Executive Summary
IDT Corporation’s QQ3 2024 results reflect a clear pivot toward high-margin, high-growth segments within Fintech and communications services. Reported revenue of $299.6 million was essentially flat year over year (+0.1%) and up 1.2% sequentially, underscoring resilience as the company leverages a mixed portfolio of three growth engines: NRS (POS network and payments), net2phone UCaaS, and BOSS Money Fintech. Consolidated gross margin improved by 310 basis points to 31.1%, driven by stronger mix and operating leverage in the high-growth segments, while EBITDA of $20.6 million and a 6.9% EBITDA margin signal meaningful profitability improvement against a backdrop of a traditional, lower-margin core telecom business.
Management highlighted that each growth engine contributed meaningfully: NRS expanded to more than 30,000 active terminals, net2phone EBITDA more than doubled year over year, and BOSS Money achieved cash-flow positive results for the first time as it scales. The Fintech segment, buoyed by cross-sell opportunities and a broadened agent network, achieved positive adjusted EBITDA for the first time this quarter. However, the quarter’s SG&A was elevated due to one-time executive compensation charges, a factor the company indicated should unwind and yield more pronounced cost-savings in Q4 and beyond. The balance sheet remains exceptionally liquid with roughly $233 million in cash and minimal net debt, providing optionality for continued buybacks and a quarterly dividend.
Looking ahead, IDT’s management views the three high-growth franchises as sustainable, margin-enhancing contributors to the consolidated bottom line, with ongoing investments in pricing, product enhancements (AI-powered features in net2phone), and improved user experiences. Investors should monitor the pace of cost rationalization, the trajectory of NRS Pay economics, and the monetization cadence for ARPU expansion in net2phone and CCaaS, alongside the sensitivity of advertising and traditional telecom businesses to macro dynamics.
Key Performance Indicators
QoQ: -61.52% | YoY:-19.43%
QoQ: -61.40% | YoY:-18.52%
Key Insights
Revenue: $299.643 million; YoY +0.12%, QoQ +1.20%
Gross Profit: $93.249 million; Gross Margin 31.12%; YoY +4.72%, QoQ -0.41%
OperatingIncome: $15.442 million; Margin 5.15%; YoY +48.81%, QoQ -7.28%
EBITDA: $20.553 million; EBITDA Margin 6.86%
NetIncome: $5.551 million; Net Margin 1.85%; YoY -19.43%, QoQ -61.52%
EPS: $0.22; Diluted $0.22; YoY -18.52%, QoQ -61.40%
OperatingCashFlow: $9.586 million; CapEx: $4.736 million; FreeCashFlow: $4.849 million
BalanceSheetMetrics: Cash & Equivalents $232....
Financial Highlights
Revenue: $299.643 million; YoY +0.12%, QoQ +1.20%
Gross Profit: $93.249 million; Gross Margin 31.12%; YoY +4.72%, QoQ -0.41%
OperatingIncome: $15.442 million; Margin 5.15%; YoY +48.81%, QoQ -7.28%
EBITDA: $20.553 million; EBITDA Margin 6.86%
NetIncome: $5.551 million; Net Margin 1.85%; YoY -19.43%, QoQ -61.52%
EPS: $0.22; Diluted $0.22; YoY -18.52%, QoQ -61.40%
OperatingCashFlow: $9.586 million; CapEx: $4.736 million; FreeCashFlow: $4.849 million
BalanceSheetMetrics: Cash & Equivalents $232.845 million; TotalAssets $517.302 million; TotalLiabilities $283.231 million; TotalStockholdersEquity $214.487 million; NetDebt (Cash net of debt) -$228.288 million; CurrentRatio 1.456; CashRatio 0.838; Debt/Equity 0.021; ROE 2.59%; ROA 1.07%
Valuation: P/E ~40.6x; P/S 3.01x; P/B 4.20x; EV/EBITDA 32.72x; Dividend Yield ~0.14%
Note: The four-quarter and ratio data reflect the QQ3 2024 quarter-end period (April 30, 2024) and reported figures in the accompanying filings.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
299.64M |
0.12% |
1.20% |
| Gross Profit |
93.25M |
4.72% |
-0.41% |
| Operating Income |
15.44M |
48.81% |
-7.28% |
| Net Income |
5.55M |
-19.43% |
-61.52% |
| EPS |
0.22 |
-18.52% |
-61.40% |
Key Financial Ratios
operatingProfitMargin
5.15%
operatingCashFlowPerShare
$0.38
freeCashFlowPerShare
$0.19
dividendPayoutRatio
22.9%
Management Commentary
Key management takeaways from the QQ3 2024 earnings call:
- Strategy and Growth Focus: IDT’s three high-margin businesses — NRS, net2phone, and BOSS Money — remain the growth anchors, with management stressing sustainable profitable growth across these units and a gradual transition from a traditional telecom mix to higher-margin opportunities.
- NRS Execution and Scale: Shmuel Jonas highlighted that NRS added 1,600 net new POS terminals in the quarter and that NRS surpassed 30,000 active terminals, becoming the largest POS network for C-stores in the U.S. This scale is intended to unlock per-terminal economics via NRS Pay and increased cross-sell of payment processing and SaaS.
- Net2phone Operating Leverage: Net2phone EBITDA more than doubled YoY to over $2 million in the quarter, aided by disciplined cost control and ongoing improvements in unit economics. Jonas emphasized transitioning to differentiated pricing (basic plan plus premium features including AI) to drive ARPU expansion and CCaaS growth.
- Fintech Profitability Milestone: BOSS Money achieved cash-flow positive status and, as a result, the Fintech segment posted its first positive adjusted EBITDA quarter, aided by a broadened agent network and cross-sell within the BOSS ecosystem.
- SG&A and Costs: Marcelo Fischer noted a one-time, non-cash compensation-related charge from executive-contract arrangements that contributed to higher SG&A in Q3. He signaled the cost-cutting program would produce material benefits in Q4 and beyond, with ongoing focus on improving SG&A efficiency.
- Traditional Segments and Margin Transition: Management reiterated ongoing pressure in the ILD/wholesale and traditional communications businesses but stressed stabilization of the IDT digital payments business and pricing actions for international mobile top-ups that have begun to improve profitability.
- Market Conditions: Management acknowledged the advertising revenue mix is volatile and seasonally driven, while cash generation from Fintech and higher-margin segments is central to the path toward sustainable profitability.
"NRS has surpassed 30,000 active terminal this quarter, making it the largest POS network for C-stores in the country."
— Shmuel Jonas
"Net2phone, adjusted EBITDA doubled year-over-year in the current quarter as the business continues to scale."
— Shmuel Jonas
Forward Guidance
Management has not issued explicit GAAP revenue or EBITDA targets for the near-term. However, the QQ3 2024 commentary points to several directional guidance signals:
- Cost Discipline: A large cost-cutting program is expected to flow through to Q4 and beyond, with SG&A tailwinds supporting improved operating leverage as the high-growth segments scale.
- Fintech Profitability: BOSS Money has achieved cash flow positivity, and the Fintech segment is expected to sustain positive adjusted EBITDA as agent networks expand and cross-sell improves customer lifetime value metrics.
- NRS and UCaaS Momentum: NRS remains a long-tail opportunity through additional terminals and enhanced per-terminal economics via NRS Pay, while net2phone is transitioning to a feature-rich pricing structure to support ARPU growth and broader CCaaS adoption.
- ARPU Expansion and User Experience: Net2phone will roll out a unified interface across devices and AI-enabled premium features to drive ARPU growth and add depth to the CCaaS stack.
- Sensitivities to Monitor: Advertising revenue volatility, cross-border remittance regulatory and FX/regulatory risk in Fintech corridors, competitive dynamics in UCaaS, and the pace of cost reductions.
Overall, the trajectory suggests improving profitability and cash generation should continue through late-2024 and into 2025, supported by margin expansion from high-growth segments and disciplined OPEX management.