

Item 3.	Defaults Upon Senior Securities	3637

Item 4.	Mine Safety Disclosures	3637

Item 5.	Other Information	3637

Item 6.	Exhibits	3637

SIGNATURES		3738

PART I. FINANCIAL INFORMATION

~~PART I. FINANCIAL INFORMATION~~

Item 1. Financial Statements (Unaudited)

IDT CORPORATION

CONSOLIDATED BALANCE SHEETS

	January 31, 2023			July 31, 2022			January 31, 2024			July 31, 2023
	(Unaudited)			(Note 1)			(Unaudited)			(Note 1)
	(in thousands, except per share data)						(in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	117,811		$	98,352		$	141,081		$	103,637
Restricted cash and cash equivalents		89,867			91,210			93,231			95,186
Debt securities		29,777			22,303			31,419			42,414
Equity investments		9,213			17,091			5,076			6,198
Trade accounts receivable, net of allowance for doubtful accounts of $6,255 at January 31, 2023 and $5,882 at July 31, 2022		47,605			64,315
Trade accounts receivable, net of allowance for credit losses of $6,315 at January 31, 2024 and allowance for doubtful accounts of $5,642 at July 31, 2023								37,392			32,092
Settlement assets, net of reserve of $1,514 at January 31, 2024 and $1,143 at July 31, 2023								17,200			32,396
Disbursement prefunding		28,098			21,057			27,749			30,113
Prepaid expenses		14,611			17,526			23,523			16,638
Other current assets		36,559			30,773			30,905			28,394

Total current assets		373,541			362,627			407,576			387,068
Property, plant, and equipment, net		38,303			36,866			38,713			38,655
Goodwill		26,547			26,380			26,318			26,457
Other intangibles, net		8,985			9,609			7,026			8,196
Equity investments		6,687			7,426			7,558			9,874
Operating lease right-of-use assets		6,894			7,210			5,079			5,540
Deferred income tax assets, net		28,913			36,701			18,313			24,101
Other assets		10,641			10,275			11,195			10,919

Total assets	$	500,511		$	497,094		$	521,778		$	510,810

Liabilities, redeemable noncontrolling interest, and equity
Current liabilities:
Trade accounts payable	$	23,229		$	29,080		$	21,514		$	22,231
Accrued expenses		110,580			117,109			107,181			110,796
Deferred revenue		34,998			36,531			33,803			35,343
Customer deposits		86,899			85,764			87,553			86,481
Settlement liabilities								15,789			21,495
Other current liabilities		32,215			36,588			19,194			17,761

Total current liabilities		287,921			305,072			285,034			294,107
Operating lease liabilities		4,243			4,606			2,448			2,881
Other liabilities		4,944			6,588			3,716			3,354

Total liabilities		297,108			316,266			291,198			300,342
Commitments and contingencies								-			-
Redeemable noncontrolling interest		10,389			10,191			10,693			10,472
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, 2023 and July 31, 2022		33			33
Class B common stock, $.01 par value; authorized shares—200,000; 27,782 and 27,725 shares issued and 23,952 and 24,112 shares outstanding at January 31, 2023 and July 31, 2022, respectively		278			277
Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and 1,574 shares outstanding at January 31, 2024 and July 31, 2023								33			33
Class B common stock, $.01 par value; authorized shares—200,000; 28,069 and 27,851 shares issued and 23,781 and 23,699 shares outstanding at January 31, 2024 and July 31, 2023, respectively								281			279
Common stock, value								281			279
Additional paid-in capital		298,649			296,005			300,631			301,408
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 3,830 and 3,613 shares of Class B common stock at January 31, 2023 and July 31, 2022, respectively		(106,906	)		(101,565	)
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,288 and 4,152 shares of Class B common stock at January 31, 2024 and July 31, 2023, respectively								(118,631	)		(115,461	)
Accumulated other comprehensive loss		(13,711	)		(11,305	)		(17,276	)		(17,192	)
Retained earnings (accumulated deficit)		9,795			(15,830	)
Retained earnings								46,746			24,662

Total IDT Corporation stockholders’ equity		188,138			167,615			211,784			193,729
Noncontrolling interests		4,876			3,022			8,103			6,267

Total equity		193,014			170,637			219,887			199,996

Total liabilities, redeemable noncontrolling interest, and equity	$	500,511		$	497,094		$	521,778		$	510,810

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

													2024			2023			2024			2023
	Three Months Ended January 31,						Six Months Ended January 31,						Three Months Ended January 31,						Six Months Ended January 31,
	2023			2022			2023			2022			2024			2023			2024			2023
	(in thousands, except per share data)												(in thousands, except per share data)

Revenues	$	313,936		$	337,058		$	635,752		$	707,141		$	296,098		$	313,936		$	597,302		$	635,752
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		222,394			257,325			454,031			548,950
Direct cost of revenues														198,699			223,499			405,475			456,170
Gross profit														97,399			90,437			191,827			179,582
Operating expenses (gains):
Selling, general and administrative (i)		68,153			61,070			134,017			121,177			80,743			72,060			157,965			141,679
Depreciation and amortization		5,012			4,378			9,801			8,825
Severance		213			29			312			67			345			213			869			312
Total costs and expenses		295,772			322,802			598,161			679,019
Other operating gain (expense), net (see Note 10)		17			(442	)		816			(530	)
Other operating expense (gain), net (see Note 10)														294			(17	)		(190	)		(816	)

Total operating expenses														81,382			72,256			158,644			141,175

Income from operations		18,181			13,814			38,407			27,592			16,017			18,181			33,183			38,407
Interest income, net		810			119			1,320			132			1,195			810			2,039			1,320
Other income (expense), net		1,613			(2,949	)		(2,229	)		(19,165	)		2,534			1,613			(3,053	)		(2,229	)

Income before income taxes		20,604			10,984			37,498			8,559			19,746			20,604			32,169			37,498
Provision for income taxes		(5,295	)		(2,734	)		(9,634	)		(2,648	)		(3,992	)		(5,295	)		(7,939	)		(9,634	)

Net income		15,309			8,250			27,864			5,911			15,754			15,309			24,230			27,864
Net income attributable to noncontrolling interests		(686	)		(763	)		(2,239	)		(896	)		(1,329	)		(686	)		(2,146	)		(2,239	)

Net income attributable to IDT Corporation	$	14,623		$	7,487		$	25,625		$	5,015		$	14,425		$	14,623		$	22,084		$	25,625

Earnings per share attributable to IDT Corporation common stockholders:
Basic	$	0.57		$	0.29		$	1.00		$	0.20		$	0.57		$	0.57		$	0.88		$	1.00

Diluted	$	0.57		$	0.28		$	1.00		$	0.19		$	0.57		$	0.57		$	0.87		$	1.00

Weighted-average number of shares used in calculation of earnings per share:
Basic		25,510			25,652			25,556			25,609			25,175			25,510			25,176			25,556

Diluted		25,538			26,542			25,577			26,580			25,317			25,538			25,297			25,577

(i) Stock-based compensation included in selling, general and administrative expenses	$	1,286		$	310		$	1,858		$	595		$	2,487		$	1,286		$	3,258		$	1,858

(i)

Stock-based compensation included in selling, general and administrative expenses

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	2023			2022			2023			2022			2024			2023			2024			2023
	Three Months Ended January 31,						Six Months Ended January 31,						Three Months Ended January 31,						Six Months Ended January 31,
	2023			2022			2023			2022			2024			2023			2024			2023
	(in thousands)												(in thousands)
Net income	$	15,309		$	8,250		$	27,864		$	5,911		$	15,754		$	15,309		$	24,230		$	27,864
Other comprehensive loss:
Change in unrealized loss on available-for-sale securities		188			(212	)		(34	)		(323	)		270			188			204			(34	)
Foreign currency translation adjustments		(2,227	)		(1,650	)		(2,372	)		(582	)		(919	)		(2,227	)		(288	)		(2,372	)

Other comprehensive loss		(2,039	)		(1,862	)		(2,406	)		(905	)		(649	)		(2,039	)		(84	)		(2,406	)

Comprehensive income		13,270			6,388			25,458			5,006			15,105			13,270			24,146			25,458
Comprehensive (income) attributable to noncontrolling interests		(686	)		(763	)		(2,239	)		(896	)
Comprehensive income attributable to noncontrolling interests														(1,329	)		(686	)		(2,146	)		(2,239	)

Comprehensive income attributable to IDT Corporation	$	12,584		$	5,625		$	23,219		$	4,110		$	13,776		$	12,584		$	22,000		$	23,219

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

~~(Unaudited)~~


	Three Months Ended January 31, 2024 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interests			Total Equity
BALANCE AT OCTOBER 31, 2023	$	33	$	279	$	302,351		$	(118,312	)	$	(16,627	)	$	32,321	$	6,922		$	206,967
Repurchases of Class B common stock through repurchase program		—		—		—			(319	)		—			—		—			(319	)
Restricted net2phone common stock purchased from employees		—		—		(3,611	)		—			—			—		53			(3,558	)
Exchange of National Retail Solutions shares for Class B common stock		—		2		81			—			—			—		(83	)		—
Stock issued to certain executive officers for bonus payments
Stock-based compensation		—		—		1,810			—			—			—		—			1,810
Distributions to noncontrolling interests		—		—		—			—			—			—		(4	)		(4	)
Other comprehensive loss		—		—		—			—			(649	)		—		—			(649	)
Net income		—		—		—			—			—			14,425		1,215			15,640
BALANCE AT JANUARY 31, 2024	$	33	$	281	$	300,631		$	(118,631	)	$	(17,276	)	$	46,746	$	8,103		$	219,887

Three Months Ended January 31, 2023
(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) Retained Earnings Noncontrolling
Interests Total
Equity
BALANCE AT OCTOBER 31, 2022 $ 33 $ 278 $ 297,191 $ (106,906 ) $ (11,672 ) $ (4,828 ) $ 4,343 $ 178,439
Exercise of stock options — —
172
— — — �� 172
Stock-based compensation —
—
1,286 — — — — 1,286
Distributions to noncontrolling interests — — — — — — (88 ) (88 )
Other comprehensive loss — — — — (2,039 ) — — (2,039 )
Net income — — — — — 14,623 621 15,244
BALANCE AT JANUARY 31, 2023 $ 33 $ 278 $ 298,649 $ (106,906 ) $ (13,711 ) $ 9,795 $ 4,876 $ 193,014

	Six Months Ended January 31, 2023 (in thousands)
	IDT Corporation Stockholders																					Six Months Ended January 31, 2024 (in thousands)
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			(Accumulated Deficit) Retained Earnings			Noncontrolling Interests			Total Equity			IDT Corporation Stockholders
BALANCE AT JULY 31, 2022	$	33	$	277	$	296,005	$	(101,565	)	$	(11,305	)	$	(15,830	)	$	3,022		$	170,637
																						Class A Common Stock		Class B Common Stock		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interests			Total Equity
BALANCE AT JULY 31, 2023																						$	33	$	279	$	301,408		$	(115,461	)	$	(17,192	)	$	24,662	$	6,267		$	199,996
Exercise of stock options		—		—		172		—			—			—			—			172			—		—		172			—			—			—		—			172
Repurchases of Class B common stock through repurchase program		—		—		—		(5,006	)		—			—			—			(5,006	)		—		—		—			(3,155	)		—			—		—			(3,155	)
Restricted Class B common stock purchased from employees		—		—		—		(335	)		—			—			—			(335	)		—		—		—			(15	)		—			—		—			(15	)
Stock issued to certain executive officers for bonus payments		—		—		615		—			—			—			—			615
Restricted net2phone common stock purchased from employees																							—		—		(3,611	)		—			—			—		53			(3,558	)
Exchange of National Retail Solutions shares for Class B common stock																							—		2		81			—			—			—		(83	)		—
Stock-based compensation		—		1		1,857		—			—			—			—			1,858			—		—		2,581			—			—			—		—			2,581
Distributions to noncontrolling interests		—		—		—		—			—			—			(187	)		(187	)		—		—		—			—			—			—		(59	)		(59	)
Other comprehensive loss		—		—		—		—			(2,406	)		—			—			(2,406	)		—		—		—			—			(84	)		—		—			(84	)
Net income		—		—		—		—			—			25,625			2,041			27,666			—		—		—			—			—			22,084		1,925			24,009
BALANCE AT JANUARY 31, 2023	$	33	$	278	$	298,649	$	(106,906	)	$	(13,711	)	$	9,795		$	4,876		$	193,014
BALANCE AT JANUARY 31, 2024																						$	33	$	281	$	300,631		$	(118,631	)	$	(17,276	)	$	46,746	$	8,103		$	219,887

IDT CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY—Continued

(Unaudited)

Three Months Ended January 31, 2022
(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, 2021 $ 33 $ 264 $ 278,306 $ (60,439 ) $ (9,226 ) $ (45,330 ) $ 1,690 $ 165,298
Restricted Class B common stock purchased from employees — — — (8,948 ) — — — (8,948 )
Stock-based compensation — 3 307 — — — — 310
Distributions to noncontrolling interests — — — — — — (15 ) (15 )
Other comprehensive loss — — — — (1,862 ) — — (1,862 )
Net income — — — — — 7,487 710 8,197
BALANCE AT JANUARY 31, 2022 $ 33 $ 267 $ 278,613 $ (69,387 ) $ (11,088 ) $ (37,843 ) $ 2,385 $ 162,980

Six Months Ended January 31, 2022
(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
Beginning balance, value $ 33 $ 264 $ 278,021 $ (60,413 ) $ (10,183 ) $ (42,858 ) $ 1,750 $ 166,614
Restricted Class B common stock purchased from employees — — — (8,974 ) — — — (8,974 )
Stock-based compensation — 3 592 — — — — 595
Distributions to noncontrolling interests — — — — — — (198 ) (198 )
Other comprehensive loss — — — — (905 ) — — (905 )
Net income — — — — — 5,015 833 5,848
BALANCE AT JANUARY 31, 2022 $ 33 $ 267 $ 278,613 $ (69,387 ) $ (11,088 ) $ (37,843 ) $ 2,385 $ 162,980
Ending balance, value $ 33 $ 267 $ 278,613 $ (69,387 ) $ (11,088 ) $ (37,843 ) $ 2,385 $ 162,980


	Three Months Ended January 31, 2023 (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) Retained Earnings			Noncontrolling Interests			Total Equity
BALANCE AT OCTOBER 31, 2022	$	33	$	278	$	297,191	$	(106,906	)	$	(11,672	)	$	(4,828	)	$	4,343		$	178,439
Exercise of stock options		—		—		172		—			—			—			—			172
Stock-based compensation		—		—		1,286		—			—			—			—			1,286
Distributions to noncontrolling interests		—		—		—		—			—			—			(88	)		(88	)
Other comprehensive loss		—		—		—		—			(2,039	)		—			—			(2,039	)
Net income		—		—		—		—			—			14,623			621			15,244
BALANCE AT JANUARY 31, 2023	$	33	$	278	$	298,649	$	(106,906	)	$	(13,711	)	$	9,795		$	4,876		$	193,014


	Six Months Ended January 31, 2023 (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) Retained Earnings			Noncontrolling Interests			Total Equity
BALANCE AT JULY 31, 2022	$	33	$	277	$	296,005	$	(101,565	)	$	(11,305	)	$	(15,830	)	$	3,022		$	170,637
BALANCE	$	33	$	277	$	296,005	$	(101,565	)	$	(11,305	)	$	(15,830	)	$	3,022		$	170,637
Exercise of stock options		—		—		172		—			—			—			—			172
Repurchases of Class B common stock through repurchase program		—		—		—		(5,006	)		—			—			—			(5,006	)
Restricted Class B common stock purchased from employees		—		—		—		(335	)		—			—			—			(335	)
Stock issued to certain executive officers for bonus payments		—		—		615		—			—			—			—			615
Stock-based compensation		—		1		1,857		—			—			—			—			1,858
Distributions to noncontrolling interests		—		—		—		—			—			—			(187	)		(187	)
Other comprehensive loss		—		—		—		—			(2,406	)		—			—			(2,406	)
Other comprehensive income (loss)		—		—		—		—			(2,406	)		—			—			(2,406	)
Net income		—		—		—		—			—			25,625			2,041			27,666
BALANCE AT JANUARY 31, 2023	$	33	$	278	$	298,649	$	(106,906	)	$	(13,711	)	$	9,795		$	4,876		$	193,014
BALANCE	$	33	$	278	$	298,649	$	(106,906	)	$	(13,711	)	$	9,795		$	4,876		$	193,014

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2023			2022			2024			2023
	Six Months Ended January 31,						Six Months Ended January 31,
	2023			2022			2024			2023
	(in thousands)						(in thousands)
Operating activities
Net income	$	27,864		$	5,911		$	24,230		$	27,864
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,801			8,825			10,146			9,801
Deferred income taxes		7,788			1,683			5,787			7,788
Provision for doubtful accounts receivable		915			1,289
Provision for credit losses, doubtful accounts receivable, and reserve for settlement assets								1,696			915
Net unrealized loss from marketable securities		2,349			16,242			1,234			2,349
Stock-based compensation		1,858			595			3,258			1,858
Other		1,359			2,850			1,595			1,359
Change in assets and liabilities:
Trade accounts receivable		16,298			(8,045	)		(7,040	)		2,483
Disbursement prefunding, prepaid expenses, other current assets, and other assets		(11,492	)		(8,551	)
Trade accounts payable, accrued expenses, other current liabilities, and other liabilities		(19,344	)		(6,313	)
Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets								9,966			2,323
Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities								(12,021	)		(19,344	)
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)		15			(1,862	)		2,253			15
Deferred revenue		(1,795	)		(960	)		(1,381	)		(1,795	)

Net cash provided by operating activities		35,616			11,664			39,723			35,616
Investing activities
Capital expenditures		(10,578	)		(8,991	)		(8,885	)		(10,578	)
Purchase of convertible preferred stock in equity method investment		—			(1,051	)		(1,009	)		—
Payments for acquisitions, net of cash acquired		—			(100	)
Payments for acquisition								(60	)		—
Purchases of debt securities and equity investments		(28,129	)		(10,825	)		(19,357	)		(28,129	)
Proceeds from maturities and sales of debt securities and redemptions of equity investments		27,531			6,068			31,231			27,531
Net cash used in investing activities		(11,176	)		(14,899	)

Net cash provided by (used in) investing activities								1,920			(11,176	)
Financing activities
Distributions to noncontrolling interests		(187	)		(198	)		(59	)		(187	)
Proceeds from other liabilities		300			2,301			100			300
Repayment of other liabilities.		(2,014	)		(1,291	)		(15	)		(2,014	)
Proceeds from borrowings under revolving credit facility		2,383			2,488			30,588			2,383
Repayment of borrowings under revolving credit facility.		(2,383	)		(2,488	)		(30,588	)		(2,383	)
Proceeds from sale of redeemable equity in subsidiary		—			10,000
Proceeds from exercise of stock options		172			—			172			172
Repurchases of Class B common stock		(5,341	)		(8,974	)		(3,170	)		(5,341	)
Net cash (used in) provided by financing activities		(7,070	)		1,838

Net cash used in financing activities								(2,972	)		(7,070	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents		746			(4,967	)		(3,182	)		746
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents		18,116			(6,364	)

Net increase in cash, cash equivalents, and restricted cash and cash equivalents								35,489			18,116
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period		189,562			226,916			198,823			189,562

Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	207,678		$	220,552		$	234,312		$	207,678

Supplemental schedule of non-cash financing activities
Restricted net2phone common stock withheld from employees for income tax obligations							$	3,558		$	—
Value of Class B common stock exchanged for National Retail Solutions shares							$	6,254		$	—
Stock issued to certain executive officers for bonus payments	$	615		$	—		$	—		$	615

See accompanying notes to consolidated financial statements.

IDT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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 31, ~~2023~~2024 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, ~~2023.~~2024. The balance sheet at July 31, ~~2022~~2023 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, ~~2022,~~2023, 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 ~~2023~~2024 refers to the fiscal year ending July 31, ~~2023)~~2024).

As of January 31, 2024, the Company owned 94.0% of the outstanding shares of its subsidiary, net2phone 2.0, Inc. (“net2phone 2.0”), which owns and operates the net2phone segment, and 81.2% of the outstanding shares of National Retail Solutions (“NRS”), and, on a fully diluted basis, assuming all the vesting criteria related to various rights granted have been met and other assumptions, the Company would own 90.8% of net2phone 2.0 and 78.9% of NRS.

Reclassifications

From and after August 1, 2023, the Company includes depreciation and amortization in “Direct cost of revenues” and “Selling, general and administrative” expense and is reporting gross profit (in accordance with U.S. GAAP) in the consolidated statements of income. Prior to August 1, 2023, depreciation and amortization was a separate caption in the consolidated statements of income. Depreciation and amortization expense of $5.0 million in the three months ended January 31, 2023 was reclassified to conform to the current year’s presentation as follows: $1.1 million was reclassified to “Direct cost of revenues” and $3.9 million was reclassified to “Selling, general and administrative” expense, and depreciation and amortization expense of $9.8 million in the six months ended January 31, 2023 was reclassified to conform to the current year’s presentation as follows: $2.1 million was reclassified to “Direct cost of revenues” and $7.7 million was reclassified to “Selling, general and administrative” expense.

In the consolidated statements of cash flows, cash provided by “Trade accounts receivable” in the six months ended January 31, 2023 of $13.8 million was reclassified to “Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets” to conform to the current year’s presentation.

Recently Adopted Accounting Standard

On August 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, that changed the impairment model for most financial assets and certain other instruments. For receivables, entities are required to use a new forward-looking current expected credit loss model to determine its allowance for credit losses, which replaced the allowance for doubtful accounts. When determining the allowance for credit losses for its trade accounts receivable, the Company considers the probability of recoverability of accounts receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates. The Company also considers future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks will be assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Account balances are written off against the allowance when it is determined that the receivable will not be recovered. For available-for-sale debt securities with unrealized losses, the concept of “other-than-temporary” impairment was replaced by a determination whether any impairment is a result of a credit loss or other factors. The portion of the unrealized loss that is the result of a credit loss is recognized as an allowance and a corresponding expense recorded in “Other income (expense), net” in the consolidated statements of income. Unrealized loss that is not the result of a credit loss is recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements, and it was not necessary to record a cumulative-effect adjustment to retained earnings as of August 1, 2023.

Note 2—Business Segment Information

~~As of August 1, 2022, the~~The Company revised its reportable business segments primarily to reflect the growth of its financial technology businesses and their increased contributions to the Company’s consolidated results. The Company’shas four reportable business segments, NRS, Fintech, ~~National Retail Solutions (“NRS”),~~ net2phone, and Traditional Communications. Any items not included within, or allocated to, one of the segments is presented under “Corporate.”

The NRS segment is an operator of a nationwide point-of-sale (“POS”) network providing independent retailers with store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.

The Fintech segment is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; and (ii) other, significantly smaller, financial services businesses, including Leaf Global Fintech Corporation (“Leaf”), a provider of digital wallet services in emerging markets, a variable interest entity that operates money transfer businesses, and IDT Financial Services Limited (“IDT Financial Services”), the Company’s Gibraltar-based bank.

The net2phone segment is comprised of net2phone’s cloud communications and contact center offerings.

The Traditional Communications ~~reflect management’s current approach~~segment includes: (i) IDT Digital Payments, which enables customers to ~~analyzing results, its resource allocation strategy,~~transfer airtime and ~~its assessment~~bundles of ~~business performance. NRS was previously included~~airtime, messaging, and data to international and domestic mobile accounts; (ii) BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the ~~Company’s Fintech segment. In addition, certain lines~~United States and Canada; and (iii) IDT Global, a wholesale provider of ~~business were reclassified~~international voice and SMS termination and outsourced traffic management solutions to ~~the Fintech segment from the~~telecoms worldwide. Traditional Communications ~~segment. Comparative segment information has been reclassified~~also includes other small businesses and ~~restated~~offerings including early-stage business initiatives and mature businesses in ~~all periods to conform to the current period presentation.~~harvest mode.

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 is comprised of BOSS Money, a provider of international money remittance and related value/payment transfer services, as well as other, significantly smaller financial services businesses, including Leaf Global Fintech Corporation (“Leaf”), a provider of digital wallet services in emerging markets, the Company’s variable interest entity (“VIE”) that operates money transfer businesses (see Note 9), and IDT Financial Services Limited (“IDT Financial Services”), the Company’s Gibraltar-based bank.

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

~~The net2phone segment is comprised of net2phone’s cloud communications offerings.~~

The Traditional Communications segment 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 IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Corporate costs mainly 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, 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 National Retail Solutions net2phone Traditional Communications Corporate Total
Three Months Ended January 31, 2023
Revenues $ 20,321 $ 19,822 $ 17,794 $ 255,999 $ — $ 313,936
(Loss) income from operations (806 ) 5,374 (575 ) 17,008 (2,820 ) 18,181

Three Months Ended January 31, 2022
Revenues $ 14,599 $ 10,620 $ 13,535 $ 298,304 $ — $ 337,058
(Loss) income from operations (2,271 ) 2,058 (2,866 ) 19,897 (3,004 ) 13,814

Six Months Ended January 31, 2023
Revenues $ 40,208 $ 39,135 $ 34,744 $ 521,665 $ — $ 635,752
Income (loss) from operations
706
10,605 (1,631 ) 34,271 (5,544 ) 38,407

Six Months Ended January 31, 2022
Revenues $ 28,829 $ 20,692 $ 26,448 $ 631,172 $ — $ 707,141
(Loss) income from operations (3,866 ) 3,405 (7,059 ) 40,225 (5,113 ) 27,592
(in thousands) National Retail Solutions Fintech net2phone Traditional Communications Corporate Total
Three Months Ended January 31, 2024
Revenues $ 25,223 $ 27,987 $ 20,353 $ 222,535 $ — $ 296,098
Income (loss) from operations 5,349 (736 ) 367 14,618 (3,581 ) 16,017
Depreciation and amortization:
Included in “Direct cost of revenues” 483 62 600 185 — 1,330
Included in “Selling, general and administrative expense” 294 662 952 1,844 17 3,769

Three Months Ended January 31, 2023
Revenues $ 19,822 $ 20,321 $ 17,794 $ 255,999 $ — $ 313,936
Income (loss) from operations 5,374 (806 ) (575 ) 17,008 (2,820 ) 18,181
Depreciation and amortization:
Included in “Direct cost of revenues” 357 21 536 191 — 1,105
Included in “Selling, general and administrative expense” 237 637 855 2,160 18 3,907

Six Months Ended January 31, 2024
Revenues $ 49,217 $ 54,550 $ 40,280 $ 453,255 $ — $ 597,302
Income (loss) from operations 10,810 (2,120 ) 360 30,024 (5,891 ) 33,183
Depreciation and amortization:
Included in “Direct cost of revenues” 933 85 1,199 369 — 2,586
Included in “Selling, general and administrative expense” 579 1,333 1,792 3,807 49 7,560

Six Months Ended January 31, 2023
Revenues $ 39,135 $ 40,208 $ 34,744 $ 521,665 $ — $ 635,752
Income (loss) from operations 10,605 706 (1,631 ) 34,271 (5,544 ) 38,407
Depreciation and amortization:
Included in “Direct cost of revenues” 676 45 1,034 384 — 2,139
Included in “Selling, general and administrative expense” 395 1,235 1,709 4,287 36 7,662
Total depreciation and amortization 395 1,235 1,709 4,287 36 7,662
10
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 Money, NRS, and net2phone are technology-driven, synergistic businesses that leverage the Company’s core assets. BOSS ~~Money~~Money’s and NRS’ revenues are primarily recognized at a point in time, and net2phone’s revenue is mainly 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 ~~Mobile Top-Up,~~IDT Digital Payments, BOSS Revolution Calling, and IDT Global. ~~Mobile Top-Up~~IDT Digital Payments and BOSS Revolution Calling are sold ~~direct-to-consumers~~direct-to-consumer and through distributors and retailers.
Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:
Schedule of Revenues Disaggregated by Business Segment and Service Offered to Customers

Three Months Ended
January 31,

Six Months Ended
January 31,

2023 2022 2023 2022
(in thousands)
BOSS Money $ 17,649 $ 12,029 $ 35,203 $ 24,123
Other 2,672 2,570 5,005 4,706
Total Fintech 20,321 14,599 40,208 28,829
National Retail Solutions 19,822 10,620 39,135 20,692
net2phone 17,794 13,535 34,744 26,448
Mobile Top-Up 106,127 116,246 215,176 244,731
BOSS Revolution Calling 82,831 99,951 169,083 205,920
IDT Global 58,631 73,117 120,242 162,312
Other 8,410 8,990 17,164 18,209
Total Traditional Communications 255,999 298,304 521,665 631,172
Total $ 313,936 $ 337,058 $ 635,752 $ 707,141
10
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

2024 2023 2024 2023
(in thousands)
National Retail Solutions $ 25,223 $ 19,822 $ 49,217 $ 39,135

BOSS Money 25,039 17,649 49,278 35,203
Other 2,948 2,672 5,272 5,005

Total Fintech 27,987 20,321 54,550 40,208

net2phone 20,353 17,794 40,280 34,744

IDT Digital Payments 99,620 106,127 199,606 215,177
BOSS Revolution Calling 66,703 82,831 137,925 169,083
IDT Global 48,741 58,631 100,775 120,242
Other 7,471 8,410 14,949 17,163

Total Traditional Communications 222,535 255,999 453,255 521,665

Total $ 296,098 $ 313,936 $ 597,302 $ 635,752
Revenues $ 296,098 $ 313,936 $ 597,302 $ 635,752

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location:
Schedule of Revenues Disaggregated by Geographic Region

(in thousands) Fintech National Retail Solutions net2phone Traditional Communications Total National Retail Solutions Fintech net2phone Traditional Communications Total
Three Months Ended January 31, 2023
Three Months Ended January 31, 2024
United States $ 19,612 $ 19,822 $ 9,514 $ 176,424 $ 225,372 $ 25,223 $ 26,901 $ 10,700 $ 163,774 $ 226,598
Outside the United States:
United Kingdom — — — 69,000 69,000 — — — 50,390 50,390
Other 709 — 8,280 10,575 19,564 — 1,086 9,653 8,371 19,110

Total outside the United States 709 — 8,280 79,575 88,564 — 1,086 9,653 58,761 69,500

Total $ 20,321 $ 19,822 $ 17,794 $ 255,999 $ 313,936 $ 25,223 $ 27,987 $ 20,353 $ 222,535 $ 296,098
Revenues $ 25,223 $ 27,987 $ 20,353 $ 222,535 $ 296,098

(in thousands) Fintech National Retail Solutions net2phone Traditional Communications Total
Three Months Ended January 31, 2022
United States $ 14,166 $ 10,620 $ 7,157 $ 209,065 $ 241,008
Outside the United States:
United Kingdom — — — 77,337 77,337
Other 433 — 6,378 11,902 18,713
Total outside the United States 433 — 6,378 89,239 96,050
Total $ 14,599 $ 10,620 $ 13,535 $ 298,304 $ 337,058
(in thousands) National Retail Solutions Fintech net2phone Traditional Communications Total
Three Months Ended January 31, 2023
United States $ 19,822 $ 19,612 $ 9,514 $ 176,424 $ 225,372
Outside the United States:
United Kingdom — — — 69,000 69,000
Other — 709 8,280 10,575 19,564

Total outside the United States — 709 8,280 79,575 88,564

Total $ 19,822 $ 20,321 $ 17,794 $ 255,999 $ 313,936
Revenues $ 19,822 $ 20,321 $ 17,794 $ 255,999 $ 313,936

(in thousands) Fintech National Retail Solutions net2phone Traditional Communications Total
Six Months Ended January 31, 2023
United States $ 38,867 $ 39,135 $ 18,316 $ 361,262 $ 457,580
Outside the United States:
United Kingdom — — — 137,940 137,940
Other 1,341 — 16,428 22,463 40,232
Total outside the United States 1,341 — 16,428 160,403 178,172
Total $ 40,208 $ 39,135 $ 34,744 $ 521,665 $ 635,752
11

(in thousands) Fintech National Retail Solutions net2phone Traditional Communications Total
Six Months Ended January 31, 2022
United States $ 27,966 $ 20,692 $ 13,981 $ 445,992 $ 508,631
Outside the United States:
United Kingdom — — — 159,080 159,080
Other 863 — 12,467 26,100 39,430
Total outside the United States 863 — 12,467 185,180 198,510
Total $ 28,829 $ 20,692 $ 26,448 $ 631,172 $ 707,141
(in thousands) National Retail Solutions Fintech net2phone Traditional Communications Total
Six Months Ended January 31, 2024
United States $ 49,217 $ 52,734 $ 21,388 $ 326,842 $ 450,181
Outside the United States:
United Kingdom — — — 109,232 109,232
Other — 1,816 18,892 17,181 37,889

Total outside the United States — 1,816 18,892 126,413 147,121

Total $ 49,217 $ 54,550 $ 40,280 $ 453,255 $ 597,302
Revenues $ 49,217 $ 54,550 $ 40,280 $ 453,255 $ 597,302
(in thousands) National Retail Solutions Fintech net2phone Traditional Communications Total
Six Months Ended January 31, 2023
United States $ 39,135 $ 38,867 $ 18,316 $ 361,262 $ 457,580
Outside the United States:
United Kingdom — — — 137,940 137,940
Other — 1,341 16,428 22,463 40,232

Total outside the United States — 1,341 16,428 160,403 178,172

Total $ 39,135 $ 40,208 $ 34,744 $ 521,665 $ 635,752
Revenues $ 39,135 $ 40,208 $ 34,744 $ 521,665 $ 635,752

Remaining Performance Obligations

The ~~Company does not have any significant~~following table includes revenue by business segment expected to be recognized in the future from performance obligations ~~satisfied~~that were unsatisfied or partially ~~satisfied in previous reporting periods. The Company’s remaining performance obligations at~~unsatisfied as of January 31, ~~2023 and July 31, 2022 primarily~~2024. The table excludes contracts that had an original expected duration of one year or less.
Schedule of Estimated Revenue by Business Segment
(in thousands) National Retail Solutions net2phone Total
Twelve-month period ending January 31:
2025 $ 5,896 $ 38,854 $ 44,750
2026 4,940 18,769 23,709
Thereafter 4,838 6,213 11,051

Total $ 15,674 $ 63,836 $ 79,510

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. The Company would record a contract asset when revenue is recognized in advance of its right to bill and receive consideration. The Company has not currently 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 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”.

1112

The following table presents information about the Company’s contract liability balance:
Schedule of Information About Contract Liabilities

Three Months Ended
January 31,

Six Months Ended
January 31,

2023 2022 2023 2022
(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period $ 17,072 $ 20,152 $ 21,205 $ 24,378
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

2024 2023 2024 2023
(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period $ 15,803 $ 17,072 $ 19,605 $ 21,205

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 as an asset.~~recover. The Company’s incremental costs of obtaining a contract with a customer are sales commissions paid to employees and third parties on sales to end users. If the amortization period ~~would be~~were one year or less for the asset that would be recognized from deferring these costs, the Company applies the practical expedient whereby the Company charges these costs to expense when incurred. For net2phone sales, the Company defers these costs and amortizes them over the expected customer relationship period when it is expected to exceed one year.

The Company’s costs to fulfill its contracts do not meet the criteria to be recognized as an asset, therefore these costs are charged to expense as incurred.

The Company’s deferred customer contract acquisition costs were as follows:
Schedule of Deferred Customer Contract Acquisition Costs

January 31,
2023

July 31,
2022

January 31,
2024

July 31,
2023

(in thousands) (in thousands)
Deferred customer contract acquisition costs included in “Other current assets” $ 4,265 $ 4,085 $ 4,197 $ 4,460
Deferred customer contract acquisition costs included in “Other assets” 3,465 3,469 3,871 3,734

Total $ 7,730 $ 7,554 $ 8,068 $ 8,194

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:
Schedule of Amortization of Deferred Customer Contract Acquisition Costs

Three Months Ended
January 31,

Six Months Ended
January 31,

2023 2022 2023 2022
(in thousands)
Amortization of deferred customer contract acquisition costs $ 1,228 $ 1,030 $ 2,405 $ 2,042
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

2024 2023 2024 2023
(in thousands)
Amortization of deferred customer contract acquisition costs $ 1,194 $ 1,228 $ 2,409 $ 2,405

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from less than one year to ~~five~~six years. ~~net2phone 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 any of these options.

net2phone is the lessee under equipment leases that are classified as finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

The Company leases office and parking space in a building and parking garage located at 520 Broad Street, Newark, New Jersey that was previously owned by the Company’s former subsidiary, Rafael Holdings, Inc. (“Rafael”). On August 22, 2022, Rafael sold the building and parking garage to an unrelated third party. The Company’s lease in that building continues with the new owner. The Company leases office space in Israel from Rafael. Howard S. Jonas, the Chairman of the Company (an executive officer position) and the Chairman of the Company’s Board of Directors, is also the Chairman of the Board of Directors and Executive Chairman of Rafael. ~~The Newark lease expires in April 2025 and the Israel lease expires in July 2025.~~ ~~In the three and six months ended January 31, 2023, the Company incurred lease costs of $32,000~~ ~~and $0.2~~ million, respectively, in connection with the Rafael leases, which excludes Newark lease costs after August 22, 2022. In the three and six months ended January 31, 2022, the Company incurred lease costs of $~~0.5~~ ~~million and $0.9~~ ~~million, respectively, in connection with the Rafael leases. Lease costs incurred in connection with the Rafael leases is included in operating lease cost in the table below.~~
12
Supplemental disclosures related to the Company’s operating leases were as follows:
Schedule of Supplemental Disclosures Related to the Company's Operating Leases
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023 2022 2023 2022 2024 2023 2024 2023
(in thousands) (in thousands)
Operating lease cost $ 799 $ 687 $ 1,566 $ 1,387 $ 734 $ 799 $ 1,492 $ 1,566
Short-term lease cost 259 253 528 600 132 259 459 528

Total lease cost $ 1,058 $ 940 $ 2,094 $ 1,987 $ 866 $ 1,058 $ 1,951 $ 2,094

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 824 $ 670 $ 1,588 $ 1,365 $ 724 $ 824 $ 1,515 $ 1,588
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 824 670 1,588 1,365 724 824 1,515 1,588

13
Schedule of Supplemental Disclosures Related Weighted Average Operating Leases

January 31,
2023

July 31,
2022

January 31,
2024

July 31,
2023

Weighted-average remaining lease term-operating leases 2.7 years 2.8 years 2.6 years 2.3 years

Weighted-average discount rate-operating leases 3.6 % 3.0 % 4.3 % 3.7 %

In the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, the Company obtained right-of-use assets of $~~1.7~~0.9 million and $~~0.7~~1.7 million, respectively, in exchange for new operating lease liabilities.

The Company’s aggregate operating lease liability was as follows:
Schedule of Aggregate Operating Lease Liability

January 31,
2024

July 31,
2023

January 31,
2023

July 31,
2022
(in thousands)
Operating lease liabilities included in “Other current liabilities” $ 2,810 $ 2,861
Operating lease liabilities included in noncurrent liabilities 2,448 2,881
(in thousands)
Operating lease liabilities included in “Other current liabilities” $ 2,917 $ 2,899
Operating lease liabilities included in noncurrent liabilities 4,243 4,606
Total $ 7,160 $ 7,505 $ 5,258 $ 5,742

Future minimum maturities of operating lease liabilities were as ~~follows (in thousands):~~follows:
Schedule of Future Minimum Maturities of Operating Lease Liabilities

(in thousands)
Twelve-month period ending January 31:
2024 $ 3,135
2025 2,739 $ 2,988
2026 1,076 1,344
2027
454
636
2028
137
320
2029 183
Thereafter
—

152

Total lease payments 7,541 5,623
Less imputed interest (381 ) (365 )

Total operating lease liabilities $ 7,160 $ 5,258

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

January 31,
2023

July 31,
2022

January 31,
2024

July 31,
2023

(in thousands) (in thousands)
Cash and cash equivalents $ 117,811 $ 98,352 $ 141,081 $ 103,637
Restricted cash and cash equivalents 89,867 91,210 93,231 95,186

Total cash, cash equivalents, and restricted cash and cash equivalents $ 207,678 $ 189,562 $ 234,312 $ 198,823

At January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, restricted cash and cash equivalents included $~~87.7~~88.2 million and $~~86.6~~87.3 million, respectively, in restricted cash and cash equivalents for customer deposits held by IDT Financial Services. Certain of the electronic money financial services regulations in Gibraltar require IDT Financial Services to safeguard cash held for customer deposits, segregate cash held for customer deposits from any other cash that IDT Financial Services holds and utilize the cash only for the intended payment transaction.
1314

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 January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, “Cash and cash equivalents” in the Company’s consolidated balance sheets included an aggregate of $~~31.2~~39.8 million and $~~17.3~~20.6 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)
January 31, 2024:
Certificates of deposit* $ 960 $ — $ — $ 960
U.S. Treasury bills and notes 23,738 12 (76 ) 23,674
Government sponsored enterprise notes 3,261 1 (3 ) 3,259
Corporate bonds 3,901 1 (376 ) 3,526

Total $ 31,860 $ 14 $ (455 ) $ 31,419

July 31, 2023:
Certificates of deposit* $ 4,080 $ — $ (4 ) $ 4,076
U.S. Treasury bills and notes 31,186 — (148 ) 31,038
Government sponsored enterprise notes 3,881 — (8 ) 3,873
Corporate bonds 3,912 — (485 ) 3,427

Total $ 43,059 $ — $ (645 ) $ 42,414

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
(in thousands)
January 31, 2023:
U.S. Treasury bills and notes $ 23,854 $ 4 $ (94 ) $ 23,764
Government sponsored enterprises notes 2,512 — (4 ) 2,508
Corporate bonds 3,991 1 (487 ) 3,505
Total $ 30,357 $ 5 $ (585 ) $ 29,777

July 31, 2022:
Certificates of deposit* $ 2,000 $ — $ (14 ) $ 1,986
U.S. Treasury bills and notes 13,848 — (114 ) 13,734
Corporate bonds 3,966 1 (416 ) 3,551
Municipal bonds 3,035 — (3 ) 3,032
Total $ 22,849 $ 1 $ (547 ) $ 22,303
* 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.

The gross unrealized losses in the table above are recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. As of January 31, 2024, the Company determined that the unrealized losses were due to changes in interest rates or market liquidity and were not due to credit losses. In addition, as of January 31, 2024 and July 31, 2023, the Company did not intend to sell any of the securities with unrealized losses, 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.
Proceeds from maturities and sales of debt securities and redemptions of equity investments were $~~16.1~~14.2 million and $~~2.2~~16.1 million in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and $~~27.5~~31.2 million and $~~6.1~~27.5 million in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively. There were no realized gains or realized losses from sales of debt securities in the three and six months ended January 31, ~~2023~~2024 and ~~2022.~~2023. 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 31, ~~2023~~2024 were as follows:
Schedule of Contractual Maturities of Available-for-sale Debt Securities
Fair Value
(in thousands)
Within one year $ 23,087
After one year through five years 7,496
After five years through ten years 808
After ten years 28

Total $ 31,419

Fair Value
(in thousands)
Within one year $ 22,521
After one year through five years 5,973
After five years through ten years 1,236
After ten years
47

Total $
29,777

15
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)
January 31, 2023:
U.S. Treasury bills and notes $ 94 $ 11,315
Government sponsored enterprises notes 4 2,508
Corporate bonds 487 3,450
Total $ 585 $ 17,273

July 31, 2022:
Certificates of deposit $ 14 $ 1,986
U.S. Treasury bills and notes 114 13,734
Corporate bonds 416 3,514
Municipal bonds 3 2,412
Total $ 547 $ 21,646
14
Unrealized Losses Fair Value
(in thousands)
January 31, 2024:
Certificates of deposit $ — $ —
U.S. Treasury bills and notes 76 21,754
Government sponsored enterprise notes 3 2,910
Corporate bonds 376 3,384

Total $ 455 $ 28,048

July 31, 2023:
Certificates of deposit $ 4 $ 3,356
U.S. Treasury bills and notes 148 31,038
Government sponsored enterprise notes 8 3,873
Corporate bonds 485 3,368

Total $ 645 $ 41,635

The following available-for-sale debt securities included in the ~~tables~~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 Unrealized Losses Fair Value
(in thousands) (in thousands)
January 31, 2023:
January 31, 2024:
U.S. Treasury bills and notes $ 87 $ 874 $ 63 $ 2,837
Corporate bonds 475 3,286 376 3,384

Total $ 562 $ 4,160 $ 439 $ 6,221

July 31, 2022:
July 31, 2023:
U.S. Treasury bills and notes $ 72 $ 892 $ 86 $ 816
Corporate bonds 234 1,731 484 3,299

Total $ 306 $ 2,623 $ 570 $ 4,115

At January 31, 2023 and July 31, 2022, 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,
2023

July 31,
2022

January 31,
2024

July 31,
2023

(in thousands) (in thousands)
Zedge, Inc. Class B common stock, 42,282 shares at January 31, 2023 and July 31, 2022 $ 93 $ 117
Rafael Holdings, Inc. Class B common stock, 278,810 and 290,214 shares at January 31, 2023 and July 31, 2022, respectively 574 586
Zedge, Inc. Class B common stock, 42,282 shares at January 31, 2024 and July 31, 2023 $ 138 $ 89
Rafael Holdings, Inc. Class B common stock, 278,810 shares at January 31, 2024 and July 31, 2023 505 558
Other marketable equity securities 1,872 4,089 188 1,497
Fixed income mutual funds 6,674 12,299 4,245 4,054

Current equity investments $ 9,213 $ 17,091 $ 5,076 $ 6,198

Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”) $ 1,225 $ 1,132 $ 1,450 $ 1,263
Visa Inc. Series A Convertible Participating Preferred Stock (“Visa Series A Preferred”) — 1,230
Series B and Series C convertible preferred stock—equity method investment — 1,001
Convertible preferred stock—equity method investment 1,932 2,784
Hedge funds 3,137 3,238 2,951 3,002
Other 2,325 825 1,225 2,825

Noncurrent equity investments $ 6,687 $ 7,426 $ 7,558 $ 9,874

16
~~The Company received~~Howard S. Jonas, the ~~shares of Zedge, Inc. (“Zedge”) Class B common stock and~~ ~~28,320~~Chairman of the ~~shares of Rafael Class B common stock set forth in~~Company and the ~~table above in connection with the lapsing of restrictions on Zedge and Rafael restricted stock held by certain~~Chairman of the Company’s ~~employees and the Company’s payment~~Board of ~~taxes on behalf of its employees related thereto. The Company purchased~~ ~~261,894~~ ~~shares of Rafael Class B common stock in fiscal 2021. The Company sold~~ ~~11,404~~ ~~shares of Rafael Class B common stock in November 2022. Howard S. Jonas~~Directors, is also the Vice-Chairman of the Board of Directors of ~~Zedge.~~
~~On July 28, 2022, in connection with Visa~~Zedge, Inc.~~’s second mandatory release assessment, the Company received~~ 58 ~~shares of Visa Series A Preferred~~ and the ~~conversion adjustment for Visa Series C Preferred was reduced to~~ ~~3.645. In August 2022,~~Chairman of the 58 ~~shares~~Board of ~~Visa Series A Preferred were converted into~~ ~~5,800~~ ~~shares~~Directors and Executive Chairman of ~~Visa Class A common stock, which the Company sold for $1.3~~ ~~million.~~Rafael Holdings, Inc.

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
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022
2024 2023 2024 2023
(in thousands) (in thousands)
Balance, beginning of period $ 1,374 $ 2,397 $ 1,401 $ 2,743 $ 1,747 $ 1,474 $ 1,632 $ 1,501
Adjustment for observable transactions involving a similar investment from the same issuer 120 142
93
(204 ) 202 120 187 93
Upward adjustment — — 130 —
Redemption (230 ) — (230 ) —
Impairments — — — — — — — —

Balance, end of the period $ 1,494 $ 2,539 $ 1,494 $ 2,539 $ 1,719 $ 1,594 $ 1,719 $ 1,594

The Company increased the carrying value of the shares of Visa Series C Preferred it held ~~by $0.1~~ million in each of the three months ended January 31, 2023 and 2022 and in the six months ended January 31, 2023, and the Company decreased the carrying value of the shares of Visa Series C Preferred it held by $~~0.2~~ ~~million in the six months ended January 31, 2022,~~ based on the fair value of Visa Class A common stock, including a discount for lack of current ~~marketability.~~marketability, which is classified as “Adjustment for observable transactions involving a similar investment from the same issuer” in the table above. In addition, in connection with the acquisition of Regal Bancorp by SR Bancorp, the Company received cash of $0.2 million in December 2023 in exchange for its shares of Regal Bancorp common stock.

Unrealized gains ~~and losses~~(losses) for all equity investments measured at fair value included the following:
Schedule of Unrealized Gains (losses) Gains for All Equity Investments

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022

(in thousands)
Net losses recognized during the period on equity investments $ (228 ) $ (2,952 ) $ (2,169 ) $ (17,446 )
Less: net gains recognized during the period on equity investments sold during the period 22 25 18 10

Unrealized losses recognized during the period on equity investments still held at the reporting date $ (250 ) $ (2,977 ) $ (2,187 ) $ (17,456 )
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

2024 2023 2024 2023
(in thousands)
Net gains (losses) recognized during the period on equity investments $
715
$ (228 ) $ (202 ) $ (2,169 )
Less: net gains recognized during the period on equity investments sold during the period — 22 130 18

Unrealized gains (losses) recognized during the period on equity investments still held at the reporting date $ 715 $ (250 ) $ (332 ) $ (2,187 )

The unrealized gains and losses for all equity investments measured at fair value in the table above included the following:

2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023 2022 2023 2022 2024 2023 2024 2023
(in thousands) (in thousands)
Unrealized gains (losses) recognized during the period on equity investments:

Rafael Class B common stock $ 82 $ (993 ) $ 9 $ (13,486 ) $ 9 $ 82 $ (53 ) $ 9

Zedge Class B common stock $ 3 $ (168 ) $ (24 ) $ (330 ) $ 57 $ 3 $ 49 $ (24 )
Unrealized losses recognized during the period on equity investments still held at the reporting date $ (250 ) $ (2,977 ) $ (2,187 ) $ (17,456 ) $ 715 $ (250 ) $ (332 ) $ (2,187 )

Equity Method Investment
~~On February 2, 2021, the~~The Company ~~paid $4.0~~ ~~million to purchase~~has an investment in shares of ~~series B~~ convertible preferred stock of a communications company (the equity method investee, or “EMI”). As of January 31, 2024 and July 31, 2023, the Company’s ownership was 33.4% and 33.3%, ~~and on August 10, 2021, the Company paid $1.1~~ ~~million to purchase shares~~respectively, 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 the Company’s ownership to~~ ~~26.57% on an as 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.~~EMI but does not have a controlling interest.

The Company determined that on the dates of the acquisitions of the EMI’s shares, 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 of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to the Company’s interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. In the accompanying consolidated statements of income, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other income (expense), net” (see Note 17).

AsIn February 2024, each of ~~January 31, 2023 and July 31, 2022, the Company was the holder of secured promissory notes made by the EMI in exchange for loans of an aggregate of $3.7~~ ~~million and $2.5~~ ~~million, respectively. The notes provide for interest on the principal amount at~~ 15~~% per annum payable monthly. The notes were due and payable in~~ ~~February 2023. The Company, the EMI, and~~ the EMI’s ~~other lenders are in~~shareholders (including the ~~process of converting all the EMI’s equity and promissory notes into new~~Company) agreed to purchase additional shares of the EMI’s ~~participating~~convertible preferred stock. ~~As of January 31, 2023~~The Company paid $0.3 million in February 2024 and ~~July 31, 2022,~~is committed to pay $0.2 million in March 2024 to purchase the ~~notes were included in “Other current assets” in the accompanying consolidated balance sheets.~~additional shares.
1617
The following table summarizes the change in the balance of the Company’s equity method investment:

Summary of Changes in Equity Method Investments
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022
2024 2023 2024 2023
(in thousands) (in thousands)
Balance, beginning of period $ 349 $ 3,329 $ 1,001 $ 2,901 $ 2,444 $ 349 $ 2,784 $ 1,001
Purchase of convertible preferred stock — — — 1,051 336 — 1,009 —
Equity in the net loss of investee (542 ) (639 ) (1,012 ) (1,080 ) (506 ) (542 ) (1,176 ) (1,012 )
Amortization of equity method basis difference (181 ) (181 ) (363 ) (363 ) (342 ) (181 ) (685 ) (363 )

Balance, end of the period $ (374 ) $ 2,509 $ (374 ) $ 2,509 $ 1,932 $ (374 ) $ 1,932 $ (374 )

~~As of January 31, 2023, the balance of the Company’s investment in the EMI was included in “Other current liabilities” in the accompanying consolidated balance sheet.~~
Summarized financial information of the EMI was as follows:
Summary of Statements of Operations
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022
2024 2023 2024 2023
(in thousands) (in thousands)

Revenues $ 1,818 $ 1,380 $ 3,691 $ 3,071 $ 5,087 $ 1,818 $ 7,821 $ 3,691
Costs and expenses:
Direct cost of revenues 1,535 1,443 3,228 2,905 4,085 1,535 6,482 3,228
Selling, general and administrative 1,772 774 3,408 2,663 2,385 1,772 4,570 3,408

Total costs and expenses 3,307 2,217 6,636 5,568 6,470 3,307 11,052 6,636

Loss from operations (1,489 ) (837 ) (2,945 ) (2,497 ) (1,383 ) (1,489 ) (3,231 ) (2,945 )
Other expense (498 ) — (842 ) (1 )
Other expense, net
—
(498 )
—
(842 )

Net loss $ (1,987 ) $ (837 ) $ (3,787 ) $ (2,498 ) $ (1,383 ) $ (1,987 ) $ (3,231 ) $ (3,787 )

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
(in thousands)
January 31, 2024
Debt securities $ 23,674 $ 7,745 $ — $ 31,419
Equity investments included in current assets 5,076 — — 5,076
Equity investments included in noncurrent assets — 1,000 1,450 2,450

Total $ 28,750 $ 8,745 $ 1,450 $ 38,945

Acquisition consideration included in:
Other current liabilities $ — $ — $ (1,945 ) $ (1,945 )
Other noncurrent liabilities — — (2,572 ) (2,572 )

Total $ — $ — $ (4,517 ) $ (4,517 )

July 31, 2023
Debt securities $ 31,038 $ 11,376 $ — $ 42,414
Equity investments included in current assets 6,198 — — 6,198
Equity investments included in noncurrent assets — 2,500 1,263 3,763

Total $ 37,236 $ 13,876 $ 1,263 $ 52,375

Acquisition consideration included in:
Other current liabilities $ — $ — $ (2,032 ) $ (2,032 )
Other noncurrent liabilities — — (2,773 ) (2,773 )

Total $ — $ — $ (4,805 ) $ (4,805 )

Level 1 (1)

Level 2 (2)

Level 3 (3)

Total

(in thousands)
January 31, 2023
Debt securities $ 23,764 $ 6,013 $ — $ 29,777
Equity investments included in current assets 9,213 — — 9,213
Equity investments included in noncurrent assets — — 1,225 1,225

Total $ 32,977 $ 6,013 $ 1,225 $ 40,215

Acquisition consideration included in:
Other current liabilities $ — $ — $ (2,275 ) $ (2,275 )
Other noncurrent liabilities — — (4,334 ) (4,334 )

Total $ — $ — $ (6,609 ) $ (6,609 )

July 31, 2022
Debt securities $ 13,734 $ 8,569 $ — $ 22,303
Equity investments included in current assets 17,091 — — 17,091
Equity investments included in noncurrent assets — 1,230 1,132 2,362

Total $ 30,825 $ 9,799 $ 1,132 $ 41,756

Acquisition consideration included in:
Other current liabilities $ — $ — $ (2,578 ) $ (2,578 )
Other noncurrent liabilities — — (5,968 ) (5,968 )

Total $ — $ — $ (8,546 ) $ (8,546 )
(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

18
At both January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, the Company had $~~3.1~~3.0 million ~~and $3.2~~ ~~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)
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023 2022 2023 2022 2024 2023 2024 2023
(in thousands) (in thousands)
Balance, beginning of period $ 1,105 $ 2,119 $ 1,132 $ 2,465 $ 1,248 $ 1,105 $ 1,263 $ 1,132
Total gains (losses) recognized in “Other income (expense), net” 120 142
93
(204 )
Total gains included in “Other income (expense), net” 202 120 187 93

Balance, end of period $ 1,225 $ 2,261 $ 1,225 $ 2,261 $ 1,450 $ 1,225 $ 1,450 $ 1,225

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)
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022
2024 2023 2024 2023
(in thousands) (in thousands)
Balance, beginning of period $ 6,603 $ 1,015 $ 8,546 $ 1,025 $ 4,588 $ 6,603 $ 4,805 $ 8,546
Payments — — (375 ) — — — (214 ) (375 )
Total (gains) losses included in:
“Other operating gain (expense), net” — (303 ) (1,565 ) (303 )
“Foreign currency translation adjustment”
6
(9 ) 3 (19 )
“Other operating (expense) gain, net” (73 ) — (73 ) (1,565 )
“Foreign currency translation adjustment” 2 6 (1 ) 3

Balance, end of period $ 6,609 $ 703 $ 6,609 $ 703 $ 4,517 $ 6,609 $ 4,517 $ 6,609

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

In the six months ended January 31, 2024 and 2023, the Company paid an aggregate of $0.2 million and $0.4 million, inrespectively, for contingent consideration related to prior acquisitions. In addition, in January 2024, the ~~six months ended January 31, 2023,~~Company determined that the requirement for a contingent consideration payment related to an acquisition in a prior period would not be met, and, in September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the Leaf acquisition ~~of Leaf~~ would not be met, and, in the three months ended January 31, 2022, the Company determined that the requirements for a contingent consideration payment related to an acquisition in December 2019 would not be met before the expiration date.met. The Company ~~recorded~~recognized gains ~~of $1.6~~ ~~million and $0.3~~ ~~million~~ on the write-off of these contingent consideration payment obligations, which were included in “Other operating (expense) gain, ~~(expense),~~ net” in the accompanying consolidated statements of income. ~~There were no other changes in the estimated fair value of contingent consideration in the six months ended January 31, 2023 and 2022.~~

18
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, settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities. At January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, 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 settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities were classified as Level 2 of the fair value hierarchy.
19
Other assets and other liabilities. At January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, 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—Variable Interest Entity
The Company is the primary beneficiary of a ~~VIE~~variable interest entity (“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. 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 income.

The VIE’s net (loss) income ~~(loss)~~ and aggregate funding provided by (repaid to) ~~provided by~~ the Company were as follows:
Schedule of Net (Loss) Income and Aggregate Funding ~~Repaid~~ to the Company by VIE

2023

2022

2023

2022

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022

(in thousands)
Net income (loss) of the VIE $
25
$ (144 ) $ 165 $ —

Aggregate funding (repaid to) provided by the Company, net $ (10 ) $ (93 ) $ 87 $ (96 )
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

2024 2023 2024 2023
(in thousands)
Net (loss) income of the VIE $ (107 ) $ 25 $ (26 ) $ 165

Aggregate funding provided by (repaid to) the Company, net $ 123 $ (10 ) $ 237 $ 87

The VIE’s summarized consolidated balance sheet amounts are as follows:
VIE’s Summarized Consolidated Balance Sheet

January 31,2023

July 31,2022

(in thousands)
January 31,
2024

July 31,
2023

Assets:
(in thousands)
Assets:
Cash and equivalents $ 3,286 $ 1,808 $ 2,394 $ 1,596
Restricted cash 2,064 4,490 4,934 7,848
Trade accounts receivable, net 13 31 90 62
Disbursement prefunding 1,056 585
Prepaid expenses 179 14 323 197
Other current assets 1,038 1,387 255 317
Due from the Company — 86
Property, plant, and equipment, net 375 467 166 272
Other intangibles, net 813 889 661 737

Total assets $ 7,768 $ 9,172 $ 9,879 $ 11,614

Liabilities and noncontrolling interests:
Trade accounts payable $ — $ — $
11
$ —
Accrued expenses 25 20 334 70
Other current liabilities 3,990 5,559
Settlement liabilities 5,336 7,573
Due to the Company 1 — 263 26
Accumulated other comprehensive loss (15 ) (9 )
Accumulated other comprehensive income 37 21
Noncontrolling interests 3,767 3,602 3,898 3,924

Total liabilities and noncontrolling interests $ 7,768 $ 9,172 $ 9,879 $ 11,614

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.

20
Note 10—Other Operating (Expense) Gain, ~~(Expense),~~ Net
The following table summarizes the other operating (expense) gain, ~~(expense),~~ net by business segment:
Schedule of Other Operating ~~Expense,~~(Expense) Gain, Net

2023

2022

2023

2022
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022
2024 2023 2024 2023
(in thousands) (in thousands)
Corporate—Straight Path Communications Inc. class action legal fees $ (1,597 ) $ (2,694 ) $ (4,109 ) $ (3,671 ) $ (2,552 ) $ (1,597 ) $ (2,764 ) $ (4,109 )
Corporate—Straight Path Communications Inc. class action insurance claims 1,263 1,972 2,988 2,887 2,186 1,263 2,869 2,988
Corporate—other — — 12 —
Fintech—write-off of contingent consideration liability — — 1,565 — — — — 1,565
Fintech— government grants 349 — 382 — — 349 — 382
net2phone—write-off of contingent consideration liability — 303 — 303 73 — 73 —
net2phone—other — (10 ) — (10 )
Traditional Communications— cable telephony customer indemnification claim (1 ) (12 ) (12 ) (36 ) — (1 ) — (12 )
Traditional Communications—other 3 (1 ) 2 (3 ) (1 ) 3 — 2

Total other operating gain (expense), net $ 17 $ (442 ) $ 816 $ (530 )
Total other operating (expense) gain, net $ (294 ) $ 17 $ 190 $ 816

Straight Path Communications Inc. Class Action
As discussed in Note 16, the Company (as well as other defendants) ~~has been~~was named in a ~~pending~~ class action on behalf of the stockholders of the Company’s former subsidiary, Straight Path Communications Inc. (“Straight Path”). The Company incurred legal fees and recorded offsetting gains from insurance claims related to this action in the three and six months ended January 31, 2024 and 2023. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, and ~~2022.~~found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

Write-off of Contingent Consideration ~~Liabilities~~Liability
In January 2024, the ~~six months ended January 31, 2023,~~Company determined that the requirement for a contingent consideration payment related to an acquisition in a prior period would not be met. In addition, in September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the Leaf acquisition would not be met. In addition, in the three months ended January 31, 2022, the Company determined that the requirements for a contingent consideration payment related to an acquisition in December 2019 would not be met before the expiration date. The Company recognized gains on the write-off of these contingent consideration payment obligations in the net2phone and Fintech ~~and net2phone segments, respectively.~~segments.

Government Grants

In the three and six months ended January 31, 2023, Leaf received payments from government grants for the development and commercialization of blockchain-backed financial technologies.
Indemnification Claim
Beginning in June 2019, as part of a commercial resolution, the Company indemnified a cable telephony customer related to patent infringement claims brought against the customer. On May 8, 2023, the Company and the customer agreed to release the Company from the indemnification agreement in exchange for $3.9 million, which was recorded as an expense in the third quarter of fiscal 2023.

Note 11—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. As of July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, there were no amounts outstanding under this facility. In the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, IDT Telecom borrowed and repaid an aggregate of $~~2.4~~30.6 million and $~~2.5~~2.4 million, respectively, under the 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~~secured overnight financing rate published by the ~~Regulation D maximum reserve requirement~~Federal Reserve Bank of New York plus ~~125 to 175~~10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal ~~quarter.~~quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, ~~2024.~~2026. 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 January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, IDT Telecom was in compliance with all of the covenants.

21
Note 12—Equity
~~Stock Issued to Certain Executive Officers for Bonus Payments~~2024 Equity Incentive Plan

InOn December 13, 2023, the ~~six months ended January 31, 2023, certain executive~~Company’s stockholders approved the adoption of the Company’s 2024 Equity Incentive Plan (the “2024 Plan”), which is intended to provide incentives to officers, employees, directors, and consultants of the Company, ~~received performance bonuses for fiscal 2022 of an aggregate of $1.2~~ ~~million, of which one-half was paid in cash~~including stock options, stock appreciation rights, deferred stock units (“DSUs”), and ~~one-half was paid in~~restricted stock, from and after September 16, 2024. There are 250,000 shares of the Company’s Class B common ~~stock. The Company issued~~ ~~24,543~~ ~~shares of its Class B common~~ stock ~~with an issue date value of $0.6~~ ~~million~~reserved for the ~~bonus payments.~~grant of awards under the 2024 Plan.

2015 Stock Option and Incentive Plan

On December ~~14, 2022,~~13, 2023, the Company’s stockholders approved an amendment to the Company’s 2015 Stock Option and Incentive Plan (the “2015 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 ~~50,000~~250,000 shares. The 2015 Plan is scheduled to expire on September 16, 2024.

In both the six months ended January 31, 2024 and 2023, the Company received cash from the exercise of stock options of $0.2 million for which the Company issued 12,500 shares of its Class B common stock. ~~There were~~ no ~~stock option exercises in the six months ended January 31, 2022.~~

~~In the six months ended January 31, 2023, the Company granted~~ ~~15,000~~ ~~shares of its Class B common stock to an employee. The Company recorded stock-based compensation expense and an increase in “Additional paid-in capital” of $0.4~~ ~~million for this grant, which was the fair value of the shares on the grant date.~~
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. In the six months ended January 31, 2024, the Company repurchased 135,261 shares of its Class B common stock for an aggregate purchase price of $3.2 million. In the six months ended January 31, 2023, the Company repurchased 203,436 shares of its Class B common stock for an aggregate purchase price of $5.0 million. ~~There were no repurchases under the program in the six months ended January 31, 2022.~~ At January 31, ~~2023,~~2024, ~~5.0~~4.6 million shares remained available for repurchase under the stock repurchase program.

In the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, the Company paid $~~0.3~~15,000 ~~million~~ and $~~9.0~~0.3 million, respectively, to repurchase ~~13,403~~654 and ~~200,438~~13,403 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 ~~shares issued for bonus payments,~~ the vesting of ~~deferred stock units (“DSUs”), and~~DSUs, the lapsing of restrictions on restricted ~~stock.~~stock, and shares issued for bonus payments. Such shares were repurchased by the Company based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

Deferred Stock Units Equity Incentive Program

On November 30, 2022, the Company adopted an equity incentive program (under its 2015 ~~Stock Option and Incentive~~ Plan) in the form of grants of DSUs that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. ~~On December 5, 2022, the Company granted~~ ~~187,975~~ DSUs to certain of its executive officers and other employees. Subject to continued full time employment or other service to the Company, the DSUs are scheduled to vest in three equal amounts on each of May 17, 2023, February 21, 2024, and February 25, 2025. The number of shares that will be issuable on each vesting date will vary between 50% to 200% of the number of DSUs that vest on that vesting date, depending on the market price for the underlying Class B common stock on the vesting date relative to the base price approved by the Compensation Committee of the Company’s Board of Directors of $~~25.45~~$25.45 per share (which was based on the market price at the time of the ~~grant)~~initial grants under this program). ~~In addition, the grantee will have the right to elect a later vesting date no later than April 14, 2023 for the May 17, 2023 vesting date, and no later than January 19, 2024 for the~~On February 21, 2024, ~~vesting date. A grantee will have~~ the ~~option to elect a later~~second vesting date under the program, in accordance with the program and based on certain elections made by grantees, the Company issued 53,706shares of its Class B common stock for ~~one-half~~vested DSUs. Subject to continued full time employment or ~~all of~~other services to the ~~shares~~Company, the remaining 147,540DSUs are scheduled to vest on February 25, 2025, the ~~then upcoming~~third and final vesting date under the program.
Amended and ~~any~~Restated Employment Agreement with Abilio (“Bill”) Pereira
On December 21, 2023, the Company entered into an Amended and Restated Employment Agreement with Bill Pereira, the Company’s President and Chief Operating Officer. The agreement provides for, among other things, certain equity grants, including 23,500 DSUs that, ~~do not vest based on~~upon vesting, represent the ~~grantee’s election, will be eligible~~right to ~~vest on the subsequent scheduled vesting date. The Company estimated that the fair value of the DSUs on the date of grant was $5.1~~ million, which is being recognized on a graded vesting basis over the requisite service periods ending in February 2025. The Company used a risk neutral Monte Carlo simulation method in its valuation of the DSUs, which simulated the range of possible future valuesreceive shares of the Company’s Class B common stock, ~~over~~and 50,000 shares of Class B common stock of net2phone 2.0, as well as a contingent bonus subject to the ~~life~~completion of certain financial milestones as set forth in the agreement. The Company currently believes it is probable that some of the ~~DSUs.~~milestones will be satisfied, and some of the contingent bonus will be earned, for which the contingent bonus may be paid, at Mr. Pereira’s option, in either shares of the Company’s Class B common stock or cash. In the three and six months ended January 31, 2024, the Company recorded an aggregate stock-based compensation expense of $1.4 ~~The weighted average grant date fair value per DSU was $27.20~~.million related to these equity grants and the contingent bonus, which is included in “Selling, general and administrative expense” in the accompanying consolidated statements of income. At January 31, ~~2023,~~2024, there was an aggregate of $~~4.2~~0.4 million of total unrecognized compensation cost related to Mr. Pereira’s non-vested ~~DSUs.~~
DSUs, which is expected to be recognized over the remaining vesting period that ends in February 2025. Also at January 31, 2024, there was an aggregate of $2.0
~~The~~ million of total unrecognized compensation cost related to the probable portion of Mr. Pereira’s contingent bonus, which is expected to be recognized over the estimated period that the Company ~~had an existing equity incentive program~~expects the milestones to be satisfied, which ends in the ~~form~~first quarter of ~~DSUs~~fiscal 2025.
Exchange of NRS Shares for the Company’s Shares
In January 2024, three management employees of NRS exchanged shares of NRS’ Class B common stock that ~~upon vesting, entitled~~they held for shares of the ~~grantees to receive~~Company’s Class B common stock with an equal value. The NRS shares in the exchange represented an aggregate of 1.25% of NRS’ outstanding shares, which were exchanged for an aggregate of 192,433 shares of the Company’s Class B common stock. OnThe Company accounted for the exchange as an equity transaction and recorded a decrease in “Noncontrolling interests” and an increase in “Additional paid-in capital” of $0.1 million, based on the carrying amount of the 1.25% noncontrolling interest in NRS.
Restricted net2phone 2.0 Common Stock Repurchased from Employees
In January ~~5, 2022,~~2024, the ~~third~~restrictions lapsed on the 0.5 million restricted shares of net2phone 2.0 Class B common stock that were granted in December 2020 to each of Howard S. Jonas and ~~final vesting date under~~Shmuel Jonas, the ~~program, the Company issued~~Company’s Chief Executive Officer. In addition, in January 2024, Bill Pereira was granted ~~301,296~~50,000 shares of ~~its~~net2phone 2.0 Class B common stock in ~~respect~~connection with the agreement described above. The Company withheld a portion of ~~DSUs that vested~~these shares representing an aggregate of 4.5% of the outstanding shares of net2phone 2.0 with an aggregate fair value of $3.6 million to satisfy the grantees’ tax withholding obligations in connection with the lapsing of restrictions on ~~that date.~~restricted stock or the grant of shares. The fair value per share of the net2phone 2.0 Class B common stock was based on a valuation of the business enterprise using a market approach and income approach. The Company recorded an increase in “Noncontrolling interests” of $53,000 and a decrease in “Additional paid-in capital” of $3.61 million, and an offsetting income tax withholding liability of $3.6 million.

Subsequent Event—Dividend Payments
In March 2024, the Company’s Board of Directors initiated a quarterly cash dividend of $0.05 per share on the Company’s Class A and Class B common stock. The initial dividend will be paid on or about March 27, 2024 with a record date of March 19, 2024. The dividend will supplement the Company’s existing stock repurchase program.
Note 13—Redeemable Noncontrolling Interest
On September 29, 2021, NRS sold shares of its Class B common stock representing 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 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.

The shares of NRS’ Class B common stock sold to Alta Fox have been classified as mezzanine equity in the accompanying consolidated balance sheets because they may be redeemed at the option of Alta Fox, although the shares are not mandatorily redeemable. The carrying amount of the shares includes the noncontrolling interest in the net income of NRS. The net income attributable to the mezzanine equity’s noncontrolling interest during the periods were as follows:
Schedule of Net Income Attributable to Mezzanine Equity’s Noncontrolling Interest

2023

2022

2023

2022

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022

(in thousands)
Net income of NRS attributable to the mezzanine equity’s noncontrolling interest $ 65 $ 53 $ 198 $ 63
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

2024 2023 2024 2023
(in thousands)
Net income of NRS attributable to the mezzanine equity’s noncontrolling interest $ 114 $ 65 $ 221 $ 198

22
Note 14— 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 earnings 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 Earnings Per Share

2023

2022

2023

2022
2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022
2024 2023 2024 2023
(in thousands) (in thousands)
Basic weighted-average number of shares 25,510 25,652 25,556 25,609 25,175 25,510 25,176 25,556
Effect of dilutive securities:
Stock options 9 715 11 711 — 9 1 11
Non-vested restricted Class B common stock 19 175 10 260 142 19 120 10

Diluted weighted-average number of shares 25,538 26,542 25,577 26,580 25,317 25,538 25,297 25,577

There were no shares excluded from the calculation of diluted earnings per share in the three and six months ended January 31, ~~2023~~2024 and ~~2022.~~
2023.
22

Note 15—Accumulated Other Comprehensive Loss
The accumulated balances for each classification of other comprehensive ~~loss~~income (loss) were as follows:
Schedule of Accumulated Balances for Each Classification of Other Comprehensive ~~Loss~~Income Income (Loss)

Unrealized Loss on Available-for-Sale Securities

Foreign Currency Translation

Accumulated Other Comprehensive Loss

(in thousands)
Balance, July 31, 2022 $ (546 ) $ (10,759 ) $ (11,305 )
Other comprehensive loss attributable to IDT Corporation (34 ) (2,372 ) (2,406 )

Balance, January 31, 2023 $ (580 ) $ (13,131 ) $ (13,711 )

Unrealized
Loss on
Available-for-Sale Securities
Foreign
Currency
Translation Accumulated
Other
Comprehensive
Loss
(in thousands)
Balance, July 31, 2023 $           (645 ) $ (16,547 ) $ (17,192 )
Other comprehensive income (loss) attributable to IDT Corporation 204 (288 ) (84 )

Balance, January 31, 2024 $ (441 ) $ (16,835 ) $ (17,276 )

Note 16—Commitments and Contingencies
~~Coronavirus Disease (COVID-19)~~COVID-19

~~The~~In May 2023, the World Health Organization declared an end to COVID-19 as a public health emergency. As of the date of this Quarterly Report, the Company continues to monitor ~~and respond to~~ the ~~impacts~~situation. The Company cannot predict with certainty the potential impact of COVID-19 if it re-invigorates on the ~~COVID-19 pandemic on all aspects~~Company’s results of ~~its business, including its customers, employees, suppliers, vendors, and business partners.~~operations, financial condition, or cash flows.

Operationally, the Company’s employees transitioned to work-from-home during the third quarter of fiscal 2020. Beginning in the fourth quarter of fiscal 2021, certain of the Company’s employees returned to work in the Company’s offices on a hybrid basis. The Company’s salespeople, customer service employees, technicians, and delivery employees continue to serve its independent retailers, channel partners, and customers with minimal interruption.
~~COVID-19 had mixed financial impacts on the Company beginning in the third quarter of fiscal 2020 and continuing through the third quarter of fiscal 2022.~~
Legal Proceedings
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~~alleged 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,~~sought, 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. The trial was held in August and December 2022, and closing arguments were presented on May 3, 2023. On ~~September 24, 2017,~~October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, ~~filed a motion~~and found that, contrary to ~~dismiss~~ the ~~amended complaint, which was ultimately denied, and which denial was affirmed by~~plaintiffs’ allegations, the ~~Delaware Supreme Court. On February 17, 2022,~~class suffered no damages. The plaintiffs will have 30 days from entry of the ~~court denied the Company’s motion for summary judgment. On March 10, 2022, JDS1, LLC withdrew its application~~final order to serve as class representative and lead plaintiff. On May 16, 2022, the court denied The Arbitrage Fund’s motion to serve as class representative and lead plaintiff, and approved intervenor Ardell Howard’s motion to serve as class representative. The trial commenced on August 29, 2022 for a period of five days, followed by another five-day period in December 2022. The parties are in the midst of post-trial briefing. Closing statements are scheduled to take place in May 2023. The Company is vigorously defending this matter (see Note 10). At this stage, the Company is unable to estimate its potential liability, if any.file an appeal.

23
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.

23
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. 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, was audited by the Universal Service Administrative Company (“USAC”). The ~~Internal Audit Division of USAC issued preliminary audit findings and the Company, in accordance with~~ USAC’s ~~audit procedures, appealed certain of the findings. USAC issued a~~ final decision ~~and the final decision overturned one of the initial findings but left the remaining initial findings in place. The reversal will result in the elimination of a $1.8~~ ~~million charge by the Universal Service Fund. The final decision upheld the imposition of~~imposed a $2.9 million charge toon the Company for the Federal Telecommunications Relay Service (“TRS”) Fund. The Company ~~intends to appeal~~has appealed the USAC’s final decision to the FCC and does not intend to remit payment for the ~~Federal Telecommunications~~TRS Fund fees unless and until a negative decision on its appeal has been issued. ~~In response to the aforementioned preliminary audit findings, the~~The Company has made certain changes to its filing policies and procedures for years that remain potentially under audit. At January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, the Company’s accrued expenses included $~~31.4~~23.4 million and $~~33.2~~26.8 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 31, ~~2023,~~2024, the Company had purchase commitments of $~~5.9~~17.6 million primarily for 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 31, ~~2023,~~2024, the Company had aggregate performance bonds of $~~24.2~~29.0 million outstanding.

24
Note 17—Other Income (Expense), Net
Other income (expense), net consists of the following:
Schedule of Other ~~(Expense)~~ Income (Expense), Net

2023

2022

2023

2022

Three Months Ended
January 31,

Six Months Ended
January 31,

2023

2022

2023

2022

(in thousands)
Foreign currency transaction gains $ 2,480 $ 848 $ 1,451 $ 598
Equity in net loss of investee (723 ) (820 ) (1,375 ) (1,443 )
Losses on investments, net (228 ) (2,952 ) (2,169 ) (17,446 )
Other 84 (25 ) (136 ) (874 )

Total other income (expense), net $ 1,613 $ (2,949 ) $ (2,229 ) $ (19,165 )

2024 2023 2024 2023

Three Months Ended
January 31,

Six Months Ended
January 31,

2024 2023 2024 2023
(in thousands)
Foreign currency transaction gains (losses) $ 2,510 $ 2,480 $ (989 ) $ 1,451
Equity in net loss of investee (848 ) (723 ) (1,861 ) (1,375 )
Gains (losses) on investments, net
715
(228 ) (202 ) (2,169 )
Other 157 84 (1 ) (136 )

Total other income (expense), net $ 2,534 $ 1,613 $ (3,053 ) $ (2,229 )
Note 18—Income Taxes

AtAs of January 31, ~~2023,~~2024, the Company’s best estimate of the effective tax rate expected to be applicable for fiscal ~~2023~~2024 was ~~27.7%~~ 24.7% compared to ~~16.9%~~ 27.0% at July 31, ~~2022.~~2023. The ~~changes~~change in the estimated effective tax rate ~~were~~was mainly due to ~~stock-based compensation and~~ differences in the amount of taxable income earned in the various taxing jurisdictions.

Note 19—Recently Issued Accounting Standards Not Yet Adopted
In ~~June 2022,~~December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, primarily related to the rate reconciliation and income taxes paid disclosures as well as certain other amendments to income tax disclosures. Entities will be required on an annual basis to consistently categorize and provide greater disaggregation of rate reconciliation information and further disaggregate their income taxes paid. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2025. The amendments in this ASU should be applied on a prospective basis, although retrospective application is permitted. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60), Accounting ~~Standards Update~~for and Disclosure of Crypto Assets, that changes the accounting for crypto assets from a cost-less-impairment model to fair value, with changes recognized in net income each reporting period. The ASU also requires enhanced disclosures including, among other things, the name, cost basis, fair value, and number of units for each significant holding, and a rollforward of annual activity including additions, dispositions, gains, and losses. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2025. The ASU requires a cumulative-effect adjustment to the opening balance of retained earnings as of adoption. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“~~ASU”~~CODM”) and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2024 applied retrospectively to all prior periods presented. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.
In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions,that clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU also requires specific disclosures related to equity securities that are subject to contractual sales restrictions. The Company will adopt the amendments in this ASU prospectively on August 1, 2024. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.

~~In June 2016, the FASB issued 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 does not expect the new standard to have a material impact on its consolidated financial statements.
25
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, ~~2022,~~2023 (or the 2023 Form 10-K) 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~~2023 Form ~~10-K for the fiscal year ended July 31, 2022.~~10-K. 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~~2023 Form ~~10-K for the fiscal year ended July 31, 2022.~~10-K.

Recently Issued Accounting Standards Not Yet Adopted
In ~~June 2022,~~December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, primarily related to the rate reconciliation and income taxes paid disclosures as well as certain other amendments to income tax disclosures. Entities will be required on an annual basis to consistently categorize and provide greater disaggregation of rate reconciliation information and further disaggregate their income taxes paid. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2025. The amendments in this ASU should be applied on a prospective basis, although retrospective application is permitted. We are evaluating the impact that this ASU will have on our consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60), Accounting for and Disclosure of Crypto Assets, that changes the accounting for crypto assets from a cost-less-impairment model to fair value, with changes recognized in net income each reporting period. The ASU also requires enhanced disclosures including, among other things, the name, cost basis, fair value, and number of units for each significant holding, and a rollforward of annual activity including additions, dispositions, gains, and losses. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2025. The ASU requires a cumulative-effect adjustment to the opening balance of retained earnings as of adoption. We are evaluating the impact that this ASU will have on our consolidated financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker, or CODM, and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2024 applied retrospectively to all prior periods presented. We are evaluating the impact that this ASU will have on our consolidated financial statements.
In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, that clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU also requires specific disclosures related to equity securities that are subject to contractual sales restrictions. We will adopt the amendments in this ASU prospectively on August 1, 2024. We are evaluating the impact that this ASU will have on our consolidated financial statements.

26
~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments—Credit Losses (Topic 326)~~, ~~Measurement~~Results 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 do not expect the new standard to have a material impact on our consolidated financial statements.Operations

~~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~~As of January 31, 2024, we owned 94.0% of the ~~COVID-19 pandemic on all aspects~~outstanding shares of our ~~business, including our customers, employees, suppliers, vendors,~~subsidiary, net2phone 2.0, Inc., or net2phone 2.0, which owns and ~~business partners.~~
~~Operationally, our employees transitioned to work-from-home during~~operates the third quarter of fiscal 2020. Beginning in the fourth quarter of fiscal 2021, certain of our employees returned to work in our offices on a hybrid basis. Our salespeople, customer service employees, technicians,net2phone segment, and ~~delivery employees continue to serve our independent retailers, channel partners, and customers with minimal interruption.~~
25
COVID-19 has had mixed financial impacts on our businesses beginning in the third quarter of fiscal 2020 and continuing through the third quarter of fiscal 2022. It drove increases in demand for our consumer offerings, principally BOSS Money, BOSS Revolution Calling and Mobile Top-Up, through our digital channels beginning in the latter half of March 2020. Subsequently, digital transaction levels have continued to increase relative to retailer originated transactions. 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 of fiscal 2020. COVID-19-related demand slowed the rate of decline in BOSS Revolution Calling revenue that we had experienced in prior periods, however, that impact was less significant beginning in the first quarter of fiscal 2022 compared to the similar periods in fiscal 2021, and the surge in demand for voice calls that began with the onset81.2% of the ~~COVID-19 pandemic had eroded by the third quarter~~outstanding shares of ~~fiscal 2022.~~ National Retail Solutions, or NRS, ~~was immaterially impacted by~~and, on a fully diluted basis assuming all 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 were typically more accessiblevesting criteria related 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. IDT Global’s revenue, which hadvarious rights granted have 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 conferencingmet and other ~~collaboration platforms.~~assumptions, we would own 90.8% of net2phone 2.0 and 78.9% of NRS.

~~At the onset~~From and after August 1, 2023, we include depreciation and amortization in “Direct cost of ~~the COVID-19 pandemic, the transition from offices~~revenues” and “Selling, general and administrative” expense. Prior to August 1, 2023, depreciation and amortization was a more flexible workforce increased the demand for net2phone’s offerings. Customers transitioned from their on-premises phone system to net2phone’s cloud solution, ported their phone numbers, and quickly set-up their employees to work remotely. In April 2020, the release of Huddle, net2phone’s integrated video conferencing solution, significantly improved net2phone’s functionality for remote work, which also increased the demand for its services. COVID-19 had mixed financial impacts on net2phone’s business beginningseparate caption in the ~~third quarter~~consolidated statements of ~~fiscal 2020. Its customer base growth slowed somewhat~~income. In addition, from and after August 1, 2023, we are reporting gross profit and gross margin percentage in our “Results of Operations” in accordance with accounting principles generally accepted in the ~~second half~~United States of ~~fiscal 2020 in certain Latin American markets due to decreased levels~~America, or U.S. GAAP. Depreciation and amortization expense of ~~economic activity in those markets. However, Latin American sales rebounded~~$5.0 million in the ~~first quarter~~three months ended January 31, 2023 was reclassified to conform to the current year’s presentation as follows: $1.1 million was reclassified to “Direct cost of ~~fiscal 2021~~revenues” and ~~sales have remained strong~~$3.9 million was reclassified to “Selling, general and administrative” expense, and depreciation and amortization expense of $9.8 million in ~~its United States~~the six months ended January 31, 2023 was reclassified to conform to the current year’s presentation as follows: $2.1 million was reclassified to “Direct cost of revenues” and ~~Canadian markets.~~$7.7 million was reclassified to “Selling, general and administrative” expense. Depreciation and amortization expense included in our business segments was as follows:
(in millions) National Retail Solutions Fintech net2phone Traditional Communications Corporate Total
Three Months Ended January 31, 2024
Depreciation and amortization:
Included in “Direct cost of revenues” $ 0.5 $ — $ 0.6 $          0.2 $     — $ 1.3
Included in “Selling, general and administrative expense” 0.3 0.7 1.0 1.8 — 3.8

Three Months Ended January 31, 2023
Depreciation and amortization:
Included in “Direct cost of revenues” $ 0.4 $ — $ 0.5 $ 0.2 $ — $ 1.1
Included in “Selling, general and administrative expense” 0.2 0.6 0.9 2.2 — 3.9

Six Months Ended January 31, 2024
Depreciation and amortization:
Included in “Direct cost of revenues” $ 0.9 $ 0.1 $ 1.2 $ 0.4 $ — $ 2.6
Included in “Selling, general and administrative expense” 0.6 1.3 1.8 3.8 0.1 7.6

Six Months Ended January 31, 2023
Depreciation and amortization:
Included in “Direct cost of revenues” $ 0.7 $ — $ 1.0 $ 0.4 $ — $ 2.1
Included in “Selling, general and administrative expense” 0.4 1.3 1.7 4.3 — 7.7
COVID-19

In May 2023, the World Health Organization declared an end to COVID-19 as a public health emergency. As of the date of this Quarterly Report, ~~including~~we continue to monitor 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 31, 2023 will be sufficient to meet our anticipated working capital and capital expenditure requirements during the twelve-month period ending January 31, 2024. However, the situation remains fluid and wesituation. We cannot predict with certainty the potential impact of COVID-19 if it re-invigorates on our ~~business,~~ results of operations, financial condition, ~~and~~or cash flows.

Explanation of Performance Metrics
Our results of operations discussion include the following performance metrics:

● for NRS, active ~~point of sale,~~point-of-sale, or POS, terminals, payment processing accounts, and recurring revenue,
● for net2phone, seats and subscription revenue, and
● for Traditional Communications, minutes of use.

NRS uses two key 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.~~have not been fully installed by the end of the month. Payment processing accounts are NRS PAY accounts that can generate revenue. It excludes accounts that have been approved but not activated. NRS’ recurring revenue is NRS’ revenue in accordance with U.S. GAAP, excluding its revenue from POS terminal sales.

27
net2phone’s cloud communications offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. net2phone’s subscription revenue is its revenue in accordance with U.S. GAAP excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil.

The trends and comparisons between periods for the number of active POS terminals, NRS PAY accounts, seats served, recurring revenue, and subscription revenue are used in the analysis of NRS’ or net2phone’s revenues and direct cost of revenues and are strong indications of the top-line growth and performance of the business.

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 IDT Global’s 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 and Six Months Ended January 31, ~~2023~~2024 Compared to Three and Six Months Ended January 31, ~~2022~~2023
As of August 1, 2022, we revised our reportable business segments primarily to reflect the growth of our financial technology businesses and their increased contributions to our consolidated results. Our four reportable business segments, Fintech, NRS, net2phone, and Traditional Communications, reflect management’s current approach to analyzing results, its resource allocation strategy, and its assessment of business performance. NRS was previously included in our Fintech segment. In addition, certain lines of business were reclassified to the Fintech segment from the Traditional Communications segment. Comparative segment information has been reclassified and restated in all periods to conform to the current period presentation.
26

~~Fintech~~National Retail Solutions Segment

~~Fintech,~~NRS, which represented ~~6.5%~~8.5% and ~~4.3%~~6.3% of our total revenues in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and ~~6.3%~~8.2% and ~~4.1%~~6.2% of our total revenues in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, is ~~comprised~~an operator of ~~BOSS Money,~~ a ~~provider of international money remittance~~nationwide POS network providing independent retailers with store management software, electronic payment processing, and ~~related value/payment transfer services, as well as~~ other ~~significantly smaller financial services businesses, including Leaf Global Fintech Corporation, or Leaf, a provider of~~ancillary merchant services. NRS’ POS platform provides marketers with digital ~~wallet services in emerging markets, our variable interest entity, or VIE, that operates money transfer businesses,~~out-of-home advertising and ~~IDT Financial Services Limited, or IDT Financial Services, our Gibraltar-based bank.~~transaction data.
Three months ended January 31, Change Six months ended January 31, Change

2023

2022

$

%

2023

2022

$

%

(in millions)
Revenues:
BOSS Money $ 17.6 $ 12.0 $ 5.6 46.7 % $ 35.2 $ 24.1 $ 11.1 45.9 %
Other 2.7 2.6 0.1 4.0 5.0 4.7 0.3 6.4

Total revenues 20.3 14.6 5.7 39.2 40.2 28.8 11.4 39.5
Direct cost of revenues (8.0 ) (6.1 ) 1.9 30.7 (16.3 ) (12.1 ) 4.2 34.9
Selling, general and administrative (12.8 ) (10.2 ) 2.6 25.7 (23.9 ) (19.5 ) 4.4 22.4
Depreciation and amortization (0.6 ) (0.6 ) — 23.3 (1.2 ) (1.0 ) 0.2 22.7
Severance — — — — — (0.1 ) (0.1 ) (100.0 )
Other operating gain 0.3 — (0.3 ) nm 1.9 — (1.9 ) nm

(Loss) income from operations $ (0.8 ) $ (2.3 ) $ 1.5 64.5 % $ 0.7 $ (3.9 ) $ 4.6 (118.2 )%
Three months ended
January 31, Change Six months ended January 31, Change
2024 2023 $/# % 2024 2023 $/# %
(in millions)
Revenues:
Recurring $     23.9 $ 18.3 $ 5.6 30.4 % $ 46.3 $ 36.2 $ 10.1 27.9 %
Other 1.3 1.5 (0.2 ) (11.3 ) 2.9 2.9
—
(0.5 )

Total revenues 25.2 19.8 5.4 27.2 49.2 39.1 10.1 25.8
Direct cost of revenues (2.6 ) (2.6 ) — 2.1 (5.7 ) (4.8 ) 0.9 17.6

Gross profit 22.6 17.2 5.4 31.0 43.5 34.3 9.2 26.9
Selling, general and administrative (17.3 ) (11.8 ) 5.5 45.3 (32.7 ) (23.7 ) 9.0 38.1

Income from operations $ 5.3 $ 5.4 $ (0.1 ) (0.5 )% $ 10.8 $ 10.6 $ 0.2 1.9 %

Gross margin percentage 89.5 % 87.0 % 2.5 % 88.4 % 87.5 % 0.9 %

~~nm—not meaningful~~

January 31,
Change
2024 2023 # %
(in thousands)
Active POS terminals 28.7 22.4 6.3 28 %
Payment processing accounts 18.2 12.5 5.7 45 %

Revenues. Revenues ~~from BOSS Money~~ increased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 driven primarily because of increased transaction volume in BOSS Money’s direct-to-consumer digital and retail channels in the three and six months ended January 31, 2023 compared to the similar periods in fiscal 2022. The increase included unusually favorable economics on certain high-volume African corridors that dissipated late in the three months ended January 31, 2023,by revenue growth from NRS’ merchant services, as well as the ~~development and introduction of new platform functionalities enabling more flexible and granular pricing strategies. BOSS Money continues to benefit from the continued~~ expansion of ~~its disbursement networks, particularly in Africa and the Caribbean.~~NRS’ POS network.

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 primarily due to the increase in the direct costs of NRS’ POS terminal sales.
Selling, General and Administrative. Selling, general and administrative expense increased in the three and six months ended January 31, 2024 compared to the similar periods in fiscal 2023 primarily due to increases in sales commissions and employee compensation. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense increased to 68.3% from 59.9% in the three months ended January 31, 2024 and 2023, respectively, and increased to 66.4% from 60.4% in the six months ended January 31, 2024 and 2023, respectively.
28
Fintech Segment
Fintech, which represented 9.4% and 6.5% of our total revenues in the three months ended January 31, 2024 and 2023, respectively, and 9.1% and 6.3% of our total revenues in the six months ended January 31, 2024 and 2023, respectively, is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; and (ii) other, significantly smaller, financial services businesses, including Leaf Global Fintech Corporation, or Leaf, a provider of digital wallet services in emerging markets, a variable interest entity, or VIE, that operates money transfer businesses, and IDT Financial Services Limited, or IDT Financial Services, our Gibraltar-based bank.
Three months ended
January 31, Change
Six months ended
January 31,
Change
2024 2023 $/# % 2024 2023 $/# %
(in millions)
Revenues:
BOSS Money $     25.0 $ 17.6 $ 7.4 41.9 % $ 49.3 $ 35.2 $ 14.1 40.0 %
Other 3.0 2.7 0.3 10.3 5.3 5.0 0.3 5.3

Total revenues 28.0 20.3 7.7 37.7 54.6 40.2 14.4 35.7
Direct cost of revenues (11.9 ) (8.0 ) 3.9 47.8 (23.6 ) (16.3 ) 7.3 44.4

Gross profit 16.1 12.3 3.8 31.1 31.0 23.9 7.1 29.7
Selling, general and administrative (16.8 ) (13.4 ) 3.4 25.3 (33.1 ) (25.1 ) 8.0 31.7
Other operating gain — 0.3 (0.3 ) (100.0 ) — 1.9 (1.9 ) (100.0 )

(Loss) income from operations $ (0.7 ) $ (0.8 ) $ 0.1 8.6 % $ (2.1 ) $ 0.7 $ (2.8 ) (400.5 )%

Gross margin percentage 57.5 % 60.4 % (2.9 )% 56.7 % 59.3 % (2.6 )%
Revenues. Revenues from BOSS Money increased in the three and six months ended January 31, 2024 compared to the similar periods in fiscal 2023 primarily because of increased transaction volume in BOSS Money’s retail and digital channels. BOSS Money continues to benefit from cross-marketing to BOSS Revolution Calling customers, the expansion of its retail agent network, and ongoing efforts to enhance user-experience within the BOSS Money and BOSS Calling apps.
Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, 2024 compared to the similar periods in fiscal 2023 primarily due to an increase BOSS Money’s direct cost of revenues, ~~in BOSS Money’s direct-to-consumer digital and retail channels,~~ which reflected the increase in BOSS Money’s revenue.

Selling, General and Administrative. Selling, general and administrative expense increased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 primarily due to increases in debit and credit card processing charges, employee compensation, ~~stock-based compensation expense,~~ and ~~sales commissions.~~bank fees. The increase in card processing charges was the result of increased credit and debit card transactions through our BOSS Money app and other digital channels. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense decreased to ~~63.0%~~60.1% from ~~69.7%~~66.1% in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and decreased to ~~59.4%~~60.6% from ~~67.6%~~62.4% in the six months ended January 31, 2024 and 2023, ~~and 2022,~~ respectively.
~~Depreciation and Amortization.~~ Depreciation and amortization expense increased in the three and six months ended January 31, 2023 compared to the similar periods in fiscal 2022 primarily due to increased depreciation of capitalized costs of consultants and employees developing internal use software.

Other Operating Gain. In the three and six months ended January 31, 2023, Leaf received payments of $0.3 million and $0.4 million, respectively, from government grants for the development and commercialization of blockchain-backed financial technologies. In addition, in the six months ended January 31, 2023, we determined that the requirements for a portion of the contingent consideration payments related to the Leaf acquisition would not be met. We recognized a gain of $1.6 million on the write-off of this contingent consideration payment obligation.

29
net2phone Segment

~~National Retail Solutions Segment~~
~~NRS,~~The net2phone segment, which represented ~~6.3%~~6.9% and ~~3.2%~~5.7% of our total revenues in the three months ended January 31, 2024 and 2023, respectively, 6.8% and ~~2022, respectively, and 6.2% and 2.9%~~5.5% of our total revenues in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, is ~~an operator~~comprised of ~~a nationwide POS network providing independent retailers with store management software with credit, debit,~~net2phone’s cloud communications and ~~other electronic payment processing, as well as with other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.~~contact center offerings.

Three months ended
January 31, Change Six months ended
January 31, Change
2024 2023 $/# % 2024 2023 $/# %
(in millions)
Revenues:
Subscription $     19.3 $ 16.3 $ 3.0 18.5 % $ 37.8 $ 31.8 $ 6.0 18.8 %
Other 1.1 1.5 (0.4 ) (30.7 ) 2.5 2.9 (0.4 ) (15.0 )

Total revenues 20.4 17.8 2.6 14.4 40.3 34.7 5.6 15.9
Direct cost of revenues (4.0 ) (3.6 ) 0.4 10.4 (7.7 ) (6.9 ) 0.8 12.0

Gross profit 16.4 14.2 2.2 15.4 32.6 27.8 4.8 16.9
Selling, general and administrative (16.1 ) (14.8 ) 1.3 8.9 (32.3 ) (29.4 ) 2.9 9.5
Other operating gain 0.1 — 0.1 nm 0.1 — 0.1 nm

Income (loss) from operations $ 0.4 $ (0.6 ) $ 1.0 163.8 % $ 0.4 $ (1.6 ) $ 2.0 122.1 %

Gross margin percentage 80.7 % 80.0 % 0.7 % 80.8 % 80.1 % 0.7 %
Three months ended January 31, Change Six months ended January 31, Change
2023 2022 $ % 2023 2022 $ %
(in millions)
Revenues:
Recurring $ 18.3 $ 9.0 $ 9.3 103.1 % $ 36.2 $ 17.6 $ 18.6 105.1 %
Other 1.5 1.6 (0.1 ) (6.6 ) 2.9 3.1 (0.2 ) (2.8 )

Total revenues 19.8 10.6 9.2 86.6 39.1 20.7 18.4 89.1
Direct cost of revenues (2.2 ) (1.3 ) 0.9 25.0 (4.2 ) (2.7 ) 1.5 54.8
Selling, general and administrative (11.6 ) (7.1 ) 4.5 64.1 (23.2 ) (14.3 ) 8.9 63.4
Depreciation and amortization (0.6 ) (0.1 ) 0.5 224.0 (1.1 ) (0.3 ) 0.8 211.9

Income from operations $ 5.4 $ 2.1 $ 3.3 161.1 % $ 10.6 $ 3.4 $ 7.2 211.4 %
nm—not meaningful
January 31, Change
2023 2022 # %

(in thousands)
Active POS terminals 22.4 16.5 5.9 35 %
Payment processing accounts 12.5 8.0 4.5 55 %
January 31, Change
2024 2023 # %
(in thousands)
Seats served 375 327 48 15 %

Revenues. ~~Revenues~~net2phone’s revenues increased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 driven primarily by the growth in subscription revenue ~~growth from NRS’ digital out-of-home advertising~~in the U.S. and ~~payment processing services, as well as~~Latin American markets, which reflected the ~~expansion of NRS’ POS network.~~increase in seats served at January 31, 2024 compared to January 31, 2023.

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022 primarily due to increases in the direct costs of NRS’ POS terminal sales.~~
~~Selling, General and Administrative~~~~. Selling, general and administrative expense increased in the three and six months ended January 31,~~ 2023 compared to the similar periods in fiscal 2022 primarily due to increases in sales commissions, as well as increases in employee compensation. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense decreased to 58.7% from 66.7% in the three months ended January 31, 2023 and 2022, respectively, and decreased to 59.4% from 68.8% in the six months ended January 31, 2023 and 2022, respectively.
~~Depreciation and Amortization.~~ Depreciation and amortization expense increased in the three and six months ended January 31, 2023 compared to the similar periods in fiscal 2022 primarily due to increased depreciation of capitalized costs of consultants and employees developing internal use software.
~~net2phone Segment~~
The net2phone segment, which represented 5.7% and 4.0% of our total revenues in the three months ended January 31, 2023 and 2022, respectively, and 5.5% and 3.7% of our total revenues in the six months ended January 31, 2023 and 2022, respectively, is comprised of net2phone’s cloud communications offerings.
Three months ended January 31, Change Six months ended January 31, Change
2023 2022 $ % 2023 2022 $ %
(in millions)
Revenues:
Subscription $ 16.3 $ 12.5 $ 3.8 30.3 % $ 31.8 $ 24.2 $ 7.6 31.4 %
Other 1.5 1.0 0.5 45.4 2.9 2.2 0.7 30.9

Total revenues 17.8 13.5 4.3 31.5 34.7 26.4 8.3 31.4
Direct cost of revenues (3.0 ) (2.4 ) 0.6 26.7 (5.8 ) (4.8 ) 1.0 20.8
Selling, general and administrative (14.0 ) (13.0 ) 1.0 6.9 (27.8 ) (26.4 ) 1.4 5.3
Depreciation and amortization (1.4 ) (1.3 ) 0.1 10.4 (2.7 ) (2.6 ) 0.1 6.0
Other operating gain, net — 0.3 (0.3 ) (100.0 ) — 0.3 (0.3 ) (100.0 )

Loss from operations $ (0.6 ) $ (2.9 ) $ 2.3 79.9 % $ (1.6 ) $ (7.1 ) $ 5.5 76.9 %
January 31, Change
2023 2022 # %

(in thousands)
Seats served 327 258 69 27 %
~~Revenues.~~ net2phone’s revenues increased in the three and six months ended January 31, 2023 compared to the similar periods in fiscal 2022 driven primarily by the growth in subscription revenue in the U.S. market. The increase in seats served at January 31, 2023 compared to January 31, 2022 was led by growth in net2phone’s Latin American markets, and included approximately 9,000 seats from net2phone’s contact center as a service business.
~~Direct Cost of Revenues~~~~. Direct cost of revenues increased in the three and six months ended January 31, 2023 compared to the similar periods in fiscal 2022~~ primarily due to the increase in revenues, with the largest ~~increases~~increase in the U.S. ~~market.~~markets. net2phone’s 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 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 primarily due to increases in employee compensation, sales commissions, ~~partially offset by decreases in employee compensation.~~and consulting expense. As a percentage of net2phone’s revenues, net2phone’s selling, general and administrative ~~expenses~~expense decreased to ~~78.4%~~79.2% from ~~96.4%~~83.2% in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and decreased to ~~79.9%~~80.1% from ~~99.6%~~84.8% in the six months ended January 31, 2024 and 2023, ~~and 2022,~~ respectively.

net2phone derives a significant portion of its revenues from existing customers. Attracting new customers usually involves additional costs compared to retention of existing customers. If existing customers’ subscriptions and related usage decrease or are terminated, net2phone will need to spend more money to acquire new customers and still may not be able to maintain its existing level of revenues or profitability. In addition, net2phone needs to acquire new customers to increase its revenues. net2phone incurs significant sales and marketing expenses to acquire new customers. It is therefore expected that selling, general and administrative ~~expenses~~expense will remain a significant percentage of net2phone’s revenues for the foreseeable future.
~~Depreciation and Amortization.~~Other Operating Gain. ~~The increase in depreciation and amortization expense in~~In the three and six months ended January 31, 2023 compared to the similar periods in fiscal 2022 was due to increased depreciation of net2phone’s telephone equipment leased to customers and increased depreciation of capitalized costs of consultants and employees developing internal use software.
~~Other Operating Gain, net.~~ ~~In the three months ended January 31, 2022,~~2024, we determined that the ~~requirements~~requirement for a contingent consideration payment related to an acquisition in ~~December 2019~~a prior period would not be ~~met before the expiration date. net2phone~~met. We recognized a gain of ~~$0.3~~$0.1 million ~~in the three months ended January 31, 2022~~ on the write-off of this contingent consideration payment obligation.

29
Traditional Communications Segment
The Traditional Communications segment, which represented ~~81.5%~~75.2% and ~~88.5%~~81.5% of our total revenues in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and ~~82.0%~~75.9% and ~~89.3%~~82.0% of our total revenues in the six months ended January 31, 2024 and 2023, ~~and 2022,~~ respectively, ~~includes Mobile Top-Up,~~includes: (i) IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile ~~accounts,~~accounts; (ii) BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States and ~~Canada,~~Canada; and (iii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Traditional Communications’ most significant revenue streams are from ~~Mobile Top-Up,~~IDT Digital Payments, BOSS Revolution Calling, and IDT Global. ~~Mobile Top-Up~~IDT Digital Payments and BOSS Revolution Calling are sold ~~direct-to-consumers~~directly to consumers and through distributors and retailers. We receive payments for BOSS Revolution Calling, traditional calling cards, and ~~Mobile Top-Up~~IDT Digital Payments 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
2023 2022 $/# %
2023
2022 $/# %
(in millions)
Revenues:
Mobile Top-Up $ 106.1 $ 116.2 $ (10.1 ) (8.7 )% $ 215.2 $ 244.7 $ (29.5 ) (12.1 )%
BOSS Revolution Calling 82.9 100.0 (17.1 ) (17.1 ) 169.1 205.9 (36.8 ) (17.9 )
IDT Global 58.6 73.1 (14.5 ) (19.8 ) 120.2 162.3 (42.1 ) (25.9 )
Other 8.4 9.0 (0.6 ) (6.5 ) 17.2 18.3 (1.1 ) (5.7 )

Total revenues 256.0 298.3 (42.3 ) (14.2 ) 521.7 631.2 (109.5 ) (17.3 )
Direct cost of revenues (209.1 ) (247.5 ) (38.4 ) (15.5 ) (427.7 ) (529.3 ) (101.6 ) (19.2 )
Selling, general and administrative (27.3 ) (28.5 ) (1.2 ) (4.2 ) (54.7 ) (56.8 ) (2.1 ) (3.6 )
Depreciation and amortization (2.4 ) (2.4 ) — (1.3 ) (4.7 ) (4.9 ) (0.2 ) (2.9 )
Severance (0.2 ) — 0.2 nm (0.3 ) — 0.3 nm

Income from operations $ 17.0 $ 19.9 $ (2.9 ) (14.5 )% $ 34.3 $ 40.2 $ (5.9 ) (14.8 )%

Minutes of use:
BOSS Revolution Calling 591 758 (167 ) (22.0 )% 1,217 1,562 (345 ) (22.1 )%
IDT Global 1,605 1,958 (353 ) (18.0 ) 3,311 4,018 (707 ) (17.6 )

30

Three months ended
January 31,
Change
Six months ended
January 31,
Change
2024 2023 $/# % 2024 2023 $/# %
(in millions)
Revenues:
IDT Digital Payments $ 99.6 $ 106.1 $ (6.5 ) (6.1 )% $ 199.6 $ 215.2 $ (15.6 ) (7.2 )%
BOSS Revolution Calling 66.7 82.9 (16.2 ) (19.5 ) 137.9 169.1 (31.2 ) (18.4 )
IDT Global 48.7 58.6 (9.9 ) (16.9 ) 100.8 120.2 (19.4 ) (16.2 )
Other 7.5 8.4 (0.9 ) (11.2 ) 15.0 17.2 (2.2 ) (12.9 )
Total revenues 222.5 256.0 (33.5 ) (13.1 ) 453.3 521.7 (68.4 ) (13.1 )
Direct cost of revenues (180.2 ) (209.3 ) (29.1 ) (13.9 ) (368.4 ) (428.1 ) (59.7 ) (13.9 )
Gross profit 42.3 46.7 (4.4 ) (9.4 ) 84.9 93.6 (8.7 ) (9.4 )
Selling, general and administrative (27.3 ) (29.5 ) (2.2 ) (7.3 ) (54.0 ) (59.0 ) (5.0 ) (8.6 )
Severance (0.4 ) (0.2 ) 0.2 62.1 (0.9 ) (0.3 ) 0.6 177.3
Income from operations $ 14.6 $ 17.0 $ (2.4 ) (14.0 )% $ 30.0 $ 34.3 $ (4.3 ) (12.4 )%

Gross margin percentage 19.0 % 18.2 % 0.8 % 18.7 % 17.9 % 0.8 %

Minutes of use:
BOSS Revolution Calling 457 591 (134 ) (22.8 )% 953 1,217 (264 ) (21.7 )%
IDT Global 1,395 1,616 (221 ) (13.7 ) 2,839 3,322 (483 ) (14.5 )
~~nm—not meaningful~~
Revenues. Revenues from ~~Mobile Top-Up~~IDT Digital Payments decreased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 primarily from the deterioration of a key international corridor that was particularly impactful to revenues in the ~~business-to-business~~ wholesale ~~and retail channels, partially offset by an increase in direct-to-consumer channel revenue.~~channel.

Revenues and minutes of use from BOSS Revolution Calling decreased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022.~~2023. 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 of use from IDT Global decreased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 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 IDT Global 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 decreased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 primarily due to the decreases in ~~IDT Global, Mobile Top-Up,~~minutes of use and ~~BOSS Revolution Calling’s direct cost of revenues in the three and six months ended January 31, 2023 compared to the similar periods in fiscal 2022, mostly due to the decrease in~~ revenues.

Selling, General and Administrative. Selling, general and administrative expense decreased in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 primarily due to decreases in employee compensation, sales commissions, marketing expense, and debit and credit card processing charges, ~~employee compensation, and sales commissions,~~ partially offset by increases in ~~marketing expense and~~ stock-based ~~compensation expense.~~compensation. As a percentage of Traditional Communications’ revenue, Traditional Communications’ selling, general and administrative expense increased to ~~10.7%~~12.3% from ~~9.6%~~11.5% in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and increased to ~~10.5%~~11.9% from ~~9.0%~~11.3% in the six months ended January 31, 2024 and 2023, ~~and 2022,~~ respectively.
30
~~Depreciation and Amortization.~~ Severance Expense.~~Depreciation and amortization expense was substantially unchanged in~~ In the three months ended January 31, 2024 and 2023, ~~compared to the similar period in fiscal 2022. Depreciation~~Traditional Communications incurred severance expense of $0.4 million and ~~amortization expense decreased~~$0.2 million, respectively, and in the six months ended January 31, 2024 and 2023, ~~compared to the similar period in fiscal 2022 primarily due to decreases in depreciation as more~~Traditional Communications incurred severance expense of ~~our property, plant,~~$0.9 million and equipment became fully depreciated, partially offset by increases in depreciation of equipment added to our telecommunications network and capitalized costs of consultants and employees developing internal use software.$0.3 million, respectively.
31
Corporate
Three months ended
January 31, Change Six months ended
January 31, Change
2024 2023 $ % 2024 2023 $ %
(in millions)
General and administrative $         (3.2 ) $ (2.5 ) $ 0.7 29.3 % $ (6.0 ) $ (4.4 ) $ 1.6 35.8 %
Other operating (expense) gain, net (0.4 ) (0.3 ) 0.1 9.7 0.1 (1.1 ) (1.2 ) (110.4 )
Loss from operations $ (3.6 ) $ (2.8 ) $ (0.8 ) (26.9 )% $ (5.9 ) $ (5.5 ) $ (0.4 ) (6.3 )%

Three months ended January 31, Change Six months ended January 31, Change
2023 2022 $ % 2023 2022 $ %
(in millions)
General and administrative $ (2.5 ) $ (2.3 ) $ 0.2 9.1 % $ (4.4 ) $ (4.3 ) $ 0.1 2.3 %
Other operating expense, net (0.3 ) (0.7 ) (0.4 ) (53.7 ) (1.1 ) (0.8 ) 0.3 43.0
Loss from operations $ (2.8 ) $ (3.0 ) $ (0.2 ) (6.1 )% $ (5.5 ) $ (5.1 ) $ 0.4 8.4 %
Corporate costs mainly 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, 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 increased in the three and six months ended January 31, ~~2023~~2024 compared to the similar ~~period~~periods in fiscal ~~2022~~2023 primarily because of increases in audit and accounting fees and employee compensation, stock-based compensation expense, and consulting fees. Corporate general and administrative expense increased in the six months ended January 31, 2023 compared to the similar period in fiscal 2022 primarily because of an increase in consulting fees.compensation. As a percentage of our consolidated revenues, Corporate general and administrative expense was ~~0.8%~~1.1% and ~~0.7%~~0.8% in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and ~~0.7%~~1.0% and ~~0.6%~~0.7% in the six months ended January 31, 2024 and 2023, ~~and 2022,~~ respectively.

Other Operating ~~Expense,~~(Expense) Gain, net. As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) ~~have been~~were named in a ~~pending~~ class action on behalf of the stockholders of our former subsidiary, Straight Path Communications Inc., or Straight Path. We incurred legal fees of ~~$1.6~~$2.6 million and ~~$2.7~~$1.6 million in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and ~~$4.1~~$2.8 million and ~~$3.7~~$4.1 million in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, related to this action. Also, we recorded offsetting gains from insurance claims for this matter of ~~$1.3~~$2.2 million and ~~$2.0~~$1.3 million in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and ~~$3.0~~$2.9 million and ~~$2.9~~$3.0 million in the six months ended January 31, 2024 and 2023, respectively. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and ~~2022, respectively.~~found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.
Consolidated
The following is a discussion of ~~certain of~~ our consolidated ~~expenses,~~stock-based compensation expense, and our consolidated income and expense line items below income from operations.

~~Related Party Lease Costs.~~ We lease office and parking space in a building and parking garage located at 520 Broad Street, Newark, New Jersey that was previously owned by our former subsidiary, Rafael Holdings, Inc., or Rafael. On August 22, 2022, Rafael sold the building and parking garage to an unrelated third party. Our lease in that building continues with the new owner. We lease office space in Israel from Rafael. The Newark lease expires in April 2025 and the Israel lease expires in July 2025. In the three and six months ended January 31, 2023, we incurred lease costs of $32,000 and $0.2 million, respectively, in connection with the Rafael leases, which excludes Newark lease costs after August 22, 2022. In the three and six months ended January 31, 2022, we incurred lease costs of $0.5 million and $0.9 million, respectively, in connection with the Rafael leases. Lease costs incurred in connection with the Rafael leases 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~~expense was ~~$1.3~~$2.5 million and ~~$0.3~~$1.3 million in the three months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, and ~~$1.9~~$3.3 million and ~~$0.6~~$1.9 million in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively. The increases in stock-based compensation expense were primarily due to certain equity grants to Bill Pereira, our President and Chief Operating Officer, in the ~~grant of~~three months ended January 31, 2024, including deferred stock units, or DSUs, that, upon vesting, ~~will entitle~~represent the ~~grantees~~right to receive shares of our Class B common ~~stock. On December 5, 2022, we granted 187,975 DSUs to certain~~stock, and shares of our executive officers and other employees. Subject to continued full time employment or other service to us, the DSUs are scheduled to vest in three equal amounts on each of May 17, 2023, February 21, 2024, and February 25, 2025. The number of shares that will be issuable on each vesting date will vary between 50% to 200% of the number of DSUs that vest on that vesting date, depending on the market price for the underlying Class B common stock ~~on the vesting date relative~~of net2phone 2.0, as well as a contingent bonus subject to the ~~price approved by the Compensation Committee~~completion of ~~our Board of Directors of $25.45 per share (which was based on the market price~~certain financial milestones that may be paid, at ~~the time~~Mr. Pereira’s option, in either shares of the ~~grant). In addition,~~Company’s Class B common stock or cash.
At January 31, 2024, there was an aggregate of $2.0 million of total unrecognized compensation cost related to Mr. Pereira’s contingent bonus, which is expected to be recognized over the ~~grantee will have~~estimated period that we expect the ~~right~~milestones to ~~elect a later vesting date no later than April 14, 2023 for~~be satisfied, which ends in the ~~May 17, 2023 vesting date, and no later than~~first quarter of fiscal 2025.
At January ~~19,~~31, 2024, ~~for the February 21, 2024 vesting date. A grantee will have the option~~there was $1.5 million of total unrecognized compensation cost related to ~~elect a later vesting date for one-half or all of the shares scheduled to vest~~non-vested DSUs under our equity incentive program adopted on the then upcoming vesting date and any DSUs that do not vest based on the grantee’s election, will be eligible to vest on the subsequent scheduled vesting date. We estimated that the fair value of the DSUs on the date of grant was $5.1 million,November 30, 2022, which is being recognized on a graded vesting basis over the requisite service periods ~~ending~~that end in February 2025. ~~We used a risk neutral Monte Carlo simulation method~~On February 21, 2024, the second vesting date under the program, in ~~our valuation of~~accordance with the ~~DSUs, which simulated the range of possible future values~~program and based on certain elections made by grantees, we issued 53,706 shares of our Class B common stock ~~over~~for vested DSUs. Subject to continued full time employment or other services to us, the ~~life of the DSUs. The weighted average grant date fair value per DSU was $27.20. At January 31, 2023, there was $4.2 million of total unrecognized compensation cost related~~remaining 147,540 DSUs are scheduled to ~~non-vested DSUs.~~vest on February 25, 2025.

Effective as of June 30, 2022, restricted shares of NRS’ Class B common stock were granted to certain NRS employees. The restrictions on the shares will lapse in three installments on each of June 1, 2024, 2026, and 2027. The estimated fair value of the restricted shares on the grant date was $3.3 million, which ~~will be~~is being recognized over the vesting period. At January 31, ~~2023,~~2024, unrecognized compensation cost related to NRS’ non-vested Class B common stock was an aggregate of ~~$2.9~~$2.3 million. The unrecognized compensation cost is expected to be recognized over the remaining vesting ~~periods~~period that ~~end~~ends in fiscal 2027.

31
Three months ended
January 31, Change
Six months ended
January 31,
Change
2024 2023 $ % 2024 2023 $ %
(in millions)
Income from operations $ 16.0 $ 18.2 $ (2.2 ) (11.9 )% $ 33.2 $ 38.4 $ (5.2 ) (13.6 )%
Interest income, net 1.2 0.8 0.4 47.5 2.0 1.3 0.7 54.5
Other income (expense), net 2.5 1.6 0.9 57.1 (3.1 ) (2.2 ) (0.9 ) (37.0 )
Provision for income taxes (4.0 ) (5.3 ) 1.3 24.6 (7.9 ) (9.6 ) 1.7 17.6
Net income 15.7 15.3 0.4 2.9 24.2 27.9 (3.7 ) (13.0 )
Net income attributable to noncontrolling interests (1.3 ) (0.7 ) (0.6 ) (93.7 ) (2.1 ) (2.3 ) 0.2 4.2
Net income attributable to IDT Corporation $ 14.4 $ 14.6 $ (0.2 ) (1.4 )% $ 22.1 $ 25.6 $ (3.5 ) (13.8 )%

Three months ended January 31, Change Six months ended January 31, Change
2023 2022 $ % 2023 2022 $ %
(in millions)
Income from operations $ 18.2 $ 13.8 $ 4.4 31.6 % $ 38.4 $ 27.6 $ 10.8 39.2 %
Interest income, net 0.8 0.1 0.7 580.7 1.3 0.1 1.2 900.0
Other income (expense), net 1.6 (2.9 ) 4.5 154.7 (2.2 ) (19.2 ) 17.0 88.4
Provision for income taxes (5.3 ) (2.7 ) (2.6 ) (93.7 ) (9.6 ) (2.6 ) (7.0 ) (263.8 )

Net income 15.3 8.3 7.0 85.6 27.9 5.9 22.0 371.4
Net (income) attributable to noncontrolling interests (0.7 ) (0.8 ) 0.1 10.1 (2.3 ) (0.9 ) (1.4 ) (149.9 )

Net income attributable to IDT Corporation $ 14.6 $ 7.5 $ 7.1 95.3 % $ 25.6 $ 5.0 $ 20.6 411.0 %
32

Other Income (Expense), net. Other income (expense), net consists of the following:
Three months ended January 31, Six months ended January 31,
2023 2022 2023 2022
(in millions)
Foreign currency transaction gains $ 2.5 $ 0.8 $ 1.5 $ 0.6
Equity in the net loss of investee (0.7 ) (0.8 ) (1.4 ) (1.4 )
Losses on investments, net (0.2 ) (2.9 ) (2.2 ) (17.5 )
Other — — (0.1 ) (0.9 )
Total other income (expense), net $ 1.6 $ (2.9 ) $ (2.2 ) $ (19.2 )

Three months ended
January 31,

Six months ended
January 31,

2024 2023 2024 2023
(in millions)
Foreign currency transaction gains (losses) $ 2.5 $ 2.5 $ (1.0 ) $ 1.5
Equity in the net loss of investee (0.8 ) (0.7 ) (1.9 ) (1.4 )
Gains (losses) on investments, net 0.7 (0.2 ) (0.2 ) (2.2 )
Other 0.1 — — (0.1 )

Total $ 2.5 $ 1.6 $ (3.1 ) $ (2.2 )

We have an investment in ~~series B and series C~~shares of convertible preferred stock of a communications company (the equity method investee, or EMI). As of January 31, 2024 and 2023, our ownership was 33.4% and 26.57%, ~~that represents 26.57%~~respectively, of the EMI’s outstanding shares ~~of the EMI~~ 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 but do not have a controlling interest. We determined that on the dates of the acquisitions of the EMI’s shares, there were differences between our investment in the EMI and our proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to our interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. “Equity in the net loss of investee” includes the amortization of equity method basis difference.

The losses on investments, net in the three months ended January 31, 2023 and 2022 included unrealized gains (losses) of $0.1 million and $(1.0) million, respectively, on shares of Rafael’s Class B common stock. The losses on investments, net in the six months ended January 31, 2023 and 2022 included unrealized gains (losses) of $9,000 and $(13.5) million, respectively, on shares of Rafael’s Class B common stock.
Provision for Income Taxes. The ~~increase~~change in income tax expense in the three and six months ended January 31, ~~2023~~2024 compared to the similar periods in fiscal ~~2022~~2023 was primarily due to differences in the amount of taxable income earned in the various taxing jurisdictions.
Net Income Attributable to Noncontrolling Interests. The change in the net income attributable to noncontrolling interests in the three months ended January 31, ~~2023~~2024 compared to the similar period in fiscal ~~2022~~2023 was primarily due to ~~a decline~~changes in amounts attributable to the ~~net income of certain subsidiaries, partially offset by increases~~noncontrolling interests in ~~the net income of~~ NRS, ~~as well as a reductions in the net loss of~~ net2phone 2.0, ~~Inc., which owns~~ and ~~operates our net2phone segment.~~Sochitel UK Ltd. The change in the net income attributable to noncontrolling interests in the six months ended January 31, ~~2023~~2024 compared to the similar period in fiscal ~~2022~~2023 was primarily due to ~~increases~~changes in amounts attributable to the ~~net income of NRS as well as a reductions~~noncontrolling interests in ~~the net loss of~~ net2phone 2.0 ~~Inc.,~~and the VIE, partially offset by ~~a decline~~the change in the ~~net income of certain other subsidiaries.~~amounts attributable to the noncontrolling interests in NRS.

Liquidity and Capital Resources

As of the date of this Quarterly Report, ~~including the impact of COVID-19,~~ we expect our cash flow from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on January 31, ~~2023~~2024 will be sufficient to meet our currently anticipated working capital and capital expenditure requirements during the twelve-month period ending January 31, ~~2024.~~2025.

At January 31, ~~2023,~~2024, we had cash, cash equivalents, debt securities, and current equity investments of ~~$156.8~~$177.6 million and working capital (current assets in excess of current liabilities) of ~~$85.6~~$122.5 million.
32

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 31, ~~2023,~~2024, “Cash and cash equivalents” in our consolidated balance sheet included an aggregate of ~~$31.2~~$39.8 million held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC that was unavailable for other purposes.

Contractual Obligations and Commitments
The following table includes our anticipated material cash requirements from contractual obligations and other commitments at January 31, ~~2023:~~2024:

Payments Due by Period
(in millions)
Total Less than 1 year
1–3 years
4–5 years After 5 years Total
Less than
1 year
1–3 years 4–5 years After 5 years
Purchase commitments $ 5.9 $ 5.9 $ — $ — $ — $ 17.6 $ 17.6 $ — $ — $ —
Connectivity obligations under service agreements 0.7 0.5 0.2 — — 1.0 0.9 0.1 — —
Operating leases including short-term leases 8.1 3.5 4.0 0.6 — 6.7 3.8 2.2 0.5 0.2

Total (1) $ 14.7 $ 9.9 $ 4.2 $ 0.6 $ — $ 25.3 $ 22.3 $ 2.3 $ 0.5 $ 0.2

(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 ~~$24.2~~$29.0 million in performance bonds, and up to ~~$11.1~~$7.9 million for other potential payments including contingent consideration related to business acquisitions, due to the uncertainty of the amount and/or timing of any such payments.

33
Consolidated Financial Condition

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

2023 2022 2024 2023
(in millions) (in millions)
Cash flows provided by (used in):
Operating activities $ 35.6 $ 11.7 $ 39.7 $ 35.6
Investing activities (11.2 ) (14.9 ) 1.9 (11.2 )
Financing activities (7.1 ) 1.8 (3.0 ) (7.1 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents 0.8 (5.0 ) (3.1 ) 0.8

Increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents $ 18.1 $ (6.4 )
Increase in cash, cash equivalents, and restricted cash and cash equivalents $ 35.5 $ 18.1

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 ~~decreased~~increased to ~~$53.9~~$43.7 million at January 31, ~~2023~~2024 from ~~$70.2~~$37.7 million at July 31, ~~2022~~2023 primarily due to amounts ~~collected~~billed in the six months ended January 31, ~~2023~~2024 that were greater than ~~billings~~collections during the ~~period.~~period, partially offset by changes in foreign currency exchange rates.
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 ~~$35.0~~$33.8 million at January 31, ~~2023~~2024 from ~~$36.5~~$35.3 million at July 31, ~~2022~~2023 primarily due to decreases in the BOSS Revolution Calling and ~~Mobile Top-Up~~IDT Digital Payments deferred revenue balances.
Customer deposit liabilities at IDT Financial Services increased to ~~$86.9~~$87.6 million at January 31, ~~2023~~2024 from ~~$85.8~~$86.5 million at July 31, ~~2022.~~2023. Our restricted cash and cash equivalents included ~~$87.7~~$88.2 million and ~~$86.6~~$87.3 million at January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, respectively, held by ~~IDT Financial Services.~~the bank.
In September 2017, we and certain of our subsidiaries were certified by the New Jersey Economic Development Authority, or NJEDA, as having met the requirements of the Grow New Jersey Assistance Act Tax Credit Program. The program provides for credits against a corporation’s New Jersey corporate business tax liability for maintaining a minimum number of employees in New Jersey, and that tax credits may be sold subject to certain conditions. On June 5, 2023, we received a 2019 tax credit certificate for $1.8 million from the NJEDA. In August 2023, we sold the certificate for cash of $1.6 million.
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. 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.
33

As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) ~~have been~~were named in a ~~pending~~ class action on behalf of the stockholders of our former subsidiary, Straight Path. ~~We are vigorously defending this matter. At this stage, we are unable to estimate our potential liability, if any. In addition, in connection with our spin-off~~On October 3, 2023, the Court of ~~Straight Path in July 2013, we~~Chancery of the State of Delaware dismissed all claims against us, and ~~Straight Path entered into various agreements prior~~found that, contrary to the ~~spin-off including a Separation and Distribution Agreement to effect~~plaintiffs’ allegations, 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 failureclass suffered no damages. The plaintiffs will have 30 days from entry of the ~~other~~final order 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.file an appeal.

Investing Activities
Our capital expenditures were ~~$10.6~~$8.9 million and ~~$9.0~~$10.6 million in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively. We currently anticipate that total capital expenditures in the twelve-month period ending January 31, ~~2024~~2025 will be ~~$20~~$21 million to ~~$22~~$23 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 August 10, 2021, we paid $1.1 million~~As of July 27, 2023, the EMI’s shareholders including us agreed 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 purchases increased our ownership~~We subscribed to purchase additional shares for an aggregate of $1.0 million. In the six months ended January 31, 2024, we paid $1.0 million to purchase the EMI’s shares. In February 2024, each of the EMI’s ~~outstanding~~shareholders agreed to purchase additional shares of the EMI’s convertible preferred stock. We paid $0.3 million in February 2024 and we are committed to ~~26.57% from 23.95% on an as converted basis.~~pay $0.2 million in March 2024 to purchase the additional shares.

34
In January 2024, we acquired certain software and intellectual property for an online ordering platform for $0.1 million.
Purchases of debt securities and equity investments were ~~$28.1~~$19.4 million and ~~$10.8~~$28.1 million in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively. Proceeds from maturities and sales of debt securities and redemptions of equity investments were ~~$27.5~~$31.2 million and ~~$6.1~~$27.5 million in the six months ended January 31, 2024 and 2023, ~~and 2022,~~ respectively.
Financing Activities
We distributed cash of ~~$0.2~~$0.1 million and $0.2 million in the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, respectively, to the noncontrolling interests in certain of our subsidiaries.

In the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, we received proceeds from financing-related other liabilities of ~~$0.3~~$0.1 million and ~~$2.3~~$0.3 million, respectively.

In the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, we repaid financing-related other liabilities of ~~$2.0 million~~$15,000 and ~~$1.3~~$2.0 million, respectively.

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. As of July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, there were no amounts outstanding under this facility. In the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, IDT Telecom borrowed and repaid an aggregate of ~~$2.4~~$30.6 million and ~~$2.5~~$2.4 million, respectively, under the 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~~secured overnight financing rate published by the ~~Regulation D maximum reserve requirement~~Federal Reserve Bank of New York plus ~~125 to 175~~10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal ~~quarter.~~quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, ~~2024.~~2026. 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 January 31, ~~2023,~~2024, IDT Telecom was in compliance with all of the covenants.
On September 29, 2021, NRS sold shares of its Class B common stock representing 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.
34

In both the six months ended January 31, 2024 and 2023, we received cash from the exercise of stock options of $0.2 million for which we issued 12,500 shares of our Class B common stock. ~~There were no stock option exercises in the six months ended January 31, 2022.~~
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. In the six months ended January 31, 2024, we repurchased 135,261 shares of Class B common stock for an aggregate purchase price of $3.2 million. In the six months ended January 31, 2023, we repurchased 203,436 shares of Class B common stock for an aggregate purchase price of $5.0 million. ~~There were no repurchases under the program in the six months ended January 31, 2022.~~ At January 31, ~~2023, 5.0~~2024, 4.6 million shares remained available for repurchase under the stock repurchase program.
In the six months ended January 31, ~~2023~~2024 and ~~2022,~~2023, we paid ~~$0.3 million~~$15,000 and ~~$9.0~~$0.3 million, respectively, to repurchase ~~13,403~~654 and ~~200,438~~13,403 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 ~~shares issued for bonus payments,~~ the vesting of DSUs, ~~and~~the lapsing of restrictions on restricted ~~stock.~~stock, and shares issued for bonus payments. Such shares were repurchased by us based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.
In January 2024, the restrictions lapsed on the 0.5 million restricted shares of net2phone 2.0 Class B common stock that were granted in December 2020 to each of Howard S. Jonas and Shmuel Jonas, our Chief Executive Officer. In addition, in January 2024, Bill Pereira was granted 50,000 shares of net2phone 2.0 Class B common stock. We withheld a portion of these shares representing an aggregate of 4.5% of the outstanding shares of net2phone 2.0 with an aggregate fair value of $3.6 million to satisfy the grantees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock or the grant of shares.
In January 2024, we exchanged an aggregate of 192,433 shares of our Class B common stock with a value of $6.3 million for shares of NRS’ Class B common stock that were held by management employees of NRS representing an aggregate of 1.25% of NRS’ outstanding shares.
In March 2024, our Board of Directors initiated a quarterly cash dividend of $0.05 per share on our Class A and Class B common stock. The initial dividend will be paid on or about March 27, 2024 with a record date of March 19, 2024. The dividend will supplement our existing stock repurchase program.
Other Sources and Uses of Resources
We are considering spin-offs 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. There is no assurance ~~at this time~~ that any of these transactions will be completed.
We intend to, where appropriate, make 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~~We cannot guarantee that we will be presented with acquisition opportunities that meet our return-on-investment criteria, or that our efforts to make acquisitions that meet our criteria will be successful.
35

Item 3. Quantitative and Qualitative Disclosures About Market Risks
Foreign Currency Risk

Revenues from our international operations were 23% and 28% of our consolidated revenues in ~~each of~~ the three months ended January 31, 2024 and 2023, respectively, and 25% and 28% of our consolidated revenues in the six months ended January 31, 2024 and 2023, ~~and 2022. Therefore, a~~respectively. A significant portion of our 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.

Investment Risk

We hold a portion of our assets in debt and equity securities, including hedge funds, for strategic and speculative purposes. At January 31, ~~2023~~2024 and July 31, ~~2022,~~2023, the value of our debt and equity security holdings was an aggregate of ~~$45.7~~$44.1 million and ~~$46.8~~$58.5 million, respectively, which represented 9%8% and 11% of our total assets at ~~both dates.~~January 31, 2024 and July 31, 2023, respectively. 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 31, ~~2023.~~2024.
Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the fiscal quarter ended January 31, ~~2023~~2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3536
PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Legal proceedings in which we are involved are described in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report.

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~~the 2023 Form ~~10-K for the fiscal year ended July 31, 2022.~~10-K.

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 quarter of fiscal ~~2023:~~2024:

~~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, 2022~~ — $ — — ~~5,010,317~~
~~December 1-31, 2022~~ — $ — — ~~5,010,317~~
~~January 1–31, 2023~~ — $ — — ~~5,010,317~~
~~Total~~ — $ — —

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, 2023 — $ — — 4,576,737
December 1–31, 2023 — $ — — 4,576,737
January 1–31, 2024 9,791 $ 32.49 9,791 4,566,946

Total 9,791 $ 32.49 9,791

(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.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None
Item 6.Exhibits

Exhibit
Number
Description
31.1*
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* Inline XBRL Taxonomy Extension Schema Document
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* Inline 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.

3637
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 ~~13, 2023~~11, 2024 By: /s/ SHMUEL JONAS
Shmuel Jonas
Chief Executive Officer

March ~~13, 2023~~11, 2024 By: /s/ MARCELO FISCHER
Marcelo Fischer
Chief Financial Officer

3738

(in thousands)	Fintech			National Retail Solutions		net2phone			Traditional Communications		Corporate			Total
Three Months Ended January 31, 2023
Revenues	$	20,321		$	19,822	$	17,794		$	255,999	$	—		$	313,936
(Loss) income from operations		(806	)		5,374		(575	)		17,008		(2,820	)		18,181

Three Months Ended January 31, 2022
Revenues	$	14,599		$	10,620	$	13,535		$	298,304	$	—		$	337,058
(Loss) income from operations		(2,271	)		2,058		(2,866	)		19,897		(3,004	)		13,814

Six Months Ended January 31, 2023
Revenues	$	40,208		$	39,135	$	34,744		$	521,665	$	—		$	635,752
Income (loss) from operations		706			10,605		(1,631	)		34,271		(5,544	)		38,407

Six Months Ended January 31, 2022
Revenues	$	28,829		$	20,692	$	26,448		$	631,172	$	—		$	707,141
(Loss) income from operations		(3,866	)		3,405		(7,059	)		40,225		(5,113	)		27,592


	Three Months Ended January 31,				Six Months Ended January 31,
	2023		2022		2023		2022
	(in thousands)
BOSS Money	$	17,649	$	12,029	$	35,203	$	24,123
Other		2,672		2,570		5,005		4,706
Total Fintech		20,321		14,599		40,208		28,829
National Retail Solutions		19,822		10,620		39,135		20,692
net2phone		17,794		13,535		34,744		26,448
Mobile Top-Up		106,127		116,246		215,176		244,731
BOSS Revolution Calling		82,831		99,951		169,083		205,920
IDT Global		58,631		73,117		120,242		162,312
Other		8,410		8,990		17,164		18,209
Total Traditional Communications		255,999		298,304		521,665		631,172
Total	$	313,936	$	337,058	$	635,752	$	707,141

(in thousands)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Total
Three Months Ended January 31, 2023
United States	$	19,822	$	19,612	$	9,514	$	176,424	$	225,372
Outside the United States:
United Kingdom		—		—		—		69,000		69,000
Other		—		709		8,280		10,575		19,564

Total outside the United States		—		709		8,280		79,575		88,564

Total	$	19,822	$	20,321	$	17,794	$	255,999	$	313,936
Revenues	$	19,822	$	20,321	$	17,794	$	255,999	$	313,936


(in thousands)
Twelve-month period ending January 31:
2024	$	3,135
2025		2,739		$	2,988
2026		1,076			1,344
2027		454			636
2028		137			320
2029					183
Thereafter		—			152

Total lease payments		7,541			5,623
Less imputed interest		(381	)		(365	)

Total operating lease liabilities	$	7,160		$	5,258

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
January 31, 2024:
Certificates of deposit*	$	960	$	—	$	—		$	960
U.S. Treasury bills and notes		23,738		12		(76	)		23,674
Government sponsored enterprise notes		3,261		1		(3	)		3,259
Corporate bonds		3,901		1		(376	)		3,526

Total	$	31,860	$	14	$	(455	)	$	31,419

July 31, 2023:
Certificates of deposit*	$	4,080	$	—	$	(4	)	$	4,076
U.S. Treasury bills and notes		31,186		—		(148	)		31,038
Government sponsored enterprise notes		3,881		—		(8	)		3,873
Corporate bonds		3,912		—		(485	)		3,427

Total	$	43,059	$	—	$	(645	)	$	42,414

	Fair Value
	(in thousands)
Within one year	$	23,087
After one year through five years		7,496
After five years through ten years		808
After ten years		28

Total	$	31,419

	Unrealized Losses		Fair Value
	(in thousands)
January 31, 2023:
U.S. Treasury bills and notes	$	94	$	11,315
Government sponsored enterprises notes		4		2,508
Corporate bonds		487		3,450
Total	$	585	$	17,273

July 31, 2022:
Certificates of deposit	$	14	$	1,986
U.S. Treasury bills and notes		114		13,734
Corporate bonds		416		3,514
Municipal bonds		3		2,412
Total	$	547	$	21,646

	Unrealized Losses		Fair Value
	(in thousands)
January 31, 2024:
Certificates of deposit	$	—	$	—
U.S. Treasury bills and notes		76		21,754
Government sponsored enterprise notes		3		2,910
Corporate bonds		376		3,384

Total	$	455	$	28,048

July 31, 2023:
Certificates of deposit	$	4	$	3,356
U.S. Treasury bills and notes		148		31,038
Government sponsored enterprise notes		8		3,873
Corporate bonds		485		3,368

Total	$	645	$	41,635


	Three Months Ended January 31,						Six Months Ended January 31,
	2023			2022			2023			2022
	(in thousands)
Net losses recognized during the period on equity investments	$	(228	)	$	(2,952	)	$	(2,169	)	$	(17,446	)
Less: net gains recognized during the period on equity investments sold during the period		22			25			18			10

Unrealized losses recognized during the period on equity investments still held at the reporting date	$	(250	)	$	(2,977	)	$	(2,187	)	$	(17,456	)

	Level 1 (1)		Level 2 (2)		Level 3 (3)			Total
	(in thousands)
January 31, 2024
Debt securities	$	23,674	$	7,745	$	—		$	31,419
Equity investments included in current assets		5,076		—		—			5,076
Equity investments included in noncurrent assets		—		1,000		1,450			2,450

Total	$	28,750	$	8,745	$	1,450		$	38,945

Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(1,945	)	$	(1,945	)
Other noncurrent liabilities		—		—		(2,572	)		(2,572	)

Total	$	—	$	—	$	(4,517	)	$	(4,517	)

July 31, 2023
Debt securities	$	31,038	$	11,376	$	—		$	42,414
Equity investments included in current assets		6,198		—		—			6,198
Equity investments included in noncurrent assets		—		2,500		1,263			3,763

Total	$	37,236	$	13,876	$	1,263		$	52,375

Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(2,032	)	$	(2,032	)
Other noncurrent liabilities		—		—		(2,773	)		(2,773	)

Total	$	—	$	—	$	(4,805	)	$	(4,805	)

	Level 1 (1)		Level 2 (2)		Level 3 (3)			Total
	(in thousands)
January 31, 2023
Debt securities	$	23,764	$	6,013	$	—		$	29,777
Equity investments included in current assets		9,213		—		—			9,213
Equity investments included in noncurrent assets		—		—		1,225			1,225

Total	$	32,977	$	6,013	$	1,225		$	40,215

Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(2,275	)	$	(2,275	)
Other noncurrent liabilities		—		—		(4,334	)		(4,334	)

Total	$	—	$	—	$	(6,609	)	$	(6,609	)

July 31, 2022
Debt securities	$	13,734	$	8,569	$	—		$	22,303
Equity investments included in current assets		17,091		—		—			17,091
Equity investments included in noncurrent assets		—		1,230		1,132			2,362

Total	$	30,825	$	9,799	$	1,132		$	41,756

Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(2,578	)	$	(2,578	)
Other noncurrent liabilities		—		—		(5,968	)		(5,968	)

Total	$	—	$	—	$	(8,546	)	$	(8,546	)

	January 31,2023			July 31,2022
	(in thousands)						January 31, 2024		July 31, 2023
Assets:
							(in thousands)
Assets:
Cash and equivalents	$	3,286		$	1,808		$	2,394	$	1,596
Restricted cash		2,064			4,490			4,934		7,848
Trade accounts receivable, net		13			31			90		62
Disbursement prefunding								1,056		585
Prepaid expenses		179			14			323		197
Other current assets		1,038			1,387			255		317
Due from the Company		—			86
Property, plant, and equipment, net		375			467			166		272
Other intangibles, net		813			889			661		737

Total assets	$	7,768		$	9,172		$	9,879	$	11,614

Liabilities and noncontrolling interests:
Trade accounts payable	$	—		$	—		$	11	$	—
Accrued expenses		25			20			334		70
Other current liabilities		3,990			5,559
Settlement liabilities								5,336		7,573
Due to the Company		1			—			263		26
Accumulated other comprehensive loss		(15	)		(9	)
Accumulated other comprehensive income								37		21
Noncontrolling interests		3,767			3,602			3,898		3,924

Total liabilities and noncontrolling interests	$	7,768		$	9,172		$	9,879	$	11,614

	Unrealized Loss on Available-for-Sale Securities			Foreign Currency Translation			Accumulated Other Comprehensive Loss
	(in thousands)
Balance, July 31, 2022	$	(546	)	$	(10,759	)	$	(11,305	)
Other comprehensive loss attributable to IDT Corporation		(34	)		(2,372	)		(2,406	)

Balance, January 31, 2023	$	(580	)	$	(13,131	)	$	(13,711	)

	Unrealized Loss on Available-for-Sale Securities			Foreign Currency Translation			Accumulated Other Comprehensive Loss
	(in thousands)
Balance, July 31, 2023	$	(645	)	$	(16,547	)	$	(17,192	)
Other comprehensive income (loss) attributable to IDT Corporation		204			(288	)		(84	)

Balance, January 31, 2024	$	(441	)	$	(16,835	)	$	(17,276	)

(in millions)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Corporate		Total
Three Months Ended January 31, 2024
Depreciation and amortization:
Included in “Direct cost of revenues”	$	0.5	$	—	$	0.6	$	0.2	$	—	$	1.3
Included in “Selling, general and administrative expense”		0.3		0.7		1.0		1.8		—		3.8

Three Months Ended January 31, 2023
Depreciation and amortization:
Included in “Direct cost of revenues”	$	0.4	$	—	$	0.5	$	0.2	$	—	$	1.1
Included in “Selling, general and administrative expense”		0.2		0.6		0.9		2.2		—		3.9

Six Months Ended January 31, 2024
Depreciation and amortization:
Included in “Direct cost of revenues”	$	0.9	$	0.1	$	1.2	$	0.4	$	—	$	2.6
Included in “Selling, general and administrative expense”		0.6		1.3		1.8		3.8		0.1		7.6

Six Months Ended January 31, 2023
Depreciation and amortization:
Included in “Direct cost of revenues”	$	0.7	$	—	$	1.0	$	0.4	$	—	$	2.1
Included in “Selling, general and administrative expense”		0.4		1.3		1.7		4.3		—		7.7

	●	for NRS, active ~~point of sale,~~point-of-sale, or POS, terminals, payment processing accounts, and recurring revenue,
	●	for net2phone, seats and subscription revenue, and
	●	for Traditional Communications, minutes of use.

	Three months ended January 31,						Change						Six months ended January 31,						Change
	2023			2022			$			%			2023			2022			$			%
										(in millions)
Revenues:
BOSS Money	$	17.6		$	12.0		$	5.6			46.7	%	$	35.2		$	24.1		$	11.1			45.9	%
Other		2.7			2.6			0.1			4.0			5.0			4.7			0.3			6.4

Total revenues		20.3			14.6			5.7			39.2			40.2			28.8			11.4			39.5
Direct cost of revenues		(8.0	)		(6.1	)		1.9			30.7			(16.3	)		(12.1	)		4.2			34.9
Selling, general and administrative		(12.8	)		(10.2	)		2.6			25.7			(23.9	)		(19.5	)		4.4			22.4
Depreciation and amortization		(0.6	)		(0.6	)		—			23.3			(1.2	)		(1.0	)		0.2			22.7
Severance		—			—			—			—			—			(0.1	)		(0.1	)		(100.0	)
Other operating gain		0.3			—			(0.3	)		nm			1.9			—			(1.9	)		nm

(Loss) income from operations	$	(0.8	)	$	(2.3	)	$	1.5			64.5	%	$	0.7		$	(3.9	)	$	4.6			(118.2	)%

	January 31,				Change
	2024		2023		#		%
	(in thousands)
Active POS terminals		28.7		22.4		6.3		28	%
Payment processing accounts		18.2		12.5		5.7		45	%

	January 31,				Change
	2023		2022		#		%

				(in thousands)
Active POS terminals		22.4		16.5		5.9		35	%
Payment processing accounts		12.5		8.0		4.5		55	%

Payments Due by Period (in millions)	Total		Less than 1 year		1–3 years		4–5 years		After 5 years		Total		Less than 1 year		1–3 years		4–5 years		After 5 years
Purchase commitments	$	5.9	$	5.9	$	—	$	—	$	—	$	17.6	$	17.6	$	—	$	—	$	—
Connectivity obligations under service agreements		0.7		0.5		0.2		—		—		1.0		0.9		0.1		—		—
Operating leases including short-term leases		8.1		3.5		4.0		0.6		—		6.7		3.8		2.2		0.5		0.2

Total (1)	$	14.7	$	9.9	$	4.2	$	0.6	$	—	$	25.3	$	22.3	$	2.3	$	0.5	$	0.2

	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, 2023		—	$	—		—		4,576,737
December 1–31, 2023		—	$	—		—		4,576,737
January 1–31, 2024		9,791	$	32.49		9,791		4,566,946

Total		9,791	$	32.49		9,791

Exhibit Number		Description
31.1*
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*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

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

	IDT CORPORATION

March ~~13, 2023~~11, 2024	By:	/s/ SHMUEL JONAS
		Shmuel Jonas
		Chief Executive Officer

March ~~13, 2023~~11, 2024	By:	/s/ MARCELO FISCHER
		Marcelo Fischer
		Chief Financial Officer