Shares of IDT Corporation IDT have gained 3.1% since the company reported its earnings for the quarter ended Oct. 31, 2024, outperforming the S&P 500 index’s 0.1% increase over the same period. Over the past month, IDT stock has risen 2.3%, exceeding the S&P 500’s 0.9% gain during the same time frame, highlighting the stock’s favorable relative momentum.

For the quarter ended Oct. 31, 2024, IDT reported consolidated revenues of $309.6 million, up 2.8% year over year, driven by growth across key segments such as National Retail Solutions (NRS), BOSS Money, and net2phone. Gross profit rose 14.5% year over year to $107.6 million, supported by improvements in gross margin, which increased 356 basis points to 34.8%. Income from operations for the first quarter of fiscal 2025 was $23.6 million, up 37.7% year over year.

Net income attributable to IDT soared 125.2% to $17.2 million in first-quarter fiscal 2025, reflecting robust operational efficiency. Earnings per share (EPS) surged 126.7% to $0.68 in first-quarter fiscal 2025 from $0.30 in first-quarter fiscal 2024, while adjusted EBITDA reached a record $29.1 million, up 30.5% year over year.

Segment-wise, the NRS recurring revenue increased 29.3% to $28.9 million, while the Fintech segment, driven by BOSS Money, saw a revenue boost of 39.6% to $37.1 million. Conversely, the Traditional Communications segment experienced a 4.4% revenue decline to $220.5 million but achieved a 1.7% rise in income from operations.

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Key Business Metrics and Management Commentary

NRS: The NRS segment demonstrated strong growth, with active POS terminals increasing 21.7% year over year to 33,100. Income from operations rose 21.1% year over year to $6.6 million, while adjusted EBITDA grew 22.6% to $7.6 million. The company attributed growth to higher merchant services revenues, fueled by a 32.7% increase in payment processing accounts and the expansion of NRS’ POS network.

Fintech Segment: Fintech, led by BOSS Money, delivered a stellar performance, with BOSS Money revenue increasing 39% year over year. Transaction volume growth, particularly in digital channels, boosted gross margins. Income from operations increased from a loss of $1.4 million in first-quarter fiscal 2024 to $3.2 million in first-quarter fiscal 2025. The segment’s adjusted EBITDA similarly saw a significant turnaround, rising to $4 million in first-quarter fiscal 2025 from a $0.7 million loss in first-quarter fiscal 2024.

net2phone: net2phone’s subscription revenues climbed 13.4% to $21 million in first-quarter fiscal 2025, supported by an 11% increase in seats served. Despite currency headwinds in Latin America, the segment generated income from operations of $1 million and achieved 77% growth in adjusted EBITDA to $2.5 million. Management emphasized its financial discipline and focus on expanding its U.S. footprint, where profitability is strongest.

Traditional Communications: This segment faced challenges with a 4.4% revenue decline to $220.5 million, primarily due to the persistent decline in BOSS Revolution’s minutes of use. However, improved pricing and cost management led to a 1.7% increase in income from operations to $15.7 million.

IDT Corporation Price, Consensus and EPS Surprise

IDT Corporation price-consensus-eps-surprise-chart | IDT Corporation Quote

Management Commentary

CEO Shmuel Jonas highlighted the company's strong performance across its core segments, crediting investments in product development and improved operational efficiencies. The strategic emphasis on enhancing gross margins within the BOSS Money retail channel and broadening net2phone’s U.S. market presence were identified as critical drivers for the quarter.

Factors Influencing Performance

Management highlighted margin improvements in key segments, operational efficiency, and the ability to navigate foreign exchange challenges. Investments in high-margin initiatives and customer-focused solutions were key drivers of the strong performance. The company’s strategy of leveraging synergies between its businesses — such as cross-marketing within the BOSS ecosystem — was pivotal in maintaining growth momentum.

Guidance and Strategic Outlook

IDT expressed confidence in sustaining its growth trajectory, particularly in high-margin areas such as NRS and BOSS Money. While headwinds like currency fluctuations in Latin America remain, the company is focusing on bolstering its U.S. market presence and scaling operations.

Other Developments

During the quarter, IDT repurchased 37,714 shares of Class B common stock for $1.3 million, underscoring its commitment to shareholder value. Additionally, the company continues to maintain a strong liquidity position, with $180.4 million in cash and investments, a slight decline due to prefunding disbursement payments within its Fintech segment.

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