Q4 2020 IDT Corp Earnings Call

Thursday Thursday

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Thursday

good afternoon, and welcome to the IDT corporations fourth quarter and full fiscal year 2020 earnings call in today's presentation money management will discuss idt's financial and operational results for the three and twelve month period ended July 31st, 2020 during remarks chief executive officer has all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by Thursday after the prepared remarks Marcelo Fisher Chief Financial Officer will join Mister Jonas for questions and answers.

Any forward-looking?

Statements made during this conference call either in the prepared remarks are in the question-and-answer session whether general or specific in nature are subject to risks and uncertainties that may cause actual results May 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 I deal with files periodically with the SEC 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 question-and-answer session management may make reference to non-gaap measures including adjusted ebitda non-gaap net income and non-gaap earnings per share a schedule provided in the idt's earnings release reconciles adjusted ebitda. Non-gaap net wage.

And non-gaap earnings per share to the nearest corresponding gaap measures, please note that earnings release is available on the investor relations page of the IDT Corporation website off. The earnings release has also been filed on a form 8-k with the SEC. I will now turn the conference over to mister Jonas, please go ahead.

Thank you very much operator, and I apologize in advance if I lose my place. I having a little printer issues. So I was unable to print this speech before hand wash. Welcome to T's fourth quarter and full fiscal year 2020 early fall covering results for the 12 months ended July 31st, 2020 on jointed and the call by Marcella m i d t Chief Financial Officer for a more detailed report on our financial and operational results. Please read our earnings release filed earlier today and our form 10-K, which we expect to file with the SEC on October 14th.

First off. I want to thank our teams worldwide who continued to to do just a terrific job despite the challenges of working from home as I can attest and participate in particular. I want to thank all our colleagues Distributors and Retail Partners who continue to support our customers under these very difficult circumstances.

One thing I don't talk enough about is our customers. I want to take a moment to thank them for trusting Us in this challenging time. Our business customers count on us every day.

To allow them to manage their businesses better both online and offline to collaborate to collaborate with their suppliers and to communicate with their partners and clients. Our Boss Revolution customers count on us to keep in touch with their family and friends and deliver their very hard earned money to level in the worldwide. Our business is all about earning the trust that our customers placed in us every day. We don't take that responsibility lightly and we work hard every day to make sure that we continue to improve as a small token of appreciation for all that our customers. Do we develop it under wrote a project called stories of the American dream. The project is a collection of stories told by people from all over the world who came to America and are making truly remarkable contributions country. You can see this wonderful project by visiting stories of the American dream. Com or by following us on social media.

our fourth-quarter results were

Quite good, which she's our highest levels of Consolidated quarterly margin contribution and adjusted ebitda in over a decade.

Let's start by talking about our exciting growth businesses and their achievements money transfers fourth quarter Revenue increased by 14.3 million year-over-year and 9 and 1/2 million dollars. Actually two twenty one point three million dollars full fiscal year twenty-twenty transfer Revenue was $48 more than double the 23.1 generated and fiscal 2009 Jeep our money transfer business built upon its strong organic growth by leveraging certain favorable Foreign Exchange Market condition to deliver exceptional results this quarter these far-off these Forex conditions are transient. However, and they begin to normalize following the quarter closed Although our digital channels again were the main contributor to money transfers rapid growth our complimentary Tori in store money transfer Channel also has huge potential.

Over the past several quarters, we have dramatically improved our platform and stabilized in store transaction levels and margin contributions. We now believe we are we are in a position to grow our faith would print

before this calendar year is out. We expect to build on the success of our money app by launching a synergistic Neo bank offering our boss money Neo Bank also called month will have numerous unique features. It will also be monthly fee free and virtually see free in general and provide robust consumer rewards to drive rapid customer acquisition long as we extend the capabilities of the be our money app. We are going to expand its reach beyond the USA and we are developing quite a few additional exciting synthetic products and offering that will appeal to sort of globally continuing with our growth businesses and that the phones product and development teams were very busy this quarter. We introduced our Microsoft teams integration and late in the Thursday. Excuse me. We introduced our Microsoft teams integration late in the third quarter and this quarter. We already added over three thousand people to it.

This quarter. We also release title our video conferencing solution worldwide model is also getting very good traction with our customers. And I personally use it almost every day in addition that the phones rolled out new billing Platforms in the US and will deploy those billing platforms worldwide over the course of the next year earlier this week. We officially released net2phone Zoho integration. We will soon announce a ton of other CRM integration and some major feature hands, and we also are getting good traction on our net phone apis facilitating facilitating customer by developers with third-party Solutions.

The increasing sophistication of our Cloud communication offerings and strong demand help to increase you cast subscription Revenue here in the US by 12% sequentially and 43% compared with the year-ago quarter in South America the stronger dollar and covid-19 impact had the opposite effect lowering are dollar-denominated revenues elevating customer churn and slowing sales rep. However, we're seeing a big Improvement in the current quarter and I'm personally optimistic that we will return to sustained growth in our International markets and fiscal 2021.

a national retail

Revenue increase by two point eight million dollars you over a year to four point seven million dollars full fiscal year Revenue was hit twelve million dollars nearly doubled the 6.2 million generated in a 2019.

We continue to add tons of new features to the POS and we continue improving our NRS retailer app and we massively improve the be our club app during the quarter helping us achieve record app usage and app purchase for our store owners the lets customers order and pay remotely and we also launched our loyalty loyalty program inside the club app. I am personally excited to start using M Awards and my local coffee shop. I love learning the free coffee.

Merchant services including credit card processing services for retailers and the sale of digital advertising through our POS terminal Network where the fastest growing Revenue sources at Birth.

Unlike most Payment Processing services and rs pay does not require a contract. We also provide our equipment without charge and there are no hidden fees. We charge only flat transparent rates and as a result enrolling new retailers faster than ever for advertisers our POS Network offers an extremely cost-effective way to reach the large and ethnically diverse Urban population served by our retailers. Our customers facing digital our customer-facing digital screens handle both still and video ads that display while I retailers bring up the purchases. We already processed over forty six million transactions per month and that number is growing rapidly.

Currently we are selling only a small percentage of our POS Network ad space capacity. But as programmatic buying becomes a bigger driver of digital out-of-home advertising as we expect it will that page and it will increase substantially because advertisers have seen that are displays result in high levels of customer engagement and because the high gross margins associated with advertising sales in general, I believe that the interest Network represents a very long-term growth opportunity the expansion of our POS network has been exceptional interest added over 1,200 during the quarter and by the quarters closed. We were billing for 11,500 units.

And now with the Yankee Hall of Fame Mariano Rivera pitching for National Retail Solutions as interested spokesperson. We are positioned to knock the ball out of the park in 2021. I've always wanted to say that I know it's pivot and very briefly review results for IDT Telecom score offering Boss Revolution calling in Mobile. Top-Up had strong performances in the fourth quarter as our customers kept.

In closer touch with an increase their support for friends and families during the pandemic our wholesale carrier division, which depends on International businesses Communications was again impacted by the closure or partial closure of many Corporate Offices due to the pandemic from a balance sheet perspective. We continue to strengthen our position during the fourth quarter. We increased our Holdings of cash get Sakura Equity Investments by thirty eight point seven million dollars to 109.2 million dollars, even as we returned four million dollars to our stockholders through repurchases of our common stock. We accomplish this while while remaining free of debt wrapping up I again want to thank our amazing IDT net interest in books teammates who continue their amazing product development Thursday. We serve a stream really tough and obviously unprecedented time. Thank you very much.

Now it's on to fiscal.

20-21 the continued expansion of our higher margin growth businesses and the resilience of our consumer core offering position to deliver improving results and to create significant long-term value age is very excited about the opportunities ahead and I look forward to recording to you on our progress or stolen I would be happy to take questions now and I apologize for being choppy.

We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing keys to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster.

again, if you have a question, please press * then 1

As there are no more questions this concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation and you may now disconnect.

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