IDT Corporation

Good evening and welcome to the IDT Corporation's fourth quarter and full fiscal year 2023 earnings call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the three and 12-month periods ended July 31st, 2023. During 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 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 IDT's 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 earnings conference call. After my remarks, Marcelo Fisher will be joining me virtually. First of all, I just want to say it's really been a very hard week, a really tragic week in Israel, and our thoughts and prayers are with our family, our friends, our colleagues, some of who are on the front lines, and may they, God willing, be safe. My brief remarks today focus on the fourth quarter of fiscal year 2023 and the three months end of July 31st. For more detailed discussion of our financial and operational results for the fourth quarter and full fiscal year 2023, please read our earnings release filed earlier today and our Form 10-K that we expect to file with the SEC on Monday. Our results this quarter were highlighted by the continued expansion of our three high-growth, high-margin businesses, while our traditional communications segment performed as expected. At NRS, we have ramped up our investment to accelerate the growth of the NRS terminal and payment networks, and we delivered record quarterly increases in both net new terminals and net new NRS pay accounts. With that tailwind, merchant services Q4 revenue increased 79% year over year. Advertising and data revenue, while 40% below the year-ago peak, improved sequentially. And advertising and data revenue increased 7% from the prior quarter and is on track for a larger sequential increase in the current quarter. NRS results also reflected our investment in growth initiatives, including development of new features and functionalities, as well as our new tablet POS. At Net-to-Phone, subscription revenue increased 19% year-over-year, powered by the increase in seats served and an increase in average subscription revenue per seat in Latin America. Here, too, we are investing in initiatives to expand the business. In the coming quarters, we are preparing to roll out two exciting premium services, NetPhone AI and Call Center Essentials, that we expect to enhance ARPU and margins across our markets. Within our FinTech segment, Boss Money, our international remittance business, continued to benefit from the synergies between its retail and direct-to-consumer channels and from our cross-marketing programs within the larger Boss ecosystem. Also in our FinTech segment, we've begun enrolling customers in our new mobile banking app, Elroy. Elroy is replete with innovative features to help underbanked and unbanked customers integrate into the U.S. financial mainstream while appealing to anyone who despises bank fees but appreciates financial convenience. Within our traditional communications segment, we are working to further streamline the operations of our boss revolution calling in IDT global businesses while pushing new initiatives to return our IDT digital payments business to growth. Last week, the chance recording Delaware dismissed all claims against IDT in the class action lawsuit related to the Straight Path sale and found that the plaintiff and the class suffered no damage. We appreciate the time the court invested in resolving this matter and salute our legal team whose sound judgment and tireless efforts proved invaluable throughout the course of the litigation. As we noted in our earnings release, we continued to buy back our stock in the fourth quarter and after the start of fiscal 2024, consistent with our view that the plaintiff's claims in this case were premised on flawed assumptions and that justice would prevail, as well as the fact that we thought our stock was very undervalued, especially given the strong performance of our three high-growth businesses. Before we move on to the Q&A, I want to again thank our employees for their great work and our stockholders for putting their faith and their capital with us. Now Marcel 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 1 on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the star keys. To withdraw your question, please press star, then two. We will now pause momentarily to assemble our roster. Okay, our first question comes from Alex Rohr with Emmett. Please proceed.