IDT Corporation

Good evening. Welcome to the IDP Corporation's third quarter fiscal 2025 earnings conference call. All participants are now in listen-only mode. A question and answer session will follow management's remarks. Anyone requiring operator assistance during the conference call should press star zero on your telephone keypad. Please note, this conference call is being recorded. I will now turn the call over to Bill Ulrey of IDP Investor Relations. Bill, you may begin.

Thank you, John. In today's presentation, IDT's Chief Executive Officer, Shmuel Jonas, and Chief Financial Officer, Marcel Fisher, will discuss IDT's financial and operational results for the three-month period ended April 30, 2025. After their remarks, they will be happy to take your questions. Any forward-looking statements made during this conference call, either in their remarks or in the Q&A that follows, 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 the presentation or in the Q&A session, IDP's management may make reference to non-GAAP measures, including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per share. Schedules provided in the IDP earnings release reconcile adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per share to the nearest corresponding GAAP measures. Please note that the IDP earnings release is available on the investor relations page of the IDP Corporation website. The earnings release has also been filed on a form 8K with the SEC. Now, I'll turn the call over to Shmuel for his comments on the quarter's results.

Thank you, Bill, and thank you, John, and Marcel. IDP's third quarter was solid, with strong year-over-year gains while slightly softer than our second quarter, in part because of expected seasonal factors. Year-over-year revenue growth and continued expansion of each of our business segments' bottom-line results to have a 133% year-over-year increase in consolidated income from operations, a 57% increase in consolidated adjusted EBITDA, and a 290% increase in EPS. At NRS, recurring revenue increased 23% year-over-year, powered by a 37% revenue increase from NRS's largest vertical merchant services, and a 33% increase in SAS fees. which more than offset a 12% decrease in advertising and data revenue. Income from operations and adjusted EBITDA were both up 29% year-over-year, and the business has generated a record $32 million in adjusted EBITDA over the past 12 months. Looking ahead, we continue to focus on developing new offerings that leverage the NRS platform to enable retailers to compete more effectively with large retail chains. For instance, independent neighborhood retailers have not yet meaningfully benefited from the consumer shift to online ordering and delivery. We are working to change that by integrating our network with online ordering and delivery platforms, enabling retailers on the NRF network to provide hyperfast local delivery of sundries and prepared food. The 100 or so retailers we have signed up so far are already receiving in aggregate over 2,000 delivery orders a week. Boss Money, our remittance platform, increased transactions by 27% and revenue by 25%. The growth rates have been impacted by the deliberate shift we made last summer to prioritize gross profit per transaction in our retail channel rather than market share, and by a recent shift in customer preferences towards larger send amounts per remittance to fewer transactions. The FinTech segment, which includes Boss Money and early-stage FinTech initiatives, generating over $5 million in adjusted EBITDA compared to $244,000 in the year-ago quarter. Looking ahead, Boss Money is working on initiatives to drive sustained long-term growth and innovations that reduce cross-border friction and increase profitability. NetWin continued its steady progress with balanced growth in the U.S., Brazil, and Mexico. The team has done a great job growing its business while holding the line on overhead. NetApple's adjusted EBITDA margins reached 15% in the third quarter of 25. NetApple began to offer its AI agents this quarter, and customers are already seeing the benefits, including enhanced efficiency. Even as we deploy, AI agents are flying for specific market verticals. We're preparing to launch another AI-powered service, which we internally refer to as Coach. We think we'll be very successful. In our traditional communication segment, income from operations and adjusted EBITDA both jumped over 30% year-over-year to $17.3 million and $19.3 million, respectively, underscoring that this segment continues to be a long-term cash generator. At IDT, on a consolidated basis, we continue to scale our three primary growth businesses and their operating leverage in combination with the resilient contributions of our traditional communications businesses, our driving expansion, IDT's cash generation, and earnings. As we enter our budgeting season, we are fortunate to be in a great position to pursue next generation of exciting growth initiatives. I want to wrap up by thanking the millions of customers who put some of their hard-earned dollars to work through our boss offerings and the business customers around the world who rely on us to enhance their businesses and communications. Our ability to provide these services depends on the dedication of our employees who have been executing and innovating on so many fronts. and our stockholders who entrust us with their capital. I am grateful for your continued patronage and support. Thank you.