IDT Corporation

Good evening and welcome to the IDT Corporation's first quarter fiscal year 2022 earnings call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the three-month period ended October 31st, 2021. During prepared remarks by IDT's Chief Executive Officer, Shmuel Jonas, all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After Mr. Jonas' remarks, Marcelo Fisher, IDT's Chief Financial Officer, will join Mr. Jonas for Q&A. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ significantly. materially from those which the company anticipates. These risks and uncertainties include but are not limited to specific risks and uncertainties discussed in the reports that IDT files periodically with the SEC. IDT assumes no obligation either to update any forward-looking statements that they have made or may make, or to update the factors that may cause actual results to differ materially from those that they forecast. In the presentation or in the Q&A session, IDT's management may make reference to non-GAAP measures including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings or loss per share. A schedule provided in the IDT earnings release reconciles adjusted EBITDA, non-GAAP net income, and non-GAAP earnings or loss per share to the nearest corresponding GAAP measures. Please note, that the IDT earnings release is available on the investor relations page of the IDT Corporation website. The earnings release has also been filed on Form 8K with the SEC. I will now turn the conference over to Mr. Jonas.

Thank you, Operator. Welcome to IDT's first quarter fiscal year 2022 earnings call. I'm joined on the call by Marcella Fisher, IDT's Chief Financial Officer, and we'll both be available to answer questions after my remarks My discussion today focuses on our first quarter fiscal 2022. The three months ended October 31st, 2021. For a more detailed report and discussion on our financial and operational results, please read our earnings release filed earlier today and our Form 10-Q that we expect to file with the Securities and Exchange Commission on Friday. Our first quarter operational results were, thank God, strong once again, highlighted by robust performance from our high margin Netaphone, NRS, and Boss Money businesses, as well as for mobile top-up. As a result, we delivered year-over-year increases in revenue, gross profit, income from operations, and adjusted EBITDA. At our Netaphone UCAS segment, subscription revenue increased 37.5% year-over-year, and revenue and margin increased 20 basis points to 82.3%. Both our subscription revenue growth and revenue margin rates remain well above industry averages. In the United States, our expanding network of channel partnerships drove a 42% year-over-year increase in UCAS subscription revenue. While in Latin America, our strategic focus on mid-sized businesses, multi-channel go-to-market strategies, deeply localized in-country offerings, all helped to increase UCAS subscription revenue by 58%. NetDepot has been getting especially strong traction in several markets, including Mexico. where service revenue increased nearly 150%. This quarter, we landed a leading restaurant franchise, and of course, we're also closing deals with small enterprise clients throughout Mexico. Across NetPhone's market, our commitment to provide every customer with top-notch service, regardless of size, continues to help us win new business, many as a result of referrals from existing satisfied customers. when NetDefone won the Global Partner of the Year Award from UC Today, a popular news service covering the business communications and collaborations industry. NetDefone was recognized for providing exceptional performance and solutions through our global channel partners. Never content with the status quo, we continue to work on driving channel partner penetration. In 2022, we will provide our managed service partners with real-time account access, enabling them to directly support, configure, and modify their clients' accounts. This will better enable our partners to focus more on customer experience while enabling to focus their efforts on high-value services. At NRS, strong demand for NRS Pay payment processing and our recently launched funding service provide retailers with ready working capital, digital advertising, and transaction data services, coupled with continued expansion of our POS networks boosted NRS revenue by 104% year-over-year to $10.1 million in the first quarter. Recurring revenue, which excludes revenue from the sale of new terminals, increased 126% to $8.6 million. As of October 31st, NRS had over 15,100 active terminals. One of the strategic strengths of NRS is its ability to leverage our platform to provide new offerings. This opens new markets, creates additional revenue streams to boost ARPU, and accelerates growth in our terminal network. This quarter, we deployed software that enables retailers to process electronic benefits provided by the Supplemental Nutrition Program for Women, Infants, and Children nationwide, which provides nearly $5 billion in benefits annually to over 6 million beneficiaries. Most states have transitioned or are transitioning to pay these benefits electronically, known as eWIC. Our eWIC payment processing solution is a game changer for our merchants, providing an affordable, fully integrated solution to serve this channel. Until now, only larger retail chain stores or those able to pay hefty fees for eWIC payment processing could accept eWIC transactions. We have already begun to roll out our affordable eWIC offering, working with our retailers, benefit managers, and state regulators to certify our solution state by state. Money transfer had an exceptional quarter. Revenue increased nearly 15% sequentially to $12.5 million. Although the first quarter 2022 revenue decreased 18% compared to the year-ago quarter, the decline is entirely due to the impact of our transitory foreign exchange market conditions that materially improved revenue and gross profit during calendar 2021. Absent that impact, first quarter fiscal 2022 revenue increased by 45% from the year-ago quarter. Traditional communications revenue increased 6.7% year-over-year to $334.6 million. Within traditional communications, mobile top-up revenue increased 34.1% to $128.5 million, and IDT global carrier services revenue climbed slightly. These increases more than offset a decline in Boss Revolution calling revenue in line with expectations. Our mobile top-up business generated double-digit year-over-year growth in its three largest sales channels, strengthen its unique position as the only significant omnichannel player in the top-up space. All our mobile top-up regional corridors continue to expand, led by the U.S. to Africa corridor. Sales of top-up bundles, which include both airtime and data, are key in growth. These data bundles now account for roughly 30% of our total sales, and that helped increase average revenue per transaction by 11% compared to the year-ago quarter. We forecast that demand for data packages will continue to drive revenue and revenue per transaction increases. On a consolidated basis, income from operation and adjusted EBITDA both increased modestly compared to the year-ago quarter, rising to $13.8 million and $18.3 million, respectively. This quarter, we had a loss per share of 10 cents compared to EPS of 32 cents a year ago. also an unrealized $0.49 per share loss on the marked market value of our investment in Rafael Holdings stock. Looking ahead, we are making good progress and expect to be in a position in early 2022 calendar year for the potential spin-off of Net-to-Fund should our board authorize it. To wrap up, this is a strong quarter for each of our high-margin businesses, and sales of mobile top-up continue to drive growth in our traditional communications segment. Now Marcelo and I would be happy to take your questions. Thank you.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Okay, the first question is coming from Daniel Koch from Alta Fox Capital. Your line is live.

Hey, guys. Congrats on a strong quarter across the board. Thank you. The NRS numbers look pretty great, specifically the strong ARPU in the quarter. Can you shed some light on the drivers of the ARPU growth and maybe how we should think about ARPU growth going forward from here? Thanks.

Hi, Dan. Thanks for joining the call today. Yeah, we at IDT as well are very, very pleased with the progress that we have seen at NRS. While we try to shy away from giving specific guidance, let me just share with you some specifics on what NRS has been doing recently. On the SaaS-based fees vertical, where we charge our retailers monthly, we continue to look at ways to increase the set fees per terminal. We think we can accomplish this by partnering with our retailers to understand their specific needs, to develop solutions to these needs, and then finding ways to upcharge for these features. And when we think about NRF Pay and the merchant services vertical, we will continue to focus on growing the payment processing side of the business. And now offering a very compelling solution to our retailers. Now our offer today is very valuable, right? We offer our retailers a no contract, free equipment, a multiple plan approach, and with live customer service. And also, more recently, we have been able to start onboarding higher risk retailers, such as like tobacco shops, and there the processing fees are higher. So while our focus so far has been on the small independents that also purchase our POS system, in reality NRF pay is now in position to expand payment processing services beyond this channel as well. Like another merchant service product that NRS has launched recently, which you may have heard about, is called NRS Funding, which provides our retailers access to capital in a very easy and seamless process. So it's still very early, but to date, we have provided over 100 loans. And then when we think about our digital out-of-home vertical, we are seeing that this market continues to grow rapidly. And as we sell more POS terminals, so those are available inventory increases. So, for example, if an advertiser wants to, you know, offer advertising in California, and they're willing to pay, you know, X dollars per terminal in California, obviously the more terminals we have in California, the more is the amount of dollar advertising that we're going to generate. So our advertising and data partners are starting to notice more and more how our model can directly impact our business. And this is translating into the strong growth that you saw this quarter, where you saw advertising up sequentially about 150%. So that, and last but not least, we have a multi-pronged approach when it comes to expanding our POS, and our NRF-based terminal network. We have today three different complementary sales channels. We have one, a growing inside sales team. We also have our own boot in the ground sales force making in-person visits to retailers nationwide. And on that, we leverage that sales force together with our other IDT offerings. at retail, such as BOT Evolution products, Pinless, MoneyCancel, and TopUp. And we also have a well-established third-party distributor channel. So our continued investment in developing all three of these sales channels is really critical to our continued success. So if the team continues to focus on all these types of items, we should really translate into a very healthy growth rate for NRS going forward.

Great. Thanks for all the color, Marcel. I really appreciate it, and congrats again on the really strong quarter.

Sure. Thank you. Okay. The next question is coming from Brian Warner, private investor. Brian, your line is live.

Hi, guys. Thanks for taking my questions, and congratulations. Two questions. The first is on NRS. I thought in your commentary you mentioned maybe some – small loans to merchants that you had started. Did I hear that right? And can you just give us sort of a 5,000 square foot view of how you think about sort of that business and maybe a banking charter?

Well, again, you know, we don't do loans. We do, you know, merchant cash advances. You know, right now we're, you know, unlike, I'll say, Square has become, you know, a bank. We haven't taken loans. you know, that step. And again, you know, as Marcelo said, you know, it's small. Right now, you know, you've only done about a hundred.

Okay, so just so I answered properly, you were actually just talking about cash advances, which is nothing new. Correct. I got you. Okay, that actually answers that one. My second question regards the money transfer business. there seems to be a general concern that pricing in that business is, is, is on a downward skew, uh, and, and it's going to be sort of a big headwind, or at least some people sort of think that. Uh, and I know you've sort of commented in the past, um, you know, there may be some other little more creative ways to make money sort of, you know, in country or differently, um, sort of than you have in the past. Um, Can you give us sort of a two-, three-, four-year view of, you know, what you think that business is capable of doing, and do you think that franchise can continue to grow at a healthy rate?

Yes. I mean, I'd say two things. Like, I don't, you know, again, I don't know the timeline, you know, for, you know, when change exactly happens. Um, you know, sometimes you expect something to happen, you know, in, you know, six months and it ends up happening, you know, in, in 10 years. Um, and you know, when it comes to pricing on money transfer, um, you know, I can tell you, you know, already that you have, um, you know, Facebook and, you know, announced their, their, um, you know, their first, uh, I'll say country, I think it was, uh, their product is called Novi. Um, And, you know, they announced that to Guatemala. And, again, as I had spoken about, I believe, last quarter, you know, nobody does anything for free. You know, like, you know, I don't remember the saying, but there was this, you know, the saying about any product that's free, like, if it's free, then you're what they're selling. You know, and when it comes to social media, you know, as we've all seen, you know, with you know, Facebook, they charge, you know, you to use Facebook, but, you know, they, they seem to make, you know, $30 billion a quarter and everything, you know, on you. So, you know, you, you are, you know, you are the product. So, you know, again, money transfer is not going to be, you know, different in that sense. Like, you know, it's not going to be free. Like there is a cost, you know, of compliance. There's a cost of, you know, banking fees, you know, et cetera, et cetera. I mean, there's just a lot of cost in the business, and you can't just afford to give that, you know, away for free. You know, maybe, you know, to a degree it can be supported, you know, on a short-term basis, you know, promotionally, but long-term, you know, they have to, you know, they have to make a profit. So, again, my own opinion, and again, this isn't, you know, in terms of a timeline, I don't have one, but my own opinion is like overtime money transfers are definitely going to get significantly less expensive. Now, whether or not the cash money transfers that people are doing in stores versus the online money transfers that people are doing today, which one of those has a more rapid change in the pricing? I can't tell you for sure. I've heard different people argue that both ways on which one will change faster and I can see arguments why cash will be harder to I'll say change but I can see by the same token there's a lot more margin there and sometimes that's the easier one to change than online competitors but I do definitely think you know, at the end of the day, that you are going to need to make money in country. You know, and you're seeing numerous, you know, services, you know, of, you know, where, you know, we're now able to open up 22, in 22 countries, we'll be able to open up basically, you know, a visa, you know, card where people can use to spend money in country. And, you know, we'll be making money, you know, on every transaction that people are doing in that country. And we'll be able to lower our pricing because we'll be able to make money that way. And that is what I see as the future of it. In terms of our growth rate, I mean, again, I think that we are doing very well on money transfer. I'm pleased that we now have retail growing again, and online is doing quite well as well, thank God. And, you know, we're just trying to, you know, focus on, you know, improving the product, you know, more customers to use it, you know, getting them to be, you know, sickier, you know, et cetera, et cetera. But, you know, so again, we can't control, you know, what's happening everywhere in the world, but we can, you know, do our best to control, you know, what we can control.

Terrific. Thanks very much. Appreciate it.

Thank you.

Again, if you have a question, please press star, then one. Okay, we have a question coming from David Polanski from Immersion. Your line is live.

Hey, guys. How are you? Great job on NRS, as per usual. High level, like, What is the opportunity on terminal deployments? I mean, this kind of started in the independent bodegas. You're up to 15,100 installs now. Where does that go over time? Because I've seen that you're in beauty salons, you're in some coffee shops, you're in grocers, you're in tobacco and liquor. How should we think about maybe five years out, how many terminals you could have deployed and kind of just thinking about the market broadly?

You know, I don't know the answer to that question. That's the first thing I would say. You know, what I would say is that, you know, the amount of deployments that we've done, you know, recently has increased. And, you know, we see it, you know, continuing to increase. So I definitely think that, you know, there's no slowdown on the horizon. What I would say is that you're right, that each one of those verticals that you discussed of seeing some of our terminals in are verticals that we really don't completely serve today, with the exception of independent convenience stores. Each one of those is an opportunity for us to grow probably tens of thousands of terminals in. each one of those is also a separate business line. I mean, right now we're starting work on a new business line, which I'm not yet ready to talk about. But we believe that will be something that's capable of adding 10,000 terminals to our network. I mean, we've talked about Petro in the past. And again, those are a smaller number of deployments. They tend to be larger volume stores and credit card processing than our independent convenience stores. But that's another market that has tens of thousands of locations available for us to go after. So I really think that we have really only scratched you know, the surface of, you know, what we can do. And, you know, that's only in the U.S. I mean, I think there's definitely, you know, opportunity in international markets for our services, and, you know, we're starting to deploy our first units in Canada. And, you know, again, we're very excited about where the business is going.

Sorry, you said you're starting to deploy in Canada? Is that what you said? That's correct, yes. And on this opportunity that you're not ready to talk about, are you talking about a new vertical or is that like an enterprise contract? So can you go up a new vertical?

I mean, we're really not focused on, on enterprise like that. That's the, I mean, that's the one thing I would say for sure is, you know, we think that that's a, you know, a saturated market. And frankly speaking, you know, it's, it's, um, you know, it requires a different kind of sales force and a different, you know, it's a very different business, frankly, than who we focus on supporting today. And we don't see ourselves as, you know, going after that space, you know, anytime in the next couple of years, at least.

Great. Excellent. And so on payment processing accounts, you're at 6,800. So that's 45% of your base and a year ago you were at 28%. Where do you see that going? Can that get to 80%, 90% over time? How should we think about that?

I don't know if it can get to 80% or 90% over time. I think that it will personally, but I don't know if I'm right. I would say that we're already signing up probably two-thirds of our new customers onto merchant processing. You know, and we are definitely, you know, making an effort now to start to, you know, convert customers that, you know, signed up with us earlier without merchant services to get them on as well. You know, but we, you know, again, like keeping up with the growth has been tough. And frankly speaking, like we haven't really been, you know, focused on, you know, going after, I'll call it our base of customers. So, so much like we really, focused on making sure all the new customers that we get in, you know, get turned up. But, you know, over the next, you know, quarter, we're hoping to, you know, add a bunch of, you know, salespeople and installation people that will, you know, help us go after, you know, our existing base of accounts.

Right. And your merchant services revenue, are you reporting that net of fees? So is that really like a gross profit? That's a gross profit.

Yeah, I mean, it is net of fees. It's net of fees. So therefore, the revenue is really 100% gross profit.

Okay.

Again, I've read other of our, I won't say competitors, but I'll say I've read other people in the spaces, you know, numbers, and most of them do not report it that way.

Right. So you would be reporting, I mean, I think over $100 million in revenue for NRS if you were to report it gross. Am I off by saying that?

I don't want to say that you're off. I never did the translation, you know, our numbers to their numbers. I can say that, you know, that ours are net.

Okay. Okay. All right. Well, I mean, I think it's over a hundred million if you're doing it. It very well could be. You'll check it out. Yeah. So, I mean, I guess just broadly speaking, going back to what you said earlier, my questioning was, you know, you really don't see a slowdown in growth. I mean, you got a pretty good runway. You got a good upsell engine. You have ARPU expansion. You already have 80% gross margins. I mean, this could really be like 100 million ARR business net of the merchant services in a couple of years. So if you look at the valuations... Yeah, we hope so. We hope sooner. Yes, but I mean, that's like a billion dollars in enterprise value, and the entire stock today is at 1.3, 1.4 billion dollars. So, I guess, like, how do you think about that and how do you think about the timing of a potential spin for NRS?

You know, again, we don't want to, you know, commit to a timeline, you know, at this point in terms of, you know, of a potential spin. You know, right now we're really, you know, focused on A, you know, getting, you know, our spin that's already announced done. And once we've completed that, we will start to think about others. But again, we're right now focused on building this into a huge business, and that's our number one priority.

Well, I think it will be a huge business. And you look a few years out, I think the stock is tremendously undervalued if you just think about where NRS could be in a few years. But anyway, I'll get off my soapbox. I really appreciate you guys taking the time to take my questions. My pleasure. Thank you. Thank you.

Okay, the next question is coming from Adam Wilk from Greystone Capital Management.

Hey, guys. Thanks for taking my questions. I appreciate it.

Pleasure.

Really impressive quarter in a number of areas. I've been incredibly impressed with the recent efforts of NRS and mobile top-ups specifically. so starting with nrs can we talk a little bit about the data and advertising opportunity so clearly pretty significant growth in that segment and i'm wondering how you guys are kind of thinking about that opportunity moving forward in terms of maybe signing new deals with third parties or cpg companies or growing arr or what you kind of think the ceiling is there although i know it's early stages but i'd be interested in your thoughts

I mean, it's definitely early stages. I don't know where the ceiling is. All I can say is I think we're very, very far from it. In terms of new relationships, we continue to sign up new large advertising partners. We signed some very large deals this week. And we don't see any Slow down in terms of, you know, the data partners, you know, all the data partners that we sell to, you know, are adding, you know, more things that they're buying from us. So, you know, again, we see, you know, no slow down in that side of the business, you know, either. You know, we are adding a number of people, you know, because, you know, like everything else, you have to get your story out there and in front of the, you know, the right people And someone talked about our enterprise sales. We don't do enterprise sales for POSs, but when it comes to advertising and data, that is an enterprise sale. And we are bringing on a bunch of new people. Some have already started. We have a really great team. And we think it's going to be a sizable part of the business going forward. I don't know if I can give you more clarity than that, but did you have a second question that I missed? I did.

I haven't asked, but I appreciate that color. That's helpful. For mobile top-up, again, another segment that's been incredibly impressive in terms of your recent efforts and kind of propping up traditional communications overall. I'm kind of just wondering how you guys are thinking about growing this business moving forward, whether you're looking at geographic expansion or in, I guess, highlighting some of the unit economics or breaking some of the stuff out or maybe making a push into more of that direct channel versus retail. And I'd be interested in your thoughts there as well.

I mean, I'm going to let Marcelo answer a little bit of the question, you know, because he's been doing more of the work on that in the background in terms of breaking it out and what have you. You know, what I would say is from a sales perspective, And again, I think I also talked about this a little bit last quarter. Again, to a degree, the growth in this business was surprising to us. And we're really putting in place a team sort of as we speak to capitalize on the growth. We've made some small acquisitions in the space that have really helped us grow geographically. And we're looking at some more small acquisitions as well to help enhance the product and the technology. But again, this is a business, again, where we really think that, A, we have a very small piece of the market, and B, we're really right now only a U.S. and Africa player. And we think that there's a ton of market share to be gotten. You know, we intend to, you know, have it be a very, very sizable, you know, and predictable, you know, business.

Yeah, I mean, our mobile top-up business today is a U.S. story. And in our plans, it's really the objective of trying to bring this business to be a large business outside of the U.S. as well in terms of origination. And Antling to Africa more recently has accelerated some of that. At the same time, we are also right now just a one-pony shop. We're only selling mobile products. And really the goal is for that business to be really a leader in all types of digital prepaid offerings. So we are just starting to increase the product portfolio. It's time to add... vouchers and subscriptions into that business. That's a very large opportunity for us. Recently, we've seen some private equity investment into that space. I think we have a company which we know well called WeCharge.com. Just got a nice funding of about $35 million private equity funding into the business. So there's a lot of opportunity and interest in those type of FinTech opportunities. And because we realize that this is becoming an area of large interest. Internally at IDT, we are trying to also carve out the economics of that business away from the rest of the traditional communications products. Not only carve out from an accounting perspective, but even managerially. We are trying to make MTU to become more independent in its operations, in terms of its management team and resources. Today, obviously, the top-up business shares a tremendous amount of resources all across the spectrum with other U.S. offerings, especially Pingless and Money Transfer, same sales force, a lot of the same operations people, a lot of the same technology. in some areas, so we are going through that process. And our ultimate goal is to be able to educate to ourselves, as well as to our investors, how does that business truly look from an economic perspective if it was a carved-out operation. And once we get better at doing that, we'll be glad to share that with our investors.

Great. Yeah, I really appreciate that. That's helpful, and I'm glad you guys are kind of thinking about it that way. And I would echo David's comments as well, and I'm looking forward to watching you guys continue to execute. So thanks again for taking my questions, and great job. Thank you.

Once again, if you have a question, please press star, then 1. Okay, we have a question coming from Kevin Zhang from Tribunal Capital. Your line is live.

Hi, thanks so much for taking the time for my question. I want to echo the thoughts mentioned by Adam and David. I think IDT has a business in challenge of doing great. You guys are executing well. I just had a few questions about mobile top-up in general. So you mentioned that you guys have recently expanded with your acquisition of the African mobile top-up business. I was just curious how that's been going. Like, any color on that acquisition progress? Like, has revenue been inflecting? Any sort of color there would be great.

Yeah, I mean, you know, I'll let, you know, Marcel speak about the specifics, you know, related to the financials of it. You know, from an operational standpoint, I can tell you that, you know, they're being very well integrated, you know, into the into the company. You know, tomorrow, I'm sorry, not tomorrow, Thursday, we have a, you know, a company-wide kickoff, and they will be presenting, you know, about their business to everyone. You know, and they're joining, you know, all of our meetings, you know, that we have with, you know, carriers around the world, you know, and tell them about, you know, their abilities of selling, you know, into Africa, you know, as well as, you know, you know, you know, I'll call it Pan-Africa as well. And, you know, it's been, it's really been a very good, you know, you know, partnership and, you know, they're great guys. So, I mean, we're very happy to have them on board. I'll let Marcelo answer a little bit on the the P&L related to them.

Sure. Hi, Kevin. The company that we acquired is not a new relationship to IDTA. We have been doing business with them for more than a decade. They have been one of the largest aggregators supplying us the mobile top-up L-time for African M&Os for a long time. So effectively, what we have done is we acquired them, a majority stake on them. And by doing that, we have been able to kind of verticalize the relationship. And now we have direct access to the MNOs, which previously we did not. So that improves the cost that we get for airtime for African carriers. And having a lower cost allows our team in the US to price mobile type of offerings better in the marketplace. And by doing so, they'll be able to gain market share and expand the market in the U.S. So they also have, in some ways, platforms, especially on the B2B side, platforms which are probably better than what we had in IET. And we are in the process of incorporating those platforms into ours and taking the best of both. So it's a real good relationship, a relationship we have known for a long time. And the integration, the synergies in pricing, in cost, in approach to go to market have been very strong. And because of the fact that they have put to the ground in several African countries, it also opens our ability to market our products in that continent faster as part of our international growth strategy.

I see. And I would like to add one more thing to what Marcelo said. said is that they on their own have been doing quite well in sales to African carriers, and their own margins have improved.

I see. That's amazing to hear. I'm glad that the integration is going well and that in terms of the P&L, it's also pretty good in terms of reducing costs and verticalizing the relationship. This is for Marcelo specifically. I think you mentioned that there was private equity interest in the business. My internet was a bit shaky, so I'm not sure if I heard it right, like a $35 million funding.

Yeah, I think that recently, if I read correctly, I think there is a company, we know them well and we don't compare them with ours, Recharge.com. I believe they got private equity funding recently, probably around B. for about $35 million. It's just an anecdotal example of the fact that people are interested in this type of mobile top-up and other prepaid digital offerings right now.

Got it. That makes sense. I guess one last question about mobile top-up. I think you guys have talked a lot about how you guys are mostly in the United States right now and domestic, but you're thinking about doing some sort of expansion outwards. And so just looking at like year over year growth, mobile top ups somewhere around like 30, 40%. I'm curious, like, do you think that it's going to trend down from here over the next few years or that it's like an inflection point? And like what, maybe like a general range for where you see this business in like a few years? Like, I know you guys think it'll be big for sure, but just curious in the specific numbers.

I mean, I don't see it. I don't see it trending down. Um, you know, that's for sure. I mean, what, what I would say is that, you know, we need to build out some of the capabilities. to take advantage of the amount of growth that there is out there. And that comes both on the direct-to-consumer side. Again, right now we've been focused on acquiring customers in the U.S., and we haven't focused on acquiring customers outside of the U.S. And that means that we have to hire D2C marketing personnel, essentially, in each of the markets that we go after, because each one of them you know, is different. You know, they all need their own, you know, SEO and SEM, and, you know, they all have their own advertising partners and their own, and then from a technology point of view, you know, you need to be able to accept different payment, you know, types in different countries, you know, and you need to, you know, make sure that, you know, your foreign exchange, you know, is competitive, you know, with whatever's, you know, in those markets. So, again, I think that, you know, it might be, I'll say, you know, not linear, you know, growth internationally. But definitely over time, I think that the, you know, that the amount of growth that we could get from, you know, internationally is, you know, way in excess of, you know, of 30% a year even. You know, I think that that would be, you know, an understatement.

Great. Sorry, I just thought of a new question while you're answering. So one last one for real. Um, so I was thinking in terms of just the take rate for, for mola top up. So I guess two parts of this question, one. So obviously the next, the next expansion, the next step is international, right? I was just curious on the dynamics in terms of the take rate, whether or not like the take rate would kind of trend down internationally and just on average be lower. Um, and I guess the second thing I would ask is just like, in general, I feel like mola top up, obviously you guys have like great cost structure. So you guys are probably getting a better take rate than, than most other mola top up businesses. I'm just curious if you guys see if there's going to be competitive pressure that would push down the take rate, and if you think you guys could be able to fend that off, or if you think that will probably shed some take rate loss over time.

Domestically, I think that we have done a good job of improving, I'll call it, our take rate by moving more of the business to direct-to-consumer and negotiating really good deals. As far as internationally, again, we don't have as much experience with it. We definitely don't think that in every country we're going to be able to get the same take rates that we have here in the U.S., but we think that there are certain countries that have better economics and certain that have worse. We're hoping that when it equalizes out that it will be similar to where the U.S. is, but it might end up being slightly lower.

Got it. All right. Thank you so much. Or did you have something else you wanted to add? Sorry.

No, that was it.

Okay. All right. Great. Thank you so much for taking the time. I think you guys are doing a great job. Keep up the good work. Thank you. Thanks so much. Take care.

Have a good night, everyone. As there are no more questions, this concludes our question and answer session and conference call. Thank you for attending today's presentation. You may now disconnect.