Q3 2021 IDT Corp Earnings Call
Good evening and welcome to the IDT Corporation's third quarter fiscal year 'twenty 'twenty 1 earnings call in today's presentation, Idt's management will discuss Idt's financial and operational results for the 3 months period ended April 30 of 'twenty 'twenty 1.
During remarks by Idt's, Chief Executive Officer Shmuel.
Jonas all participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero.
After the prepared remarks, Marcelo Fischer Idt's, Chief Financial Officer will join Mr. Jonas for Q&A any forward looking statements made during this conference call either in the prepared remarks or in the Q&A session, whether general or specific in nature are subject to risks and uncertainties that may cause actual results to differ materially from the.
Those which the company anticipates the.
These risks and uncertainties include but are not limited to specific risks and uncertainties discussed on the reports that IDT files periodically with the SEC I D. T assumes no obligation to either 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 Q&A session Idt's management may make reference to non-GAAP measures, including adjusted EBITDA adjusted EBITDA less Capex non-GAAP net income and non-GAAP earnings per share.
The schedule provided in the IDT earnings release reconciles adjusted EBITDA adjusted EBITDA less Capex non-GAAP net income and non-GAAP earnings per share to the nearest corresponding GAAP measures. Please note that the IDT earnings release is available on the Investor Relations page of the IDT Corporation website. The earnings release has also been filed.
Good on a form 8-K with the SEC I will now turn the conference over to Mr. Jonas.
Thank you operator.
Welcome to Idt's third quarter fiscal year 2021 earnings call covering the results for the 3 months ended April 30th 'twenty 'twenty 1 on.
I'm joined today on the call by Marcelo Fischer Idt's Chief Financial Officer.
For a detailed report on our financial and operational results. Please read our earnings release filed earlier today, and our form 10-Q, which we expect to file with the SEC on or about 2.9.
IDT continued to deliver strong results, reflecting the sustained execution of our strategic priorities and the robust operating performance of our businesses.
As a result of top and bottom lines increased appreciably compared to the year ago and prior quarters.
Even when excluding the positive impacts of the reversal of income tax valuation allowances.
Yeah.
Yeah.
And gains on investments recorded this quarter consolidated revenue increased $52 million year over year to $374 million.
It was our fourth consecutive quarter of year over year revenue increases.
With solid performances across the board, including an exceptional increase in mobile top up revenue among our traditional communications offerings.
Consolidated income from operations, the increased $10.1 million, the $13.9 million this quarter.
All of adjusted EBITDA, less Capex, which is the overall a good proxy for cash generation jumped to $13.2 million from $5.7 million.
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I'm sorry on the problem with my prerecorded.
I'm just kind of go back the drop I apologize.
Anthony of the income from operations increased $10.1 million to $13.9 million this quarter, while adjusted EBITDA less capex, which is the overall a good proxy for cash generation jumped to $13.2 million from $5.7 million.
All 3 of our reporting segments net the phone UK fintech and traditional communications met or exceeded our expectations.
Our high growth high margin businesses once again performed extremely well.
The net home delivered subscription revenue growth of 39% year over year. The increase reflected in park per progress on net on the development roadmap net 1 continue to add API third party integrations and now offers integrations with Salesforce Soho purple clouds flagged the deeper and Microsoft among others.
Okay.
It's growing integration toolkit enhances.
Access to new segments across the domestic and international market and our Fintech segment N. R. S accelerated its impressive revenue growth increasing revenue by over 120% year over year led by payment processing and digital advertising services.
This quarter interest of announced the partnership enabling our independent retailers to ship and receive commerce packages.
This deal illustrates the real strength of the N or at the ecosystem, namely the ability to generate revenue from a variety of services in ways that add tremendous value to of retailers.
Also within Fintech, our boss Revolution money transfer business remains strong generating 63% revenue growth year over year. After excluding the significant positive impact of the transient FX opportunities, we successfully pursued starting with the year ago quarter of which finally on completely ceased in the second quarter of this year.
Our money transfer team has done a great job of enhancing the boss Revolution money App user experience and of systematically cross selling customers from our other both the offerings in the coming months, we will continue to grow our money transfer service to new quarters enhance our distribution network, notably in Africa and expanded the new origination markets. These IND.
She lives off for abundant long term growth potential.
And finally within our largest segment traditional communication mobile top of revenue jumped by $36 million sequentially by $47 million year over year underscoring the bigger of these offerings and the potential to sustain long term cash generation.
The significant revenue increase reflect our recent efforts to grow our share in the mobile top up the states powered by mobile top up adjusted EBITDA less capex for the traditional communications tagging jumped to $28 million, an increase of $8.7 million from the year ago quarter for.
Finishing up our strong third quarter operational results enable enabled us to further strengthen our balance sheet with the significant improvement to available cash and current ratios. This quarter now Marcelo and I would be happy to take your questions and I'm sure. Some of them like kids would love to join but hopefully with just the 2 of us.
We will now begin the question and answer session to ask the question you May Press Star then 1 on your Touchtone phone if for using a speakerphone. Please pick up of your handset before pressing the keys.
At any time of your question that's been addressed and you would like to withdraw your question. Please press Star then 2.
At this time, we will pause momentarily to assemble our roster.
Okay.
Our first question will come from James Smith, a private Investor. Please go ahead.
Hi, Good evening I have 2 questions. The first 1 is in relation to into use the large sequential jump. If you could just go into a little more detail. There is the product development initiatives and the extent to which you think thats sustainable in future quarters and then the second question was on market the stock.
In early April just a little more detail on what the product is in which division it's going to teach.
And sort of what the plan is there. Thank you.
Okay.
The Marcellus do you want to answer any of our part of it please feel to kill 3 to jump in.
No the.
The IMT business was really.
Broad based gains I mean, we had games that.
Retail wholesale direct to consumer.
Africa Latin America.
There were some significant opportunity that we.
We seized upon this quarter.
Debt, we believe that will continue.
And we think that it has a bright future ahead.
As far as market spark.
It's been an interesting ride so far.
We're very excited about it that being said, it's not a you know it.
It's a we're not used to being.
In the past of investors, where we're used to being a real operators and we did not do the market spark investment as the as the management team and the business that being said I think the management in the business.
It's very strong.
From the basic opportunity that we see in market spark is there.
There's a need to to move from what people call pipeline.
2 to basically cellular lines.
The carriers, you know effectively try to cut the the copper wires in whole sections of the country. The.
There is a need for security systems Pos system.
Really any you know.
Hmm.
Phone lines the require specialized connection.
That was done over copper for years and years to switch to to cellular and basically you know market spark provides the the technology to do so and at the very compelling offer Hum you know per of variety of.
The reason the easiest 1 to explain is that there was the big advantage in the offer based on the.
The taxes.
So the the FTC.
No taxes pipeline I'm on.
I had a very very high rate and cellular end of very very low rate.
So immediately youre able to save customers money.
Almost guaranteed and that's been the reason why they've landed.
So many large customers so quickly.
That being said, it's having the it's growing pains and but we think that it has the.
On the eventual very very bright future so I hope.
That's kind of the answers the question.
Does that answer the question from Mr. Smith.
Yeah, and John's Thank comes of scrap and James in terms of where it belongs because vegetable rationed.
We have taken the minority position of the company. So we are going to be upheld the fall back to the bathroom. That's on the deck will be matlick might consolidate the need and the alcohol no day of results. All showed the results of that business. The collected net and operating income or expense items no P&L.
That makes sense. Thank you very much.
Sure.
Again, if you have a question. Please press Star then 1.
Okay.
Yeah.
Our next question will come from Brian Warner a private Investor. Please go ahead.
Yeah.
I apologies for ion seems to have dropped off of our next question will come it will be a follow up from James Smith. Please go ahead.
Thanks for me not wanting to hog. The microphone is there an update you can share with regard to the potential.
Well, it's been out of the U C. W. I S Division.
It's still on track.
On the change in instead of what we told you last quarter.
Got it thank you.
Our next question will come from Tim Delaney with the margin. Please go ahead.
Hi, guys.
Could you comment on the change in the reporting for the N R. S on staff.
Yes sure.
Yeah, I mean, we.
We decided not to show up.
As of the metric the amount of point.
Point of sales.
The next day.
And the Macbook.
Which is the method that begins to show and see a few quarters ago.
Sound debt to be a better metric to help investors and being able to associate battle of the growth of the Pos.
The Domino's and the SaaS growth on the revenue.
As opposed to using billable.
Uh huh.
<unk> because the billable information from.
Valleys, depending on some of the billing terms to do some customers.
And some of the collection terms.
Yeah, a little more of a spotty.
Using the active some of those no shows and bad debt trends.
And in the bulk subsequent number as well because typically you may have more billable units of them active units are quite example, you for.
For the weekday lunch scope of location the on Super Bowl retailer.
Both of those.
Situations now, even though it might be billing the weekday the bill.
It might not be active and we define active muni debt on that transaction activity could go into the humans. So we found that the showing active.
You'll get the level of.
Some of those will be on by the way to show now.
The Kpis brand in a more consistent the way we saw revenue increase.
Great. Thank you.
Yeah.
Our next question will come from Brian Warner from a private Investor. Please go ahead.
Yes.
Alright, sorry about that for I'm not sure what when I got cut off but I.
At the request choose 1 was maybe you can give us a little more color on what youre doing in mobile top up.
To take share there because that was done was quite of Cora and maybe you can frame the opportunity as you see it over the next few years for for that piece of traditional.
Secondly, maybe you could touch on how you on mobile offering with T mobile is going.
And then finally, maybe you can give us a little color on the the timing and anything else you might want to share on the on the net tubes on the spin off.
Maybe not in order of the way you ask them, but on the on the third 1 I mean, I think that we answered that question to a previous caller. The theres no change in the timeframe that we provided.
Last quarter.
As far as the the the envy of now for T mobile, it's actually going very well we had.
Our best.
The growth so far on the.
The past couple of weeks.
And you know again, it's a it's.
It's the product that has that had a hard time as everyone knows the you know.
Uh huh launching but what we're actually doing pretty pretty good numbers so far.
As far as the.
I am to you as I said it it really was the very broad based.
Again, you know.
Throughout every channel that we sell internationally domestic.
On B to B wholesale et cetera, we really.
We really did well you know of.
Cross the board of.
And again, the Theres always you know market opportunities.
And you know, we we try to capitalize on them when they come and.
We believe the you know a lot of the you know the small acquisitions that we've done and the.
The space or helping with the both in terms of the technology that we've.
The acquired as well as.
On the expertise of Needham.
And pricing information that we now have and that's allowed us to capture a larger percentage of the market.
And we think of the and we think of a very very very growing market in general.
The amount of the data that people are using worldwide continues to grow and the need for people to the.
The 2.
The top up you know both their loved ones, calling cause of Huawei.
Their own comes on the country continues to grow on we're providing the terrorism in both places book domestically as well as internationally.
I got you sounds great congratulations.
Okay.
Again, if you have a question. Please press Star then 1.
As there are no more questions. This concludes our question and answer session and conference call. Thank you for attending today's presentation. You may now disconnect.