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CONTACT IDT Corporation Investor RelationsBill Ulrey william.ulrey@idt.net973-438-3838 IDT CORPORATION CONSOLIDATED BALANCE SHEETS January 31,2025 July 31,2024 (Unaudited) (in thousands, except per share data) Assets Current assets: Cash and cash equivalents $142,152 $164,557 Restricted cash and cash equivalents 105,554 90,899 Debt securities 23,852 23,438 Equity investments 5,091 5,009 Trade accounts receivable, net of allowance for credit losses of $7,295 at January 31, 2025 and $6,352 at July 31, 2024 45,127 42,215 Settlement assets, net of reserve of $1,804 at January 31, 2025 and $1,866 at July 31, 2024 41,779 22,186 Disbursement prefunding 57,676 30,736 Prepaid expenses 15,989 17,558 Other current assets 24,914 25,927 Total current assets 462,134 422,525 Property, plant, and equipment, net 38,380 38,652 Goodwill 26,149 26,288 Other intangibles, net 5,583 6,285 Equity investments 6,748 6,518 Operating lease right-of-use assets 2,498 3,273 Deferred income tax assets, net 22,333 35,008 Other assets 11,903 11,546 Total assets $575,728 $550,095 Liabilities, redeemable noncontrolling interest, and equity Current liabilities: Trade accounts payable $22,482 $24,773 Accrued expenses 89,472 103,176 Deferred revenue 28,384 30,364 Customer funds deposits 104,720 91,893 Settlement liabilities 16,975 12,764 Other current liabilities 16,157 16,374 Total current liabilities 278,190 279,344 Operating lease liabilities 1,349 1,533 Other liabilities 1,093 2,662 Total liabilities 280,632 283,539 Commitments and contingencies Redeemable noncontrolling interest 11,228 10,901 Equity: IDT Corporation stockholders’ equity: Preferred stock, $.01 par value; authorized shares—10,000; no shares issued — — Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and 1,574 shares outstanding at January 31, 2025 and July 31, 2024 33 33 Class B common stock, $.01 par value; authorized shares—200,000; 28,233 and 28,177 shares issued and 23,491 and 23,684 shares outstanding at January 31, 2025 and July 31, 2024, respectively 282 282 Additional paid-in capital 306,781 303,510 Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,742 and 4,493 shares of Class B common stock at January 31, 2025 and July 31, 2024, respectively (137,475) (126,080)Accumulated other comprehensive loss (19,599) (18,142)Retained earnings 121,573 86,580 Total IDT Corporation stockholders’ equity 271,595 246,183 Noncontrolling interests 12,273 9,472 Total equity 283,868 255,655 Total liabilities, redeemable noncontrolling interest, and equity $575,728 $550,095 IDT CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months EndedJanuary 31, Six Months EndedJanuary 31, 2025 2024 2025 2024 (in thousands, except per share data) Revenues $303,349 $296,098 $612,915 $597,302 Direct cost of revenues 191,239 199,171 393,178 406,382 Gross profit 112,110 96,927 219,737 190,920 Operating expenses (gain): Selling, general and administrative (i) 70,721 67,346 141,772 131,723 Technology and development (i) 12,612 12,925 25,372 25,335 Severance 233 345 410 869 Other operating expense (gain), net 227 294 227 (190)Total operating expenses 83,793 80,910 167,781 157,737 Income from operations 28,317 16,017 51,956 33,183 Interest income, net 1,354 1,195 2,782 2,039 Other income (expense), net 207 2,534 (76) (3,053)Income before income taxes 29,878 19,746 54,662 32,169 Provision for income taxes (7,665) (3,992) (13,967) (7,939)Net income 22,213 15,754 40,695 24,230 Net income attributable to noncontrolling interests (1,944) (1,329) (3,178) (2,146)Net income attributable to IDT Corporation $20,269 $14,425 $37,517 $22,084 Earnings per share attributable to IDT Corporation common stockholders: Basic $0.81 $0.57 $1.49 $0.88 Diluted $0.80 $0.57 $1.48 $0.87 Weighted-average number of shares used in calculation of earnings per share: Basic 25,161 25,175 25,182 25,176 Diluted 25,324 25,317 25,343 25,297 (i) Stock-based compensation included in: Selling, general and administrative expense $768 $2,357 $1,602 $2,998 Technology and development expense $95 $130 $172 $260 IDT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months EndedJanuary 31, 2025 2024 (in thousands) Operating activities Net income $40,695 $24,230 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,490 10,146 Deferred income taxes 12,674 5,787 Provision for credit losses, doubtful accounts receivable, and reserve for settlement assets 2,472 1,696 Stock-based compensation 1,774 3,258 Other 1,077 2,829 Changes in assets and liabilities: Trade accounts receivable (4,978) (7,040)Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets (46,244) 9,966 Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities (11,844) (6,200)Customer funds deposits 15,701 15 Deferred revenue (1,500) (1,381)Net cash provided by operating activities 20,317 43,306 Investing activities Capital expenditures (10,100) (8,885)Purchase of convertible preferred stock in equity method investment (673) (1,009)Purchases of debt securities and equity investments (15,997) (19,357)Proceeds from maturities and sales of debt securities and redemption of equity investments 16,751 31,231 Net cash (used in) provided by investing activities (10,019) 1,980 Financing activities Dividends paid (2,524) — Distributions to noncontrolling interests (50) (59)Proceeds from borrowings under revolving credit facility 24,534 30,588 Repayment of borrowings under revolving credit facility (24,534) (30,588)Purchase of restricted shares of net2phone common stock — (3,558)Proceeds from exercise of stock options — 172 Repurchases of Class B common stock (11,395) (3,170)Net cash used in financing activities (13,969) (6,615)Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents (4,079) (3,182)Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (7,750) 35,489 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 255,456 198,823 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $247,706 $234,312 Supplemental Schedule of Non-Cash Financing Activities Shares of the Company’s Class B common stock issued to an executive officer for bonus payment $1,824 $— Value of the Company’s Class B common stock exchanged for National Retail Solutions shares $— $6,254 *Reconciliation of Non-GAAP Financial Measures for the Second Quarter Fiscal 2025 and 2024 In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), IDT also disclosed for 2Q25, 1Q25, and 2Q24, Adjusted EBITDA, and for 2Q25 and 2Q24, non-GAAP earnings per diluted share (Non-GAAP EPS).
Key Businesses / Segments NRS Recurring revenue**: +32% to $31.6 million;Income from operations: +71% to $9.1 million;Adjusted EBITDA: +65% to $10.1 million;Rule of 40’ score**: 55 BOSS Money / Fintech segment BOSS Money transactions: +36% to 5.7 million;BOSS Money revenue: +34% to $33.5 million;Fintech segment gross profit: +35% to $21.7 million;Fintech segment income from operations: increased to $3.1 million from a loss of $(0.7) million;Fintech segment Adjusted EBITDA: increased to $3.9 million from a loss of $(12) thousand; net2phone Subscription revenue**: +9% to $21.0 million (+14% on a constant currency basis);Income from operations: increased to $1.1 million from $0.4 million;Adjusted EBITDA: +55% to $2.9 million; Traditional Communications Gross profit: +2% to $43.1 million;Income from operations: +24% to $18.1 million;Adjusted EBITDA: +19% to $20.2 million; IDT Consolidated Revenue: +2% to $303.3 million;Gross profit (GP) / margin: GP +16% to $112 million; GP margin +420 bps to 37.0%;Income from operations: +77% to $28.3 million;Net income attributable to IDT: +41% to $20.3 million;GAAP EPS: Increased to $0.80 from $0.57;Non-GAAP net income: +26% to $21.3 million;Non-GAAP EPS: Increased to $0.84 from $0.67;Adjusted EBITDA: +56% to $34.0 million;CapEx: +6% to $4.8 million;Stock buyback: Repurchased 179,338 shares of IDT Class B common stock in market transactions during 2Q25 for $8.5 million at an average share price of $47.59;Common stock dividend: IDT increased its quarterly dividend from $0.05 to $0.06.
Operating margin is useful for evaluating current period profitability relative to sales, for comparisons to prior period performance, for forecasting future income from operations levels based on projected levels of sales, and for comparing net2phone’s relative profitability to its competitors and peers.net2phone’s Adjusted EBITDA margin is calculated by dividing net2phone’s Adjusted EBITDA, a Non-GAAP measure, by net2phone’s GAAP revenue for the comparable quarter or period.
