IDT Corporation

Good evening and welcome to the IDT Corporation's third 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 April 30th, 2023. During remarks by IDT's Chief Executive Officer, Shmuel John S., all participants will be in a 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 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. Hi, thank you very much, Operator.

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 questions. My brief remarks today focus on the third quarter of our fiscal year 2023. The three months ended April 30th. For more detailed discussion of 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. For the third quarter of our 2023 fiscal year, IDT generated year-over-year increases in growth profits adjusted EBITDA and EPS, highlighted by the continued expansion of our three high-growth, high-margin businesses and by the relatively resilient cash flows from our traditional communications segment, even as revenue from this segment continued to decline. NRS added new POS terminals and payment processing accounts at a record pace this quarter, and achieved solid year-over-year increases in all three of its recurring revenue verticals, as well as in recurring revenue per terminal. Advertising revenue decreased sequentially due to seasonal reductions in demand and the advertising industry's pullback, particularly in the digital out-of-home segment. Behind the scenes, we're enhancing our advertising platform and diversifying our network partnerships pursue new opportunities, both within and outside of the digital out-of-home market. This foundational work should pay off when advertising demand rebounds. Given our success in accelerating the pace of new payment processing account sign-ups, increasing merchant services ARPU, and bringing new premium features to our platform, we expect that NRS will continue to perform extremely well. At NetDefone, we increase subscription revenue by 20% year-over-year while approaching cash flow break-even. In the coming weeks, we expect to launch exciting new offerings and features that will help to build our momentum, including NetDefone AI, which includes powerful analytical tools powered by artificial intelligence technology. At Boss Money Remittance, volume increased by 38% year-over-year, driving a 29% revenue increase. I'm especially pleased by the robust growth of Boss Money's retail channel over the past few quarters. Throughout the rest of the Boss ecosystem, the synergies between retail and direct-to-consumer drive better economics than we could achieve with a single approach. We believe that the same will be true for their money remittances. For that reason, we continue to focus on retail channel expansion as we invest to achieve scale and long-term profitability. With our diverse mix of businesses backed by a solid balance sheet and with no debt, IDT is positioned to continue delivering solid results across a wide variety of economic conditions while returning value to our stockholders. Before we move on to the Q&A, I want to thank our employees for their great work and thank our stockholders for putting their faith and their capital with us. Now, Marcelo and I will be happy to take your questions.