IDT Corporation

Good evening. Welcome to the IDT Corporation's second quarter fiscal year 2026 earnings conference call. All participants are now in a 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 Lowry of IDT Investor Relations. Bill, you may begin.

Thank you, John. In today's presentation, IDT's Chief Executive Officer, Shmuel Jonas, and Chief Financial Officer, Marcelo Fisher, will discuss IDT's financial and operational results for the three months ended January 31st, 2026. 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 during the Q&A that follows, whether general or specific in nature, are subject to risks 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 adjusted measures, including adjusted EBITDA, adjusted EBITDA margin, non-GAAP earnings per share, NRS's rule of 40 score, and adjusted net cash provided by operating activities. Schedules provided in the IDT earnings release reconcile these non-GAAP measures to their 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 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 to everyone who joined the call. NRS and Boston's money and Netafone's top and bottom lines expansion drove IDT's strong overall results again this quarter. NRS recurring revenue grew year over year, powered by large increases in merchant services and SaaS fee revenues. This quarter, we continue to make progress on initiatives to drive additional merchant services and SaaS growth and expand our delivery partnerships. We are also developing offerings for differentiated retailer verticals. Advertising and data results came in lower than we expected after decreases in CPM rates pressured revenues. At Boss Money, our digital channel continued to outperform relative to the industry as transactions increased 17% year over year. The new federal remittance tax, which applies mainly to transactions originated with cash, went into effect on January 1st. As expected, the tax implementation has accelerated customer migration from the lower margin retail channel to the higher margin digital channel, and you will begin to see those positive impacts next quarter. Thank you. NetPhone's bottom line continues to benefit from its strengthening gross margins and operating leverage, and this quarter we also got a boost from favorable foreign exchange rates. Looking ahead, our AI offerings are generating very positive customer reviews and increased spend. Based on these early results, we are writing a new offering, Agentic AI, seamlessly integrated with unified communications, with a go-to-market strategy targeting both direct and channel sales to small and medium businesses. Traditional communications remained a strong cash generator, The segment contributed $19 million in adjusted EBITDA during the second quarter, a decrease from the year-ago quarter, but approximately the same as in the prior two quarters. Because of our recent strong financial and operational performance growth and outlook and balance sheet, we again repurchased stock in the second quarter, and our board has increased our annual dividend by 17% to $0.28 per year. Now, Marcella, who is more of a gifted orator than I, will discuss our financial results. I also just can't go without saying that our hearts and prayers are with all of our soldiers abroad, and we hope that you come home safely.