On June 5, 2024, IDT Corp (IDT, Financial) released its 8-K filing for the third quarter of fiscal year 2024, ending April 30, 2024. IDT Corp is a multinational holding company operating primarily in the telecommunications and payment industries, with four reportable business segments: Fintech, National Retail Solutions (NRS), net2phone, and Traditional Communications.
Consolidated Financial Performance
IDT Corp reported consolidated revenue of $299.6 million for Q3 FY2024, a slight increase of 0.1% compared to $299.3 million in Q3 FY2023. The gross profit rose by 10.8% to $97.0 million, improving the gross profit margin by 310 basis points to 32.4%. However, the net income attributable to IDT decreased to $5.6 million from $6.9 million in the same period last year, resulting in a diluted EPS of $0.22, down from $0.27.
Segment Performance
National Retail Solutions (NRS): The NRS segment saw a significant increase in recurring revenue, up 45.4% to $24.0 million. Income from operations surged by 129% to $4.8 million, and Adjusted EBITDA increased by 108% to $5.6 million. The number of active POS terminals grew by 26.6% to 30,300, and payment processing accounts increased by 38.0% to 19,500.
net2phone: The net2phone segment reported a 17.1% increase in subscription revenue to $20.0 million. Income from operations jumped by 226% to $0.5 million, and Adjusted EBITDA rose by 107% to $2.1 million. The number of seats served increased by 12.9% to 384,000.
Fintech: The Fintech segment, which includes BOSS Money, saw transactions increase by 44.2% to 4.7 million, with revenue up 44.7% to $31.5 million. The segment achieved its first positive Adjusted EBITDA of $0.2 million, a significant improvement from a loss of $0.6 million in Q3 FY2023.
Traditional Communications: This segment contributed 74.0% of IDT’s consolidated revenue, totaling $221.7 million, a decrease from $241.0 million in Q3 FY2023. The gross profit for this segment fell by 9.3% to $41.2 million, and Adjusted EBITDA decreased by 4.8% to $14.9 million.
Balance Sheet and Cash Flow
As of April 30, 2024, IDT held $174.0 million in cash, cash equivalents, debt securities, and current equity investments. Current assets totaled $408.5 million, while current liabilities were $277.8 million. The company had no outstanding debt at the end of the fiscal quarter. Net cash provided by operating activities was $9.6 million, a significant improvement from a net cash usage of $6.9 million in Q3 FY2023.
Dividend Announcement
IDT Corp announced a quarterly dividend of $0.05 per share on its Class A and Class B Common stock, payable on or about June 17, 2024, to stockholders of record as of June 10, 2024.
CEO Commentary
“IDT’s three high-growth, high-margin businesses again delivered strong results in the third quarter, contributing to a 310-basis point improvement in our consolidated gross margin. NRS has surpassed the 30 thousand active terminal milestone, making it the largest POS network for C-stores in the country. At net2phone, Adjusted EBITDA doubled year-over-year in the current quarter, as the business continues to scale and improve its operating leverage. And at BOSS Money, our balanced, omni-channel approach to customer acquisition and focus on customer service and user experience drove another quarter of strong revenue increases, helping the Fintech segment to its first Adjusted EBITDA positive quarter.”
Conclusion
IDT Corp's Q3 FY2024 results highlight strong performance in its high-growth segments, particularly in Fintech and net2phone, despite challenges in the Traditional Communications segment. The company's strategic focus on scaling its high-margin businesses and improving operational efficiency has yielded positive results, positioning it well for sustainable, profitable growth.
Explore the complete 8-K earnings release (here) from IDT Corp for further details.
