IDT Corporation

Good evening and welcome to the IDT Corporation Second Quarter Fiscal Year 2023 Earnings Call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the three-month period ended January 31, 2023. During remarks by IDT's Chief Executive Officer, Smule Jones, 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, IDP'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 risk and uncertainties that may cause actual results to differ 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 their 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 the Form 8K with the SEC. I will now turn the conference over to Mr. Jonas.

Thank you, John. Welcome to IDT's earnings conference call. After my remarks, Marcella Fisher, IDT's chief financial officer, will join me and we'll be available to answer your questions. My speeches lately have been a little long, and personally I prefer short and sweet, so today that's what we're going to do. On the second quarter, the three months ended January 31st. You can read a more detailed discussion of our financial and operational results from our earnings release filed earlier today or our Form 10-Q that we expect to file with the Securities and Exchange Commission early next week. NRS, Boss Money, and Etfone are three primary high-growth businesses, again, performed very well this quarter. Their formula is simple, deliver exceptional value and superior customer experiences. I'm pleased that they continued on their growth trajectories while remaining very focused on improving their bottom lines. Each of these businesses grew robustly in the second quarter. NRES added approximately 1,600 net new terminals this quarter, a record increase, and more than doubled its recurring revenue. The revenue increase was led by a year-over-year jump in advertising and data sales, which grew by 130%. NetPhone achieved 30% year-over-year subscription revenue growth, including a 35% increase in our Latin American markets and a 23% increase in our U.S. market. At Boss Money, transaction volumes through both our retail and direct-to-consumer sales channels increased by 39% year-over-year as we continue to leverage the synergies between these two channels. Led by the contributions of these three businesses, IDT delivered significant year-over-year increases in quarterly adjusted EBITDA, up 25% to $23 million, in income from operations, up 32% to $18 million, and in earnings, which more than doubled to $0.56 per share. Our strong operating results this past quarter enabled us to further strengthen our balance sheet. At the quarter's end, we had over $156.8 million in cash, cash equivalents, debt securities, and current equity investments, an increase of nearly $20 million over the first three months. Once again, we had no debt. I want to wrap up by thanking our stockholders, both our long-term investors and those that are new to our story, for putting their faith and their capital with us. And finally, a huge thank you to our employees, some of whom continue to work under difficult conditions overseas for their many contributions above and beyond the ordinary. The best thing about IT is our amazing team whose hard work and innovative spirit powers all our progress. Now Marcelo and I will 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 one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. We will now pause momentarily to assemble our roster. The first question comes from David Polanski with Immersion Investments.