GAAP EPS of
Cash, cash equivalents, debt securities, and current equity investments totaled
Initiates quarterly dividend of
HIGHLIGHTS
(Throughout this release, unless otherwise noted, results are for the second quarter of fiscal year 2024 (2Q24) and are compared to the second quarter of fiscal year 2023 (2Q23). All earnings per share (EPS) and other ‘per share’ results are per diluted share.)
- National Retail Solutions (NRS) added approximately 1,500 net active point-of-sale (POS) terminals during 2Q24 to reach approximately 28,700 as of
January 31 st. NRS recurring revenue** increased 30% to$23.9 million ; - BOSS Money, the principal business in IDT’s Fintech segment, increased revenue 42% to
$25.0 million while increasing remittance volume by 37% to 4.2 million transactions during 2Q24; - net2phone added approximately 11,000 net seats served during 2Q24 to reach approximately 375,000 as of
January 31 st. Subscription revenue** increased 19% to$19.3 million . Income from operations increased to$0.4 million and Adjusted EBITDA* increased 126% to$1.8 million ; - Consolidated revenue decreased 6% to
$296 million from$314 million ; - Consolidated gross profit*** increased 8% to a record
$97 million from$90 million , and the consolidated gross profit margin increased 410 basis points to 32.9% from 28.8%; - Consolidated income from operations decreased 12% to
$16.0 million from$18.2 million ; - Net income attributable to IDT decreased slightly to
$14.4 million from$14.6 million ; - Consolidated Adjusted EBITDA* decreased 7% to
$21.8 million from$23.4 million ; - GAAP EPS was unchanged at
$0.57 and Non-GAAP EPS* increased to$0.67 from$0.62 . - IDT’s Board of Directors has initiated a quarterly cash dividend of
$0.05 per share of its Class A and ClassB Common stock. The initial dividend will be paid on or aboutMarch 27 th with a record date ofMarch 19 th.
(See ‘Notes’ later in this release for supplemental information on asterisked metrics).
REMARKS BY SHMUEL JONAS, CEO
“The second quarter was highlighted by the continued expansion of our growth businesses, with both NRS and BOSS Money surpassing the
“NRS continued to deliver robust recurring revenue per terminal. We again saw strong growth in Merchant Services and SaaS revenues, and increased Merchant Services revenue per NRS Pay account. We added approximately 1500 net new terminals to the NRS network this quarter.
“BOSS Money delivered another quarter of impressive results, with 42% year-over-year revenue growth. Its improving economics helped our Fintech segment to achieve Adjusted EBITDA break-even for the quarter.
“I am also very pleased with net2phone increasing subscription revenue 19% year over year and achieving cash flow break-even – which we measure as Adjusted EBITDA less CapEx. Together, our combined growth segments propelled IDT to achieve another quarter of record consolidated gross profit and increased gross margin.
“The businesses within our
“Now, I want to provide some context to our Board’s decision to initiate a quarterly cash dividend.
“NRS, BOSS Money and net2phone no longer need new cash investments to fund their organic growth. In aggregate, they have become significant contributors to our bottom line. Meanwhile, we expect cash flows from our
“In light of our robust financial position and positive outlook, the Board felt that we should supplement our ongoing program of opportunistic stock buybacks, which can vary from quarter to quarter, with a regular, predictable dividend payment to our stockholders.”
CONSOLIDATED RESULTS
IDT Consolidated Results ($ in millions, except gross profit margin and EPS) | |||||||
2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 2Q24-2Q23 Variance | ||
Revenue | (5.7)% | ||||||
Gross profit*** | +7.7% | ||||||
Gross profit margin | 32.9% | 31.4% | 30.0% | 29.4% | 28.8% | +410 bps | |
SG&A | +12.0% | ||||||
Income from operations | (11.9)% | ||||||
Adjusted EBITDA* | (7.0)% | ||||||
Net income attributable to IDT | |||||||
EPS (diluted) | NC | ||||||
Non-GAAP EPS* (diluted) | |||||||
RESULTS BY SEGMENT
National Retail Solutions (NRS)
During 2Q24 and 2Q23, the NRS segment contributed 8.5% and 6.3% of IDT’s consolidated revenue, respectively.
National Retail Solutions (NRS) (Terminals and accounts at end of period. $ in millions, except for revenue per terminal) | ||||||||||||||
2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 2Q24-2Q23 Variance | |||||||||
Terminals and payment processing accounts | ||||||||||||||
Active POS terminals | 28,700 | 27,200 | 25,700 | 23,900 | 22,400 | +28.5 | % | |||||||
Payment processing accounts | 18,200 | 17,100 | 15,800 | 14,100 | 12,500 | +45.2 | % | |||||||
Recurring revenue | ||||||||||||||
Merchant Services and other | $ | 12.5 | $ | 11.4 | $ | 10.3 | $ | 8.7 | $ | 7.4 | +68.1 | % | ||
Advertising & Data | $ | 8.7 | $ | 8.5 | $ | 6.2 | $ | 5.8 | $ | 9.0 | (3.0 | )% | ||
SaaS Fees | $ | 2.7 | $ | 2.5 | $ | 2.3 | $ | 2.1 | $ | 1.9 | +40.0 | % | ||
Total recurring revenue | $ | 23.9 | $ | 22.4 | $ | 18.8 | $ | 16.5 | $ | 18.3 | +30.4 | % | ||
POS Terminal Sales | $ | 1.3 | $ | 1.6 | $ | 1.1 | $ | 1.6 | $ | 1.5 | (11.3 | )% | ||
Total revenue | $ | 25.2 | $ | 24.0 | $ | 19.9 | $ | 18.1 | $ | 19.8 | +27.2 | % | ||
Monthly average recurring revenue per terminal** | $ | 285 | $ | 282 | $ | 253 | $ | 237 | $ | 283 | +0.7 | % | ||
Gross profit | $ | 22.6 | $ | 20.9 | $ | 17.4 | $ | 15.1 | $ | 17.2 | +31.0 | % | ||
SG&A | $ | 17.2 | $ | 15.4 | $ | 15.6 | $ | 13.0 | $ | 11.9 | +45.3 | % | ||
Income from operations | $ | 5.3 | $ | 5.5 | $ | 1.7 | $ | 2.1 | $ | 5.4 | (0.5 | )% | ||
Adjusted EBITDA* | $ | 6.1 | $ | 6.2 | $ | 2.4 | $ | 2.7 | $ | 6.0 | +2.7 | % | ||
Take-Aways:
- During 2Q24, NRS added approximately 1,500 net active terminals to reach approximately 28,700 and added approximately 1,100 net payment processing accounts to reach approximately 18,200.
- The 68% year-over-year increase in Merchant Services and other revenue reflects both the increases in payment processing accounts and merchant services revenue per payment processing account.
- Monthly average recurring revenue per terminal** increased slightly year-over-year reflecting the increases in Merchant Services and other and SaaS Fees revenues per terminal.
net2phone
During 2Q24 and 2Q23, the net2phone segment contributed 6.9% and 5.7% of IDT’s consolidated revenue, respectively.
net2phone (Seats in thousands at end of period. $ in millions) | |||||||
2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 2Q24-2Q23 Variance | ||
Seats | 375 | 364 | 352 | 340 | 327 | +14.7% | |
Revenue | |||||||
Subscription revenue** | +18.5% | ||||||
Other revenue | (30.7)% | ||||||
Total Revenue | +14.4% | ||||||
Gross profit | +15.4% | ||||||
SG&A | +8.9% | ||||||
Income (loss) from operations | |||||||
Adjusted EBITDA* | |||||||
Take-Aways:
- Contact center as a service (CCaaS) seats served increased 23% year-over-year to approximately 11,000.
- net2phone’s sequential and year-over-year increases in unified communications as a service (UCaaS) seats served were powered by continued expansion in key markets led by the
U.S. ,Brazil , andMexico . - The 18.5% increase in subscription revenue was driven by an increase in seats served augmented by an increase in average recurring revenue per seat (ARPU). The ARPU increase reflects, in part, the faster rate of CCaaS seat expansion compared to UCaaS seats.
Fintech
During 2Q24 and 2Q23, the Fintech segment contributed 9.4% and 6.5% of IDT’s consolidated revenue, respectively.
Fintech (Transactions in millions. $ in millions except for revenue per transaction) | |||||||
2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 2Q24-2Q23 Variance | ||
BOSS Money Transactions | 4.2 | 4.0 | 3.8 | 3.3 | 3.1 | +37.1% | |
Fintech Revenue | |||||||
BOSS Money | +41.9% | ||||||
Other | +10.3% | ||||||
Total Revenue | +37.7% | ||||||
Average revenue per transaction** | +3.5% | ||||||
Gross profit | +31.1% | ||||||
SG&A | +25.3% | ||||||
Loss from operations | |||||||
Adjusted EBITDA* | |||||||
Take-Aways:
- The 37% year-over-year increase in BOSS Money transactions comprised a 36% increase in digital transactions and a 43% increase in retail transactions. The latter was driven by expansion of the BOSS Money retail agent network.
- BOSS Money revenue increased 42% driven primarily by cross-marketing within the larger BOSS ecosystem, an expansion of the BOSS Money retailer network, and ongoing efforts to enhance user-experience within the BOSS Money and Boss Calling apps.
- The continued growth of BOSS Money transaction volumes and improving unit economics drove the Fintech segment’s year-over-year and sequential improvements in loss from operations and Adjusted EBITDA.
During 2Q24 and 2Q23, the
($ in millions) | |||||||||||||
2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 2Q24-2Q23 Variance | ||||||||
Revenue | |||||||||||||
IDT Digital Payments | $ | 99.6 | $ | 100.0 | $ | 100.8 | $ | 101.0 | $ | 106.1 | (6.1 | )% | |
BOSS Revolution Calling | $ | 66.7 | $ | 71.2 | $ | 75.4 | $ | 77.6 | $ | 82.8 | (19.5 | )% | |
$ | 48.7 | $ | 52.0 | $ | 55.6 | $ | 54.5 | $ | 58.6 | (16.9 | )% | ||
Other | $ | 7.5 | $ | 7.5 | $ | 8.2 | $ | 7.9 | $ | 8.4 | (11.2 | )% | |
Total Revenue | $ | 222.5 | $ | 230.7 | $ | 240.0 | $ | 241.0 | $ | 256.0 | (13.1 | )% | |
Gross profit | $ | 42.3 | $ | 42.6 | $ | 44.7 | $ | 45.4 | $ | 46.7 | (9.4 | )% | |
SG&A | $ | 27.3 | $ | 26.6 | $ | 28.4 | $ | 28.2 | $ | 29.5 | (7.3 | )% | |
Income from operations | $ | 14.6 | $ | 15.4 | $ | 14.1 | $ | 12.9 | $ | 17.0 | (14.0 | )% | |
Adjusted EBITDA* | $ | 17.0 | $ | 18.1 | $ | 18.6 | $ | 19.7 | $ | 19.6 | (13.2 | )% | |
Take-Aways:
- As in recent prior quarters, the year-over-year decrease in IDT Digital Payments’ revenue was due to the deterioration of a key international mobile top-up corridor. By 1Q24, however, that corridor was no longer a significant factor in current results
Traditional Communications revenue continued to decrease in line with expectations while the segment’s gross profits have been comparatively more durable.- IDT continues to streamline the operations of its Boss Revolution and
IDT Global businesses and expects this effort will drive reductions in SG&A in the coming quarters.
OTHER FINANCIAL RESULTS
Consolidated results for all periods presented include corporate overhead. Corporate G&A expense increased to
As of
Net cash provided by operating activities during 2Q24 was
Capital expenditures decreased to
IDT EARNINGS ANNOUNCEMENT INFORMATION
This release is available for download in the “Investors & Media” section of the
IDT will host an earnings conference call beginning at
A replay of the conference call will be available approximately three hours after the call concludes through
NOTES
*Adjusted EBITDA and Non-GAAP EPS are Non-GAAP financial measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measures later in this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measures.
**See ‘Explanation of Key Performance Metrics’ at the end of this release.
*** IDT now includes depreciation and amortization expense in direct cost of revenues or SG&A expense, as appropriate, and reports gross profit and gross margin in accordance with GAAP. Results for all prior periods presented have been reclassified to conform to the current period’s presentation.
ABOUT
All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the
CONTACT
IDT Corporation Investor Relations
william.ulrey@idt.net
973-438-3838
CONSOLIDATED BALANCE SHEETS
2024 | 2023 | |||||||
(Unaudited) | ||||||||
(in thousands, except per share data) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 141,081 | $ | 103,637 | ||||
Restricted cash and cash equivalents | 93,231 | 95,186 | ||||||
Debt securities | 31,419 | 42,414 | ||||||
Equity investments | 5,076 | 6,198 | ||||||
Trade accounts receivable, net of allowance for credit losses of | 37,392 | 32,092 | ||||||
Settlement assets, net of reserve of | 17,200 | 32,396 | ||||||
Disbursement prefunding | 27,749 | 30,113 | ||||||
Prepaid expenses | 23,523 | 16,638 | ||||||
Other current assets | 30,905 | 28,394 | ||||||
Total current assets | 407,576 | 387,068 | ||||||
Property, plant, and equipment, net | 38,713 | 38,655 | ||||||
26,318 | 26,457 | |||||||
Other intangibles, net | 7,026 | 8,196 | ||||||
Equity investments | 7,558 | 9,874 | ||||||
Operating lease right-of-use assets | 5,079 | 5,540 | ||||||
Deferred income tax assets, net | 18,313 | 24,101 | ||||||
Other assets | 11,195 | 10,919 | ||||||
Total assets | $ | 521,778 | $ | 510,810 | ||||
Liabilities, redeemable noncontrolling interest, and equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 21,514 | $ | 22,231 | ||||
Accrued expenses | 107,181 | 110,796 | ||||||
Deferred revenue | 33,803 | 35,343 | ||||||
Customer deposits | 87,553 | 86,481 | ||||||
Settlement liabilities | 15,789 | 21,495 | ||||||
Other current liabilities | 19,194 | 17,761 | ||||||
Total current liabilities | 285,034 | 294,107 | ||||||
Operating lease liabilities | 2,448 | 2,881 | ||||||
Other liabilities | 3,716 | 3,354 | ||||||
Total liabilities | 291,198 | 300,342 | ||||||
Commitments and contingencies | ||||||||
Redeemable noncontrolling interest | 10,693 | 10,472 | ||||||
Equity: | ||||||||
Preferred stock, | — | — | ||||||
Class A common stock, | 33 | 33 | ||||||
Class B common stock, | 281 | 279 | ||||||
Additional paid-in capital | 300,631 | 301,408 | ||||||
(118,631 | ) | (115,461 | ) | |||||
Accumulated other comprehensive loss | (17,276 | ) | (17,192 | ) | ||||
Retained earnings | 46,746 | 24,662 | ||||||
211,784 | 193,729 | |||||||
Noncontrolling interests | 8,103 | 6,267 | ||||||
Total equity | 219,887 | 199,996 | ||||||
Total liabilities, redeemable noncontrolling interest, and equity | $ | 521,778 | $ | 510,810 |
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Revenues | $ | 296,098 | $ | 313,936 | $ | 597,302 | $ | 635,752 | ||||||||
Direct cost of revenues | 198,699 | 223,499 | 405,475 | 456,170 | ||||||||||||
Gross profit | 97,399 | 90,437 | 191,827 | 179,582 | ||||||||||||
Operating expenses (gains): | ||||||||||||||||
Selling, general and administrative (i) | 80,743 | 72,060 | 157,965 | 141,679 | ||||||||||||
Severance | 345 | 213 | 869 | 312 | ||||||||||||
Other operating expense (gain), net | 294 | (17 | ) | (190 | ) | (816 | ) | |||||||||
Total operating expenses | 81,382 | 72,256 | 158,644 | 141,175 | ||||||||||||
Income from operations | 16,017 | 18,181 | 33,183 | 38,407 | ||||||||||||
Interest income, net | 1,195 | 810 | 2,039 | 1,320 | ||||||||||||
Other income (expense), net | 2,534 | 1,613 | (3,053 | ) | (2,229 | ) | ||||||||||
Income before income taxes | 19,746 | 20,604 | 32,169 | 37,498 | ||||||||||||
Provision for income taxes | (3,992 | ) | (5,295 | ) | (7,939 | ) | (9,634 | ) | ||||||||
Net income | 15,754 | 15,309 | 24,230 | 27,864 | ||||||||||||
Net income attributable to noncontrolling interests | (1,329 | ) | (686 | ) | (2,146 | ) | (2,239 | ) | ||||||||
Net income attributable to | $ | 14,425 | $ | 14,623 | $ | 22,084 | $ | 25,625 | ||||||||
Earnings per share attributable to | ||||||||||||||||
Basic | $ | 0.57 | $ | 0.57 | $ | 0.88 | $ | 1.00 | ||||||||
Diluted | $ | 0.57 | $ | 0.57 | $ | 0.87 | $ | 1.00 | ||||||||
Weighted-average number of shares used in calculation of earnings per share: | ||||||||||||||||
Basic | 25,175 | 25,510 | 25,176 | 25,556 | ||||||||||||
Diluted | 25,317 | 25,538 | 25,297 | 25,577 | ||||||||||||
(i) Stock-based compensation included in selling, general and administrative expenses | $ | 2,487 | $ | 1,286 | $ | 3,258 | $ | 1,858 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended | ||||||||
2024 | 2023 | |||||||
(in thousands) | ||||||||
Operating activities | ||||||||
Net income | $ | 24,230 | $ | 27,864 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 10,146 | 9,801 | ||||||
Deferred income taxes | 5,787 | 7,788 | ||||||
Provision for credit losses, doubtful accounts receivable, and reserve for settlement assets | 1,696 | 915 | ||||||
Net unrealized loss from marketable securities | 1,234 | 2,349 | ||||||
Stock-based compensation | 3,258 | 1,858 | ||||||
Other | 1,595 | 1,359 | ||||||
Change in assets and liabilities: | ||||||||
Trade accounts receivable | (7,040 | ) | 2,483 | |||||
Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets | 9,966 | 2,323 | ||||||
Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities | (12,021 | ) | (19,344 | ) | ||||
Customer deposits at | 2,253 | 15 | ||||||
Deferred revenue | (1,381 | ) | (1,795 | ) | ||||
Net cash provided by operating activities | 39,723 | 35,616 | ||||||
Investing activities | ||||||||
Capital expenditures | (8,885 | ) | (10,578 | ) | ||||
Purchase of convertible preferred stock in equity method investment | (1,009 | ) | — | |||||
Payments for acquisition | (60 | ) | — | |||||
Purchases of debt securities and equity investments | (19,357 | ) | (28,129 | ) | ||||
Proceeds from maturities and sales of debt securities and redemptions of equity investments | 31,231 | 27,531 | ||||||
Net cash provided by (used in) investing activities | 1,920 | (11,176 | ) | |||||
Financing activities | ||||||||
Distributions to noncontrolling interests | (59 | ) | (187 | ) | ||||
Proceeds from other liabilities | 100 | 300 | ||||||
Repayment of other liabilities. | (15 | ) | (2,014 | ) | ||||
Proceeds from borrowings under revolving credit facility | 30,588 | 2,383 | ||||||
Repayment of borrowings under revolving credit facility. | (30,588 | ) | (2,383 | ) | ||||
Proceeds from exercise of stock options | 172 | 172 | ||||||
Repurchases of Class B common stock | (3,170 | ) | (5,341 | ) | ||||
Net cash used in financing activities | (2,972 | ) | (7,070 | ) | ||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents | (3,182 | ) | 746 | |||||
Net increase in cash, cash equivalents, and restricted cash and cash equivalents | 35,489 | 18,116 | ||||||
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 198,823 | 189,562 | ||||||
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $ | 234,312 | $ | 207,678 | ||||
Supplemental schedule of non-cash financing activities | ||||||||
Restricted net2phone common stock withheld from employees for income tax obligations | $ | 3,558 | $ | — | ||||
Value of Class B common stock exchanged for NRS shares | $ | 6,254 | $ | — | ||||
Stock issued to certain executive officers for bonus payments | $ | — | $ | 615 |
*Reconciliation of Non-GAAP Financial Measures for the
Second Quarter Fiscal 2024 and 2023
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in
Generally, a non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.
IDT’s measure of non-GAAP EPS is calculated by dividing non-GAAP net income by the diluted weighted-average shares. IDT’s measure of non-GAAP net income starts with net income attributable to IDT in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expense, and deducts other operating gains. These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2024 and fiscal 2023 periods.
Management believes that IDT’s Adjusted EBITDA and non-GAAP EPS are measures which provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of IDT’s or the relevant segment’s core operating results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses Adjusted EBITDA and non-GAAP EPS to evaluate operating performance in relation to IDT’s competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, IDT has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting.
Management refers to Adjusted EBITDA, as well as the GAAP measures income (loss) from operations and net income, on a segment and/or consolidated level to facilitate internal and external comparisons to the segments’ and IDT's historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.
While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or capitalized in prior periods. IDT’s Adjusted EBITDA, which is exclusive of depreciation and amortization, is a useful indicator of its current performance.
Severance expense is excluded from the calculation of Adjusted EBITDA and non-GAAP EPS. Severance expense is reflective of decisions made by management in each period regarding the aspects of IDT’s and its segments’ businesses to be focused on in light of changing market realities and other factors. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of IDT’s core and continuing operations.
Other operating (expense) gain, net, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA and non-GAAP EPS. Other operating (expense) gain, net includes, among other items, legal fees net of insurance claims related to Straight Path Communications Inc.’s stockholders’ class action, gains from the write-off of contingent consideration liabilities, gain from the sale of state income tax credits, and fixed asset write-offs. From time-to-time, IDT may have gains or incur costs related to non-routine legal, tax, and other matters, however, these various items generally do not occur each quarter. IDT believes the gain and losses from these non-routine matters are not components of IDT’s or the relevant segment’s core operating results.
Stock-based compensation recognized by IDT and other companies may not be comparable because of the variety of types of awards as well as the various valuation methodologies and subjective assumptions that are permitted under GAAP. Stock-based compensation is excluded from IDT’s calculation of non-GAAP EPS because management believes this allows investors to make more meaningful comparisons of the operating results per share of IDT’s core business with the results of other companies. However, stock-based compensation will continue to be a significant expense for IDT for the foreseeable future and an important part of employees’ compensation that impacts their performance.
Adjusted EBITDA and non-GAAP EPS should be considered in addition to, not as a substitute for, or superior to, income (loss) from operations, cash flow from operating activities, net income, basic and diluted earnings per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, IDT’s measurements of Adjusted EBITDA and non-GAAP EPS may not be comparable to similarly titled measures reported by other companies.
Following are reconciliations of Adjusted EBITDA and non-GAAP EPS to the most directly comparable GAAP measure, which are, (a) for Adjusted EBITDA, income (loss) from operations for IDT’s reportable segments and net income for IDT on a consolidated basis, and (b) for non-GAAP EPS, diluted earnings per share.
Reconciliation of Net Income to Adjusted EBITDA
(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions
Traditional | net2phone | NRS | Fintech | Corporate | ||||||||||||||||||||
Three Months Ended (2Q24) | ||||||||||||||||||||||||
Net income attributable to | $ | 14.4 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 1.3 | |||||||||||||||||||||||
Net income | 15.8 | |||||||||||||||||||||||
Provision for income taxes | 4.0 | |||||||||||||||||||||||
Income before income taxes | 19.7 | |||||||||||||||||||||||
Interest income, net | (1.2 | ) | ||||||||||||||||||||||
Other income, net | (2.5 | ) | ||||||||||||||||||||||
Income (loss) from operations | 16.0 | $ | 14.6 | $ | 0.4 | $ | 5.3 | $ | (0.7 | ) | $ | (3.6 | ) | |||||||||||
Depreciation and amortization | 5.1 | 2.0 | 1.6 | 0.8 | 0.7 | - | ||||||||||||||||||
Severance | 0.3 | 0.3 | - | - | - | - | ||||||||||||||||||
Other operating expense (gain), net | 0.3 | - | (0.1 | ) | - | - | 0.4 | |||||||||||||||||
Adjusted EBITDA | $ | 21.8 | $ | 17.0 | $ | 1.8 | $ | 6.1 | $ | - | $ | (3.2 | ) |
Reconciliation of Net Income to Adjusted EBITDA
(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions
Traditional | net2phone | NRS | Fintech | Corporate | ||||||||||||||||||||
Three Months Ended (1Q24) | ||||||||||||||||||||||||
Net income attributable to | $ | 7.7 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 0.8 | |||||||||||||||||||||||
Net income | 8.5 | |||||||||||||||||||||||
Provision for income taxes | 3.9 | |||||||||||||||||||||||
Income before income taxes | 12.4 | |||||||||||||||||||||||
Interest income, net | (0.8 | ) | ||||||||||||||||||||||
Other expense, net | 5.6 | |||||||||||||||||||||||
Income (loss) from operations | 17.2 | $ | 15.4 | $ | - | $ | 5.5 | $ | (1.4 | ) | $ | (2.3 | ) | |||||||||||
Depreciation and amortization | 5.0 | 2.1 | 1.4 | 0.7 | 0.7 | - | ||||||||||||||||||
Severance | 0.5 | 0.5 | - | - | - | - | ||||||||||||||||||
Other operating gain, net | (0.5 | ) | - | - | - | - | (0.5 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 22.3 | $ | 18.1 | $ | 1.4 | $ | 6.2 | $ | (0.7 | ) | $ | (2.8 | ) |
Traditional | net2phone | NRS | Fintech | Corporate | ||||||||||||||||||||
Three Months Ended (4Q23) | ||||||||||||||||||||||||
Net income attributable to | $ | 8.0 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 0.8 | |||||||||||||||||||||||
Net income | 8.8 | |||||||||||||||||||||||
Provision for income taxes | 3.8 | |||||||||||||||||||||||
Income before income taxes | 12.6 | |||||||||||||||||||||||
Interest income, net | (1.1 | ) | ||||||||||||||||||||||
Other expense, net | 0.5 | |||||||||||||||||||||||
Income (loss) from operations | 12.0 | $ | 14.1 | $ | (0.7 | ) | $ | 1.7 | $ | (1.9 | ) | $ | (1.2 | ) | ||||||||||
Depreciation and amortization | 5.1 | 2.3 | 1.5 | 0.7 | 0.7 | - | ||||||||||||||||||
Severance | 0.5 | 0.4 | 0.1 | - | - | - | ||||||||||||||||||
Other operating expense (gain), net | 0.5 | 1.8 | 0.1 | - | - | (1.4 | ) | |||||||||||||||||
Adjusted EBITDA | $ | 18.1 | $ | 18.6 | $ | 0.9 | $ | 2.4 | $ | (1.2 | ) | $ | (2.6 | ) |
Reconciliation of Net Income to Adjusted EBITDA
(unaudited) in millions. Figures may not foot or cross-foot due to rounding to millions
Traditional | net2phone | NRS | Fintech | Corporate | ||||||||||||||||||||
Three Months Ended (3Q23) | ||||||||||||||||||||||||
Net income attributable to | $ | 6.9 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 0.9 | |||||||||||||||||||||||
Net income | 7.7 | |||||||||||||||||||||||
Provision for income taxes | 3.0 | |||||||||||||||||||||||
Income before income taxes | 10.7 | |||||||||||||||||||||||
Interest income, net | (0.7 | ) | ||||||||||||||||||||||
Other expense, net | 0.4 | |||||||||||||||||||||||
Income (loss) from operations | 10.4 | $ | 12.9 | $ | (0.4 | ) | $ | 2.1 | $ | (1.3 | ) | $ | (2.9 | ) | ||||||||||
Depreciation and amortization | 5.2 | 2.5 | 1.4 | 0.6 | 0.7 | - | ||||||||||||||||||
Severance | 0.1 | 0.1 | - | - | - | - | ||||||||||||||||||
Other operating expense, net | 4.8 | 4.1 | - | - | - | 0.6 | ||||||||||||||||||
Adjusted EBITDA | $ | 20.5 | $ | 19.7 | $ | 1.0 | $ | 2.7 | $ | (0.6 | ) | $ | (2.3 | ) |
Traditional | net2phone | NRS | Fintech | Corporate | ||||||||||||||||||||
Three Months Ended (2Q23) | ||||||||||||||||||||||||
Net income attributable to | $ | 14.6 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 0.7 | |||||||||||||||||||||||
Net income | 15.3 | |||||||||||||||||||||||
Provision for income taxes | 5.3 | |||||||||||||||||||||||
Income before income taxes | 20.6 | |||||||||||||||||||||||
Interest income, net | (0.8 | ) | ||||||||||||||||||||||
Other income, net | (1.6 | ) | ||||||||||||||||||||||
Income (loss) from operations | 18.2 | $ | 17.0 | $ | (0.6 | ) | $ | 5.4 | $ | (0.8 | ) | $ | (2.8 | ) | ||||||||||
Depreciation and amortization | 5.0 | 2.4 | 1.4 | 0.6 | 0.7 | - | ||||||||||||||||||
Severance | 0.2 | 0.2 | - | - | - | - | ||||||||||||||||||
Other operating (gain) expense, net | - | - | - | - | (0.3 | ) | 0.3 | |||||||||||||||||
Adjusted EBITDA | $ | 23.4 | $ | 19.6 | $ | 0.8 | $ | 6.0 | $ | (0.5 | ) | $ | (2.5 | ) |
Reconciliation of Earnings per share to Non-GAAP EPS
(unaudited) in millions, except per share data. Figures may not foot due to rounding to millions.
2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | ||||||||||||||||
Net income attributable to | $ | 14.4 | $ | 7.7 | $ | 8.0 | $ | 6.9 | $ | 14.6 | ||||||||||
Adjustments (add) subtract: | ||||||||||||||||||||
Stock-based compensation | (2.5 | ) | (0.8 | ) | (1.0 | ) | (1.7 | ) | (1.3 | ) | ||||||||||
Severance expense | (0.3 | ) | (0.5 | ) | (0.5 | ) | (0.1 | ) | (0.2 | ) | ||||||||||
Other operating (expense) gain, net | (0.3 | ) | 0.5 | (0.5 | ) | (4.8 | ) | - | ||||||||||||
Total adjustments | (3.1 | ) | (0.8 | ) | (2.0 | ) | (6.6 | ) | (1.5 | ) | ||||||||||
Income tax effect of total adjustments | (0.6 | ) | (0.3 | ) | (0.7 | ) | (1.8 | ) | (0.4 | ) | ||||||||||
2.5 | 0.5 | 1.3 | 4.8 | 1.1 | ||||||||||||||||
Non-GAAP net income | $ | 16.9 | $ | 8.2 | $ | 9.3 | $ | 11.7 | $ | 15.7 | ||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 0.57 | $ | 0.30 | $ | 0.31 | $ | 0.27 | $ | 0.57 | ||||||||||
Total adjustments | 0.10 | 0.03 | 0.06 | 0.19 | 0.05 | |||||||||||||||
Non-GAAP - basic | $ | 0.67 | $ | 0.33 | $ | 0.37 | $ | 0.46 | $ | 0.62 | ||||||||||
Weighted-average number of shares used in calculation of basic earnings per share | 25.2 | 25.2 | 25.4 | 25.5 | 25.5 | |||||||||||||||
Diluted | $ | 0.57 | $ | 0.30 | $ | 0.31 | $ | 0.27 | $ | 0.57 | ||||||||||
Total adjustments | 0.10 | 0.02 | 0.05 | 0.19 | 0.05 | |||||||||||||||
Non-GAAP - diluted | $ | 0.67 | $ | 0.32 | $ | 0.36 | $ | 0.46 | $ | 0.62 | ||||||||||
Weighted-average number of shares used in calculation of diluted earnings per share | 25.3 | 25.3 | 25.5 | 25.6 | 25.5 |
**Explanation of Key Performance Metrics
NRS’ recurring revenue is NRS’ revenue in accordance with GAAP excluding revenue from POS terminal sales. NRS’ Monthly Average Recurring Revenue per Terminal is a financial metric. Monthly Average Recurring Revenue per Terminal is calculated by dividing NRS’ recurring revenue by the average number of active POS terminals during the period. The average number of active POS terminals is calculated by adding the beginning and ending number of active POS terminals during the period and dividing by two. NRS’ recurring revenue divided by the average number of active POS terminals is divided by three when the period is a fiscal quarter. Recurring revenue and Monthly Average Recurring Revenue per Terminal are useful for comparisons of NRS’ revenue and revenue per customer to prior periods and to competitors and others in the market, as well as for forecasting future revenue from the customer base.
net2phone’s subscription revenue is its revenue in accordance with GAAP excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in
BOSS Money’s Average Revenue per Transaction is also a financial metric. Average Revenue per Transaction is calculated by dividing BOSS Money’s revenue in accordance with GAAP by the number of transactions during the period. Average Revenue per Transaction is useful for comparisons of BOSS Money’s revenue per transaction to prior periods and to competitors and others in the market, as well as for forecasting future revenue based on transaction trends.
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Source:
2024 GlobeNewswire, Inc., source