IDT - Earnings call transcript Q2 2021

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Operator

Good evening, and welcome to the IDT Corporation's Second Quarter Fiscal Year 2021 Earnings Call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the 3-month period ending January 31, 2021. [Operator Instructions]. After the prepared remarks, Marcelo Fischer, IDT's Chief Financial Officer, will join Mr. Jonas for Q&A. to during in call, general to the in are made prepared in or differ statements that nature or uncertainties which remarks question-and-answer subject anticipates. materially forward-looking from this actual the either conference the specific may those Any cause and company results risks session, whether periodically and in the reports These risks are but discussed include, SEC. not limited IDT uncertainties files with and uncertainties to, the specific risks that that either may to they or update to IDT have assumes statements update that made make forward-looking factors differ no cause to or obligation forecast. those may any results materially the from actual In measures, income earnings per their management non-GAAP including IDT's adjusted session, share. EBITDA, or non-GAAP less in presentation net the adjusted question-and-answer non-GAAP to may make reference EBITDA or CapEx, earnings schedule reconciles non-GAAP and corresponding per in A adjusted non-GAAP CapEx, EBITDA net GAAP adjusted IDT's nearest release the income provided less measures. share to earnings EBITDA, the Relations website. the available of is that IDT page release note Please earnings the IDT on Investor Corporation's earnings The filed Form the SEC. on with also the X-K has release been I turn over Mr. the would to to call like now Jonas. ahead. go Please

Samuel Jonas

operator. for you, ended X to Thank by call XX, Year Quarter IDT's on Financial Marcelo January today I'm the the XXXX. joined months covering Call Fischer, IDT's XXXX Earnings Fiscal Chief Welcome results Second Officer.

increases million was on quarter from Consolidated March $XX revenue. year-over-year to revenue XX-Q, quarter, direct $XX.X consolidated consecutive revenue, about we revenue or cost revenue. substantially in which expect For EPS. delivered results, direct operations to $X please with increases and of sixth and by of of million our Form increase operations SEC $XXX third our a revenue significant earlier expense and Consolidated revenue million IDT report our financial million on year-over-year. including in SG&A is a read detailed increases filed another cost powered in operational $XX.X quarter, to this meanwhile quarter our and income million. year-over-year our earnings increased less year-over-year today release from in less XX. the of strong income increased Consolidated year-over-year unchanged It consecutive file

the to year-ago units this its up added terminal POS units $X.X In by XX,XXX the to over $X.XX in than in and our were quarter's Retail redeploying to Revolution and the year-ago our X revenue diluted XX, the by our and the January processing businesses, from led segment X,XXX We growth in in over services of and Fintech higher-margin those NRS netXphone-UCaaS units. quarter. our overhead At added digital Traditional netXphone-UCaaS. in businesses expansion EPS in $X.XX of from successfully the accelerate increased billable picked less Within and network payment had National the quarter. segment, results year-over-year network The NRS segments. Fintech XXX million, expansion highlighted network. pace significantly. Money are quarterly quarter, reducing over Solutions, We've revenue by higher-margin to support increased year-over-year Fully advertising BOSS XXX% resources NRS' Transfer out-of-home Communications growth we sales.

million. Money these helped year. past we over early within the in a they $XX.X both our to Also Although to monetizing are Fintech, in terminal the per revenue revenue of of BOSS stages POS drive service percent increase XX-plus Revolution increased XX% offerings, Transfer

corridors this and to Asia global Nepal. milestone, We an Southern Pakistan and build with the continue quarter our to addition opening passed out important of disbursement network,

of highly from The our competitive significant us market. number laying DXC groundwork a Looking reach of to the countries. for into and origination ahead, provide network expansion transaction service we volumes disbursement enable our of key are the first destinations a

our in and fiscal Canada Transfer offering the XXXX. Money We U.K. expansion in by expect Revolution to launch BOSS

from the XX% of exchange XXXX X last diminished been segment, benefit Canada, release, in earnings markets, end our the million. strong market in As second before climbed netXphone-UCaaS fiscal that quarters in drove conditions Growth America we which $XX.X noted unusual through dissipating continued but South growth of half by Money foreign year, to our first business the our the to solid Spain. quarter. In all of of second has the revenue subscription the U.S., and Transfer our

and the adjusted integrations leading enhancements a but the in growth second sacrificing geographic and continued which quarter, strategy, in The top revenue to communications Services set offerings CRMs Strong and most deploy revenue. seat to platform. the building in count growth world's to international strengthen launched year-over-year Zoho one than Communications CIOReview, year-ago netXphone integration without our increase our the in our million $XX.X we and Microsoft as mobile integration us adding companies top-up the Revolution publication These Calling on revenue retail Carrier have largest customers EBITDA Teams. platform, more with less at Our offset with messaging a transformative $X.X growth. netXphone we offering channel-based name integrations validates develop CapEx BOSS leaders, with recently, in technology to In a previous quarter. of reflects segment, increased integrations also some solutions higher aggregate position CRM. stable accelerated and approach per able the for been sales itself, million, our More In to we with powerful launched Traditional Salesforce, decline more rate Slack, leading notably combination than businesses. seat to prompted sophistication with providing adaptability of its our XX of feature enable for

new to Looking beyond our businesses opportunities. established

relaunch We the are to BOSS initiative. Revolution Mobile preparing

that in to time drives a MVNO do spirit the will are better. this IDT. struggled, we do but will as we much value entrepreneurial powerful confident creation Sprint we and our Across of we businesses, with continue Our around, build everything source effort partnership be initial

and I to take your Now be happy questions. Marcelo would

Operator

Instructions]. come question [ph], will [Operator And first Brian Investor. Warner the from

Unidentified Analyst

you in ready? two by And costs, a us before you can bit you can insight of sense want congratulations, traditional question. better way, a seems might of give just the any is thinking the sort your businesses sort appropriate tight on finally, think you to would a you wondering that -- be business just good. quarter, Fintech I into But for your give I sort of timing essentially actually business us might metrics ready I'm might outlook then outlook this considering what in about there. revenue netXphone-UCaaS where What operationally wondering I And what on actually, over think the if growth flow free question just business you first I'm to be you generated, for you was But think when cash on wondering, you hit I'm metrics part part sort you have is. do phone for second the to little mean, hold? little it two looked get maybe showing just business, spinoff. very same -- of questions, of wondering if all $XX your be seem -- and think traditional that? think of your of the I'm million can that's I And a color and the

Samuel Jonas

everything at so after as I'm remember answer to feel either Okay. try want free This point do you're to in questions. to or is finished, welcome to any Shmuel. that answer well. you And and step will I your if Marcelo, better

is really done sometime, know, off to would that end possibly I We've spinoffs, slightly our spin So believe the netXphone you building pandemics a come of say, number a the they once. all calendar but we and don't goal work. businesses of lot of I do year, before goal. after. quite as the at but unfortunately, to do And take X enough our have bandwidth that is And frankly, spinoffs first,

to about finish can't the new the the as second that really one. even in say would one we're first we think also background I businesses well. building start So we But other until

Unidentified Analyst

great. sounds That

Samuel Jonas

as doing what again, your that the and job operating good hard, home pandemic insight, people flow on more forecasts to the of because the back don't going more answers if expect they has and or going doing very going give I we traditional me question results frankly, feel that pretty forward. stay I confident feel hard say business. of just resources all to think the wasn't in would cash some forward, It's far a know then we COVID than come first call mean, I can don't and we're the we for we every can share the well. it with on I is you in But business and don't as touch strength be. in or try much give the going we do if if business I'll to business will business know. again, day But is about from traditional wanting our it, you forward, And part. the what and I

Unidentified Analyst

Okay.

stuff And business, some are the thought. of guess, people have than I'm the of the free than world would that WhatsApps and the to I traditional read impacted the maybe I've curious less what on some services extent

Samuel Jonas

made companies, Again, maybe or said day. That is our for speaking, quality again, free services provide free I I free competitor. I free. The that many #X in the believe countries, other biggest so. this And uncompetitive. other other I some with basically -- companies to mean, options really not great us get think a it's are, service competitor, us frankly is PIN-less I've you our versus Well, are and we years, night mean customers. that has our that is countries, And in

really it's So answer. a market-by-market

Unidentified Analyst

sorry, I'm go ahead. Terrific.

Marcelo Fischer

It's Marcelo.

on our efforts spinoffs. top Just Obviously, a Shmuel's on the terms comments few right with is in on netXphone of focus our it. now of

so well, more PIN-less improved helped of margins And our big potential shifting really And yes, particularly determined where we will on of than the in as to discussions business, have what from that held just spinoff discussions part of as a in We place. post-netXphone, traditional segment stronger toward at now, those whether that start about has the be better even The as we to haven't the would entire our the that's COVID time direct-to-consumer process are business. expected. terms margins. year-plus terms resilience that had But take be retail of charges PIN-less Fintech Fintech of or business of has we mix thinking occur done the when segment. NRS shown process, a on probably will the have digital the for much business.

conferencing Carrier decline, generation and other businesses. with continue declines the we mode by to of the of more have that, Wholesale but and we COVID, million the that range communication, happening on VoIP top, side. Wholesale expecting on IMTU seen And declines offset you other is continue to our flow in to very on grow continue will business CapEx, been Carrier IMTU to that million this we'll revenues has that time. and are the able so that continue combination hopefully, that in of that It to strong years. at we but from continues calling that expect see or long Carrier that, believe, those $XX do over X less and more we well. happens business coming of strong. the $XX more strength EBITDA Wholesale And fact Communications doing probably be video the in quite look PIN-less the the Our offset, of offset a believe be revenues because affected And cash to the we to with margins Traditional that, could we the margins goes will when than together to extremely

Operator

question Smith James The next come Investor. [ph], will from

Unidentified Analyst

for had two you. questions I

the The NRS in terminal been the per last mentioned was business has prepared XX first remarks, revenue achieved months. XX% the roughly in in increase

then next next at was the And potentially sort regards second that year two, the have you question over where mind revenue head or the you initiatives level? breaks think to you you on at specifically of which monetize as terminal you two? UCaaS. If a the view EBITDA various even do as may have year the figure Do in a revenue or business that per directionally have think house with going very over to business,

Samuel Jonas

of have, in. brings terminal much I how knowledge NRS fair the on each a guess, I economics No. amount of

doing However, consumers to where the where an interested percent tremendous from difference in what quite not it area us aren't volume a are processing really at talking is an hundreds does amount, I advertisers as to with I'll to quite the talking and consumers vary call processing is mean, where a of interested area that merchant store high. is merchant there and advertisers maybe

I an -- it's now So open to average to that mean Texas like I restaurant don't you a for hard mean couldn't any does you can to at, could exact and -- that's you restaurant completely restaurant masks profit? have know, New really doing going -- and an very in give me like give answer. give mean, is what I isn't you -- in capacity a it's a saying, it's depend York I I business. doing has no in and have right XX% XX% or Like

So with merchant get to you the over for you a our What merchant services very to what unparalleled we lot expect good that that and stores provide done services time, it. we there continue. of our on when really it in merchants is services don't I is amount merchant differentiate pricing we penetration for would price pay the already isn't to the that significantly. of with up go expect, a you answer features the store. each and price side we've services it for And services particular aim to started And see those and that, we've we when And for with price. the get say

So unique we're kind into in the merchant don't force that getting you we sense our services. of

but get our software without you for it, services. merchant going pay more if the can our to you're get You don't services significantly

bit. I If that, answers So little your that hope rephrase to didn't, welcome a you're question it. it

business, the far netXphone as it's answer. different a As

come EBITDA that down profitability very could if to think we wanted sales. I quickly slow

it, sales. to for bring balance sale strike, I up a between to think technology and new if every sales And increase we aggressive. maybe and I'll investing and we call there's want healthy in for we ramping being not too try sales, those on that cost

more really days, them frankly, think, quicker. not a do returns how growing much very be balance. people and growing very in And to we off getting to whether well. or wonder really are have we debt so. are where of more, good good some we the a Although investing same we very, time, it's or I to But and throw very, to again, want we of to a do to our retention. should are efficiently, quicker, grow these -- And investors very, I little earnings businesses, money on case very really should just the people, whether be And that's the and grow. wonder And businesses all try question even have that They days, not grow and to say not balance. want say, or And the we the again, company pour I'd operate we faster. businesses if some balance choosing I correct to want at I'll investing because

Unidentified Analyst

the and That recent business the think Traditional the servicing mind been If into the mentioned question is NRS in into which XX,XXX color. the very differently, I rephrasing helpful I have sort wouldn't I appreciate products most that is you slightly merchants of XX-K Communications distributed. all the

next X? number the year And how with terms the the over market on you potentially? XX,XXX ceiling about of You're business now sort X addressable product. at, or it, in think you do merchants XX,XXX, NRS of of merchants Do a that see call or

Samuel Jonas

actually at after believe that people all. Not sold think mean I that, that's go past, stores that Revolution just not reality. BOSS and have I we a the in oftentimes, only

going So started, a And obviously, IDT we before. came an into But sold and from when never a of customers, years from we've stores number been easier our to large time for stores. are them. that still, sales we Revolution coming have will BOSS products into any percentage that say, huge I going day, of this our selling originally stores

have we number our in we I provide and market, in we the amount the have not of it's that long market. well It's XX,XXX the mean of we terms -- into as a phenomenally a but stores done they the time, hundreds But getting addressable So because our have that been -- thousands. great store that great product. a addressable is stores for believe of customers service know

Operator

come will question next The [indiscernible]. from

Unidentified Analyst

I Square? companies. National differentiating point-of-sale what's bigger from to Congratulations companies the great They're as on Retail quarter. Solution other just another obviously like ask such wanted

appreciate on bit I color So provide just would that, of you little could a if it.

Samuel Jonas

I like us. that sounds some say the would a so say you business. if you're apologize. hearing you Maybe I'm of It I can would But -- echo, mind muting, couple don't things that color. provide an I in differentiate

just any or in they a As a and about ago, minute their to a is differentiates is get merchant require merchant just I contract already and you thing us therefore, you require use two if examples, don't to we talked I'll one get Toast, bank Square Clover services. why And that merchant comfortable, that three pricing, services. they're our et merchant that about or we competitors. feel don't switch or some using to wouldn't of than the cetera, that currently we believe service, We is services. that hesitant provide better force to from them reasons of better merchant even number a our switching biggest

the You some softer say, being can larger human you that I'll have when our we, ones actually us. call said, than the get of you being like But competitors, sell a a mentioned. phone on

than terminals will sell, can call line stores a coming I'll whole that which today our the of terminals. buy more we that segment might currently you that ones fit not prettiest are what you our the that terminals purpose-built now, that that that of would I like, augment the it's actually are for in types the is serve. might planning that certainly think -- in sense and our we future more right to I the -- terminals that pleasing But of think we are sort we say software of buy. higher-end currently That stores we be with another also a out not also aesthetically

we're currently line an I stop So to sell. what of additional we're mean going that's have we the to thing selling hardware. going that

a quality it, customers download call are I'll can we building of our go of the from out and the thing other does, which way process is and reliable. maybe is of think or we we services. you good little on is obviously similar, as a Square an The in as not I just It's as But getting in price. sales And dongles like great some App that our know selling In something our a software they good not product say, product. bit using have get a we than have, better a sphere and knock one is down really extremely cocky, but many like it's team Store wood, theirs. we mean that's that really to. comes what it's our have theirs. respects, really, in in I respects, And at outages. X merchant just my it. opinion, app as excellent and start though, it that That's

Operator

The next Private from Warner [ph], Investor. question Brian come will

Unidentified Analyst

could follow-up business. on I If just get NRS the a

and a If for the reasonably take you if future, healthy you in or sort of at then you segments? of that years can size point some that look on about in I guess, call third of maybe those opportunities, merchant think might and merchant bucket and the of somebody give it, reasonably market takes revenue proportionately advertising healthy of the a maybe who analytics, mind, split a it, business and X X color think services like is between sort bucket, you typical any what terms a another like is a in in merchant your

Samuel Jonas

they the market, for the community willing a wants there's or city declined really the because I data. that view, have like specific many that, to in how it's I market. interested street job. therefore, really competitors they're don't -- just for is come aren't store of that advertisers it really doing mean, different -- a lot they care, low. it a reason, I they again, you to be could that and point into into area sales thing a really be doing have give a us demographics has whatever know where -- can't it could in I particularly market of could be don't their a and insights going as it's advertising pay for dependencies. so the advertising the their doing or from in of answer. said, they're big same in well, good mean know, a I in that in It a on be And because an money think X,XXX the you And clear beer and company people that might data are market, what's day,

IDT obviously, answer it's bigger don't -- speech. nowadays. of -- if Usually, or that after my mean, I -- it in day is is, because enormous. at you mean you're merchant follow-up today, great again, And amount said, we've On And services, and and the opportunities an you into dollar one -- scratched your if we expect an I'm to than the the answering Like there's you're much we as I going way do tap again, mean buying mean that make deal, I over and -- can question we as NRS terms to Yes, time but you it. [indiscernible] and barely the per I today. I in huge a model, is of getting call that improved I'm -- really X a I market I'll because like can't think is exist. getting have that's already approximate better valuable I the more expect that if again, you And be swipe, or But want I IDT to easier, to get think it, we X after question. sort reading hope exciting -- that questions minutes I to off give think surface. night. we're market, get it, call I however

Marcelo Fischer

Right.

what down the is certain. one road. But thing will for predict the So hard Brian, mix said, Shmuel it's as to be

you unit those significantly our continue selling get terminal X timing and we higher have on fee to that that. and monthly progressively than obviously merchant channels margins go the the trying As analytics the of recurring services, just

net both likely to increase. network on the the margin to grow, this is and that gross and that thing that margins will probably very continue will services, one NRS as continues business So be

Samuel Jonas

as mean the color. services a of said, being now talked Yes. us I also about revenue that ton more we able more we've they incentivized with changed little with merchant that so certainly one earlier, That our a mean, just you're piece I'll to added add I go pricing have of services. I software bit merchant that because more that's something even our features. adding And to than had very to are features. very, customers only And recently. plans ever are include higher getting before, really they're that's happened buy

Operator

[Operator Instructions].

no question-and-answer As concludes you questions, more conference presentation. call. today's there are this attending our for session Thank and

You may now disconnect.

Samuel Jonas

Thank you.

IDT (IDT) 5 Mar 212021 Q2 Earnings call transcript