Q4 2023 IDT Corp Earnings Call
Good evening and welcome to the IDT Corporation's fourth quarter and full fiscal year 2023 earnings call in today's presentation, Idt's management will discuss Idt's financial and operational results for the three and 12 months periods ended July 31 2023.
Speaker 1: Good evening and welcome to the IDT corporations fourth quarter and full fiscal year 2023 earnings call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the three and 12 month periods ended July 31st, 2025.
During remarks by Idt's, Chief Executive Officer, Shmuel Jonas all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero <unk>.
Speaker 1: During remarks by IDT's Chief Executive Officer, Shmuel Jonas, all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0.
Speaker 1: After Mr. Jonas remarks, Marcelo Fisher, IDT's Chief Financial Officer, will join Mr. Jonas for Q&A.
After Mr. Jonas remarks, Marcelo Fischer Idt's, Chief Financial Officer will join Mr. Jonas for Q&A any.
Speaker 1: 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 risk and uncertainties that may cause actual results to differ materially from those which the company anticipates.
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 those which the company anticipates.
Speaker 1: These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the reports that IDT files periodically with the SEC.
These risks and uncertainties include but are not limited to specific risks and uncertainties discussed in the reports that I D. T files periodically with the SEC.
Speaker 1: IDT 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 fore-
IDT 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 Q&A session Idt's management may make reference to non-GAAP measures, including adjusted EBITDA non-GAAP net income and non-GAAP earnings or loss per share a.
Speaker 1: In their presentation or in the Q&A session, IDT's management may make reference to non-GAAP measures including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings or loss per share.
Speaker 1: The schedule provided in IDT's earnings release reconciles adjusted EBITDA, non-GAAP , net income, and non-GAAP earnings or loss per share to the nearest corresponding GAAP.
A schedule provided in Idt's earnings release reconciles adjusted EBITDA, non-GAAP net income and non-GAAP earnings or loss per share to the nearest corresponding GAAP measures.
Speaker 1: Please note that the IDT earnings release is available on the investor relations page of the IDT Corporation website.
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 on form 8-K with the SEC.
Speaker 1: The earnings release has also been filed on Form 8K with the SEC.
I will now turn the conference over to Mr. Jonas.
Speaker 2: Thank you operator welcome to earnings conference call after my remarks. Marcelo Fisher will be joining me virtually. First of all I just want to.
Thank you operator.
Welcome to Itt's earnings Conference call. After my remarks, Marcelo Fischer will be joining me virtually.
First of all I just want to say.
Speaker 2: It's really been a very hard week, really tragic week in Israel, and our thoughts and prayers are with our family, our friends, our colleagues.
They've been a very hard.
Week really tragic week in Israel, and our thoughts and prayers are with our family or friends or colleagues.
Speaker 2: Some of who are on the front lines and may they God willing be safe.
Some of who are on the front lines and maybe god willing be safe.
Speaker 2: My brief remarks today focus on the fourth quarter of fiscal year 2023 and the three months ended July 31st.
My brief remarks today focus on the fourth quarter of fiscal year 2023 in the three months ended July 31 for.
Speaker 2: For more detailed discussion of our financial and operational results for the fourth quarter and full fiscal year 2023, please read our earnings release filed earlier today and our Form 10-K that we expect to file with the SEC on Monday. Our results this quarter were highlighted by the continued expansion of our three high growth, high margin businesses, while our traditional communications segment performed as expected.
For more detailed discussion of our financial and operational results for the fourth quarter and full fiscal year 2023. Please read our earnings release filed earlier today and our Form 10-K that we expect to file with the FCC on Monday.
Our results this quarter were highlighted by the continued expansion of our three high growth high margin businesses, while our traditional communications segment performed as expected.
Speaker 2: At NRS, we have ramped up our investment to accelerate the growth of the NRS terminal and payment networks. And we delivered record quarterly increases in both net new terminals and net new NRS pay accounts. With that tailwind, merchant services Q4 revenue increased 79% year over year. Advertising and data revenue, while 40% below the year ago peak, improved sequentially. And advertising and data revenue increased 7% from the prior quarter and is on track for a larger sequential increase in the current quarter.
And interest we have ramped up our investment to accelerate the growth of the interest terminal and payment networks and we delivered record quarterly increases in both net new terminals and net new interest pay accounts with that tailwind merchant services Q4 revenue increased 79% year over year advertising and data revenue, while 40% below a year ago.
<unk> improved sequentially in advertising data revenue increased 7% from the prior quarter isn't it and is on track for a larger sequential increase in the current quarter.
Speaker 2: NRS results also reflected our investment in growth initiatives, including the development of new features and functionalities, as well as our new tablet POS.
Interest results also reflected our investment in growth initiatives, including development of new features and functionalities as well as our new tablet P O S.
And net the phone subscription revenue increased 19% year over year powered by the increase in seats served in an increase in average subscription revenue.
Speaker 2: And Netafone subscription revenue increased 19% year over year, powered by the increase in seats served and the increase in average subscription revenue.
Speaker 2: per seat in Latin America. Here too, we are investing in initiatives to expand the business. In the coming quarters, we are preparing to roll out two exciting premium services, NetPhone AI and call center essentials that we expect to enhance ARPU and margins across our markets.
Per seat in Latin America here too we are investing in initiatives to expand the business in the coming quarters. We are preparing to rollout two exciting premium services net phone AI and call Center essentials that we expect to enhance ARPA and margins across our markets within our Fintech segment bus money, our international remittance business.
Speaker 2: Within our fintech segment, Boss Money, our international remittance business, continued to benefit from the synergies between its retail and direct-to-consumer channels and from our cross-marketing programs within the larger Boss ecosystem. Also in our fintech segment, we've begun enrolling customers in our new mobile banking app, Elroy.
<unk> to benefit from the synergies between retail and direct to consumer channels and from our cross marketing programs within the larger bus ecosystem.
So in our Fintech segment, we've begun enrolling customers and our new mobile banking App Elroy.
Speaker 2: Elroy is replete with innovative features to help underbanked and unbanked customers integrate into the U.S. financial mainstream, while appealing to anyone who despises bank fees but appreciates financial convenience.
Alrighty is replete with innovative features to help underbanked and unbanked customers integrate into the U S financial mainstream while appealing to anyone who despises paying fees, but appreciate the financial convenience.
Speaker 2: Within our traditional communications segment, we are working to further streamline the operations of our boss revolution calling in IDT global businesses while pushing new initiatives to return our IDT digital payments business to growth.
Within our traditional communications segment, we are working to further streamline the operations of our boss Revolution, calling and IDT global businesses, while pushing new initiatives to return of IDT digital payments business to growth.
Speaker 2: Last week, the chance recording Delaware dismissed all claims against IDT in the class action lawsuit related to the straight path sale and found that the plaintiff and the class suffered no damage.
Last week, the Chancery court in Delaware dismissed all claims against IDT in the class action lawsuit related to the straight out sale and found that the plaintiff in the class suffered no damage.
Speaker 2: We appreciate the time the court invested in resolving this matter and salute our legal team whose sound judgment and tireless efforts proved invaluable throughout the course of the litigation.
We appreciate the time the court invested in resolving this matter in salute, our legal team, who sound judgment and tireless efforts proved invaluable throughout the course of the litigation.
Speaker 2: As we noted in our earnings release, we continue to buy back our stock in the 4th quarter and after the start of fiscal 2024. Consistent with our view that the plaintiff's claims in this case were premised on flawed assumptions and that justice would prevail.
As we noted in our earnings release, we continue to buyback our stock in the fourth quarter and after the start of fiscal 2024, consistent with our view that the plaintiff's claims in this case, we're premise on flawed assumptions and the justice would prevail.
Speaker 2: as well as the fact that we thought our stock was very undervalued, especially given the strong performance of our three high-growth businesses. Before we move on to the Q&A, I want to again thank our employees for their great work and our stockholders for putting their faith and their capital with us. Nell Marcello and I will be happy to take your questions.
As well as the fact that we thought our stock was very undervalued, especially given the strong performance of our three high growth businesses.
We move on to the Q&A I want to again, thank our employees for their great work and our stockholders for putting their faith in their capital with US no more so than I would be happy to take your questions.
Yes.
Thank you.
Speaker 1: We will now begin the question and answer session. To ask a question, you may press star, then one, on your touch tone phone.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before pressing the star keys.
Speaker 1: If you are using a speakerphone, please pick up your handset before pressing the star keys. To withdraw your question, please press star then 2.
To withdraw your question. Please press Star then two we.
We will now pause momentarily to assemble our roster.
Okay.
Yeah.
Okay. Our first question comes from Alex War with MIT. Please.
Speaker 1: Okay, our first question comes from Alex Ror with Emmett. Please proceed.
Please proceed.
Hi, guys.
Speaker 3: So just quickly on mobile top-up, I was hoping you could speak to that business.
So just quickly on mobile top up Ah I was hoping you could speak to that business in particular, and if you know if theres any hopes that it's been a while now if there's any hope for a bottoming there anytime soon.
Speaker 3: particular and if you know if there's any hope it's been a while now if there's any hope for a bottoming there anytime soon.
I I think the answer is yes, you know.
Speaker 2: I think the answer is yes.
In terms of you know.
Speaker 2: In terms of our, I will say our gross margin on it, it's actually been improving of late. We've been selling.
Our I'll say our girl.
Gross margin on it it's actually.
He'd been improving of late you know we were we've been selling.
You know more of it through our direct to consumer channels. Unfortunately, you know that the wholesale business has not come back as quickly as we would've.
Speaker 2: you know, more of it through our direct-to-consumer channels. Unfortunately, you know, the wholesale business has not come back, you know, as quickly as we would have, you know, liked or expected, but, you know, our new platform just, you know, recently got launched, and we've actually brought on, I think, about five new customers just this week alone onto it. So we're very hopeful that we'll see some good revenue growth going forward on it.
Liked or expected but.
Our new platform just recently got launched and we've actually brought on I think about five new customers just this week alone onto it.
So we're very hopeful that we'll see some good revenue growth going forward on it.
Great and just one more so obviously, we can see if we can see the the increase in spending and N. R. S. On the SG&A line do you I mean, what gives you kind of you know a a period of significantly increase spending and now you're going to wait and see or are you are you are.
Speaker 3: Great, and just one more. So obviously, we can see the increase in spending in NRS on the SG&A line. I mean, was this kind of a period of significantly increased spending and now you're going to wait and see, or should we expect to see kind of similar significant year over year increases off of this new base in the NRS SG&A line.
Should we expect to see kind of similar significant year over year increases often this new base and and the interest SG&A line.
Speaker 4: No, I expect SGA to be much more well controlled than it has been, both in NRS and across the company. Great, thank you guys.
No I I expect SG&A to be much a more.
More well control than than it has been.
You know both in N or S and across the company.
Great. Thank you guys.
Okay. Our next question comes from it and you go Alonso.
Please state your affiliation your line is live.
Hello, Congrats on the strong deployments in N R S.
Speaker 5: Hello, congrats on the strong deployments in NRS.
Speaker 5: I wanted to ask about the new tablets that you mentioned. I know that your supplier, Pax Global, has released this new product line called ILLIS. And I was wondering if this is going to trigger you expanding into new markets, in particular in the restaurant market, and completing against the likes of those and those people.
I wanted to ask about the new tablets that you mentioned I know that you are a supplier box global has released these new product line called <unk> and I was wondering if this is going to trigger you expanding into new markets in particular in the restaurant market and competing against the likes of supposed and those people.
Speaker 5: What are the initial results from the U.S. dollar plan?
What are the initial results from the Atlas Blah Blah blah.
Well.
Speaker 2: Um, well, we actually don't use that specific product from packs. We do use other products from past.
We actually don't use that specific product from packs, we do use other products and packs.
Speaker 2: Although we have looked into that product in specific.
Although we have we have looked into that product and specific.
Speaker 2: As far as your question related to restaurants, we're in the process of acquiring a company that's in that space.
As far as you know.
Your question related to restaurants, you know what.
We're in the process of acquiring a company that's in that space already a very small company.
Speaker 2: already a very small company and we think that that will help us get into it. That being said, our goal is not to be a toast competitor or it's really to be for...
And we think that that will help us get into it that being said you know our goal is not to be you know, a you know a toast competitor or or or.
It's really to be for.
Speaker 2: restaurants that have a convenience store or something similar to it attached to their store. So I would say it's not going to be, you know, our goal is not to be a toast.
Restaurants that have you know a convenience store or or you know something similar to it attached to their store and so I would say, it's not going to be you know our goal is not to be a toast.
Wonderful that's great to hear especially considering that a lot of Ami ground, the AUM business as our restaurants, and we know how you Calvert brand among immigrants in the U S. So that's great news and you kind of answered already one follow up question, but he was around the capital allocation. So after.
Speaker 5: Wonderful. That's great to hear, especially considering that a lot of immigrant-owned businesses are restaurants and we know how you have a brand among immigrants in the U.S. So that's great news.
Speaker 5: And you kind of answered already one follow-up question, but it was around the capital allocation. So after the result of the litigation, you have unlocked some capital. I assume you had a supervision in waiting for the outcome of the litigation. And now that you have an outcome, I was wondering how are you going to allocate that capital other than this allocation, this acquisition that you already mentioned?
The result of the litigation you have unlocked some copied I'll, let you I assume you're kind of supervision.
Yeah.
Waiting for the outcome of the litigation and now that you have an outcome I was wondering how are you going to allocate that capital other than diesel okay. And these are core system that you already mentioned.
I mean, I think that we're you know we're on the lookout for you know some smart acquisitions and you know investing in growth are you know when we're getting good returns on those investments.
Speaker 2: I mean, I think that we're on the lookout for smart acquisitions and investing in growth when we're getting good returns on those investments. So I don't, I mean again, I expect us to keep...
So I don't I mean, again I expect us to keep.
Speaker 2: you know, more cash on the balance sheet than, you know, some investors believe is necessary, but, you know, at the same time, you know, expect us, you know, to deploy some of that cash to, you know, get good returns for our investors.
You know more cash on the balance sheet. Then then you know some investors believe is necessary, but you know at the same time, you know expect us.
To deploy some of that cash to get good returns for our investors.
Okay. So have you well.
Well do you intend to proceed with repurchases ones they are.
Speaker 5: Well, do you intend to proceed with repurchases once the
This earnings release, I mean, you've been quiet so far so.
Speaker 5: discerning release. I mean, you've been inquiring it period so far, so...
Speaker 2: you started a plan of the allocation? It's very possible. I mean, you know, again, you know, you've seen, you know, I mean, just in, you know, the past, I don't know, you know, year, we've probably purchased over 15 million dollars of stock. So, yeah, I mean, I expect us to continue to purchase shares, you know, when the price is, you know, low.
You started it probably won't be allocation. It's it's it's very possible. I mean, you know again you know you you've seen you know I mean, just in the past I don't know you know year, we probably purchased over $15 million of stock. So yeah, I mean, I expect us to continue to purchase shares you know.
When the prices.
You know low.
Speaker 5: Wonderful. And last question is about an unmet 2 phone.
Wonderful and last question you said about a net two phone.
Do you have your own platform or did you use the platform off another provider.
Speaker 5: Do you have your own platform or do you use the platform of another provider?
Speaker 2: The answer is both. You know originally when we got into the business we used a third-party platform and eventually we built our own. So today we unfortunately have not migrated everyone off of.
The answer is both you know originally when we got into the business. We used a third party platform and eventually we built our own. So today, we unfortunately have not migrated everyone off of.
Speaker 2: You know, I will call it a rented platform, but we have people on both a rented platform as well as our own platform. And hopefully, you know, over time, we'll move everyone off of the rented platform and onto ours. Ok.
I I would call it a rented platform, but but we have people on both our rented platform as well as our own platform and hopefully you know over time will move everyone off of the rented platform and onto ours.
Okay. Thank you a lot and congratulations again thank.
Thank you.
Speaker 1: The next question comes from Jason Lustig. Please announce your affiliation, then pose your question.
The next question comes from Jason Lustig. Please announce your affiliation then pose your question.
Okay.
Speaker 6: Hey, Shmuel, I know you and I'm sure many other IDC employees have family and friends in Israel, so just wanted to say my thoughts are with you all.
And small I mean, I know you and I'm sure many other.
Their I D C employees have family and friends in Israel. So just wanted to say my thoughts are with you all.
Thank you.
So it's all you know we saw that in our S. A really nice step up in merchant services revenue per unit.
Speaker 6: So we saw in NRS a really nice step up in merchant services revenue per unit.
Speaker 6: Did we expect continued growth in that ARPU or is merchant services more likely to grow kind of more in line with units going forward? And can you speak to some of the drivers?
We expect continued growth in that our pool or as merchant services is more likely to grow kind of more in line with units going forward and can you speak to some of the drivers.
Speaker 2: Again, I mean, there's definitely been, I will say a higher take rate for us. Both in terms of new sales that are coming with merchant services. So, I mean, I think that we've done a good job of incentivizing our sales organization.
Hum.
Again, it's not I mean, there's definitely been you know a I'll say a higher take rate you know for US both in terms of new sales that are coming with merchant services. So I mean, I think that we've.
We've done a good job of incentivizing our sales organization.
No.
Speaker 2: both distributor, direct, etc., to really try as much as you possibly can not to sell a POS that doesn't include merchant services.
Both distributor direct et cetera, you know to to to.
Really you know try as much as you, possibly can you know not to sell a P. O S that doesn't include merchant services.
Speaker 2: And you can see that very clearly in the numbers.
And you can see that you know you know very clearly in the numbers.
Speaker 2: So I expect there to be a higher percentage of our terminals just in general.
So I expect there to be a higher percentage of you know our terminals just in general having merchant services for them and an end and therefore, you're just going to see again, you know less and less cash being used.
Speaker 2: having merchant services from them and therefore you're just going to see again less and less cash being used.
Speaker 2: you know, in stores and, you know, and more and more merchant processing coming from it.
In stores, and you know and more and more merchant processing coming from it I I don't know if every quarter. You know we'll have the same you know inquiries like we had this quarter, but but every quarter will increase.
Speaker 2: I don't know if every quarter, you know, we'll have the same, you know increase like we had this quarter but every quarter will.
Okay.
Speaker 6: Okay. And you mentioned in the release a seasonal uptick you're expecting in advertising. How much of that is macro recovery and how much of that is kind of advertising seasonality into the holidays?
And you mentioned in the release a seasonal uptick you're expecting in advertising is is that how much of that is macro recovery and how much of that is kind of advertising seasonality into the holidays.
Speaker 2: I wish I knew the answer to that question. Again, I don't even know if it's really seasonal. I mean, we're pre-the holiday season and we've seen quite a big jump. Hopefully, the holiday season will be even better. I wish I could answer the question better, but I don't have an answer.
I wish I knew the answer to that question you know again I don't even know if it's really seasonal I mean like you know where were pre the holiday season, and you know we we've seen quite a big jump you know hopefully hopefully the holiday season will be even better.
I'm, sorry, I I wish I could answer the question you know better, but I don't have an answer.
Alright, thank you.
Thank you.
Again.
Speaker 1: If you have a question, please press star then 1.
If you have a question. Please press Star then one.
Yeah.
As there are no more questions. This concludes our question and answer session.
And the conference call. Thank you for attending today's presentation you may now disconnect.
Yeah.
Yeah.
Yeah.
Operator: Good evening and welcome to the IDT Corporation's fourth quarter and full fiscal year 2023 earnings call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the three and twelve month periods ended July 31st, 2023. During remarks by IDT's chief executive officer, Samuel Jonas, all participants will be in listen only mode. Should you need assistance, be signal conference specialist by pressing the star key followed by zero.
Operator: After Mr. Jonas remarks, Marcelo Fischer, IDT's chief financial officer will join Mr. Jonas for Q&A.
Operator: 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 risk and uncertainties that may cause actual results to 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 IDT files periodically with the SEC. IDT 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.
Operator: In their presentation or in the Q&A session, IDT's management may make reference to non-GAAP measures including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings or loss per share. A schedule provided in IDT's earnings release reconciles adjusted EBITDA, non-GAAP net income and non-GAAP earnings or loss per share to the nearest corresponding GAAP measures.
Operator: 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 on form 8K with the SEC.
Samuel Jonas: I will now turn the conference over to Mr. Jonas. Thank you, operator. Welcome to IDT's earnings conference call.
Samuel Jonas: After my remarks, Marcello Fisher will be joining me virtually.
Samuel Jonas: First of all, I just want to say it's really been a very hard week, really tragic week in Israel and our thoughts and prayers are with our family, our friends, our colleagues, some of who are on the front lines and may they God willing be safe. My brief remarks today focus on the fourth quarter of fiscal year 2023 and the three months ended July 31st.
Samuel Jonas: For more detailed discussion of our financial and operational results for the fourth quarter and full fiscal year 2023, please read our earnings release filed earlier today and our form 10K that we expect to file with SEC on Monday. Our results this quarter were highlighted by the continued expansion of our three high growth high margin businesses while our traditional communications segment performed as expected. At NRS, we have ramped up our investment to accelerate the growth of the NRS terminal and payment networks and we delivered record quarterly increases in both net new terminals and net new NRS pay accounts.
Samuel Jonas: With that tailwind merchant services, Q4 revenue increased 79% year over year. Advertising and data revenue while 40% below the year ago peak improves sequentially and advertising and data revenue increased 7% from the prior quarter and is on track for a larger sequential increase in the current quarter. NRS results also reflected our investment in growth initiatives, including development of new features and functionalities, as well as our new tablet POS. A net-to-phone subscription revenue increased 19% year-over-year, powered by the increase in seed served and the increase in average subscription revenue per seed in Latin America.
Samuel Jonas: Here, too, we are investing in initiatives to expand the business. In the coming quarters, we are preparing to roll out to exciting premium services, net-to-phone AI, and call center essentials, that we expect to enhance ARPU and margins across our markets. Within our Fintech segment, Boss Money, our International, Renewed and Business continued to benefit from the synergies between its retail and direct consumer channels and from our cross-marketing programs within the larger Boss ecosystem.
Samuel Jonas: Also, in our Fintech segment, we've begun rolling customers in our new mobile banking app, Elroy. Elroy is replete with innovative features to help underbank and unbank customers integrate into the U.S, financial mainstream, while appealing to anyone who despises bank fees but appreciates financial convenience. Within our traditional communication segment, we are working to further streamline the operations of our Boss Revolution, calling in IDT Global Businesses, while pushing new initiatives to return our IDT Digital Payments Business to growth.
Samuel Jonas: Last week, the chance recording Delaware dismissed all claims against IDT in the Class Action lawsuit related to straight path sale and found that the plaintiff and the class suffered no damage. We appreciate the time the court invested in resolving this matter and so we are a legal team whose sound judgment and tireless efforts proved invaluable throughout the course of litigation. As we noted in our earnings release, we continue to buy back our stock in the fourth quarter and after the start of fiscal 2024, consistent with our view that the plaintiff's claims in this case were premise on flaw assumptions and that justice would prevail. As well as the fact that we thought our stock was very undervalued, especially given the strong performance of our three high growth businesses.
Samuel Jonas: Before we move on to the Q&A, I want to again thank our employees for their great work and our stockholders for putting their faith in their capital with us.
Samuel Jonas: Now we're still and I will be happy to take your questions. Thank you.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the star keys. To withdraw your question, please press star then two.
Operator: We will now pause momentarily to assemble our roster.
Alexander Rohr: Okay, our first question comes from Alex Rohr with Emmett. Please proceed.
Samuel Jonas: Hi guys. So just quickly on a mobile top up, I was hoping you could speak to that business in particular. And if there's any hope, it's been a while now, if there's any hope for a bottoming there anytime soon. I think the answer is yes. You know, in terms of our, I will say our growth margin on it, it's actually been improving of late. You know, we've been selling. You know, more of it derived direct to consumer channels.
Samuel Jonas: Unfortunately, you know, the whole sales business has not come back, you know, as quickly as we would have, you know, liked or expected. But, you know, our new platform just, you know, recently got launched and we have actually brought on, I think, about five new customers just this week alone onto it. So we're very hopeful that we'll see some good revenue growth going forward on it.
Samuel Jonas: Great. And, and just one more. So obviously, we can see we can see the, the increase in spending in NRS on the SGNA line. Do you, I mean, would this kind of, you know, a, a period of significantly increased spending and now you're going to wait and see or are you, you know, are you, should we expect to see kind of similar significant year over year increases off of this new base in, in the NRS SGNA line? No, I expect SGNA to be much more well controlled than it has been. You know, both in NRS and across the company.
Samuel Jonas: Great. Thank you guys.
Operator: Okay.
Enigo Alanzo: Our next question comes from Enigo Alanzo.
Samuel Jonas: Please state your affiliation. Your line is live. Hello, congrats on the strong deployments in NRS. I wanted to ask about the new tablets that you mentioned. I know that your supplier packs global has released this new product line called Elis. And I was wondering if this is going to trigger you expanding into new markets in particular in the restaurant market and completing against the likes of those and those people. Where are the initial results from the Elis bullet line?
Samuel Jonas: Well, we actually don't use that specific product from packs. We do use other products from packs. Although we have, we have looked into that product in specific. As far as your question related to restaurants, you know, we're in the process of acquiring a company that's in that space, already a very small company. And we think that that will help us get into it. That being said, our goal is not to be, you know, a toast competitor or it's really to be for restaurants that have, you know, a convenience store or something similar to it attached to their store.
Samuel Jonas: So I would say it's not going to be, you know, our goal is not to be a toast. Wonderful. That's great to hear, especially considering that a lot of immigrant owned businesses are restaurants and we know how you have a brand among immigrants in the US. So that's great news.
Samuel Jonas: And you kind of answer already one follow up question, but it was around the capital allocation. So after the result of the litigation, you have unlocked some capital, like I assume you had a supervision in waiting for the outcome of the litigation. And now that you have an outcome, I was wondering, how are you going to allocate that capital? Other than this allocation, this acquisition that you already made. I mean, I think that we're on the lookout for smart acquisitions and investing in growth when we're getting good returns on those investments.
Samuel Jonas: So I mean, again, I expect us to keep more cash on the balance sheet than some investors believe is necessary, but you know, at the same time, you know, expect us, you know, to deploy some of that cash to, you know, get good returns for our investors. Okay.
Samuel Jonas: So have you, well, do you intend to proceed with re-purchases once the discerning release? I mean, you've been inquiring it so far. So you started a plan of the allocation. It's very possible. I mean, you know, again, you've seen, you know, I mean, just in the past, I don't know. You know, a year we've probably purchased over $15 million a stock. So yeah, I mean, I expect us to continue to purchase shares, you know, when the price is low. Wonderful.
Samuel Jonas: And last question is about a net-to-phone. Do you have your own platform, or do you use the platform of another provider? The answer is both. You know, originally when we got into the business, we used a third-party platform. And eventually we built our own. So today we unfortunately have not migrated everyone off of. You know, I will call it a rented platform, but we have people on both a rented platform as well as our own platform. And hopefully, you know, over time we'll move everyone off of the rented platform and on to ours.
Operator: Okay.
Unknown Attendee: Thank you a lot and congratulations again. Thank you.
Jason Lustig: The next question comes from Jason Lustig.
Jason Lustig: Please announce your affiliation. Then pose your question. Hey. I know you, and I'm sure many other ID team employees have family and friends in Israel. So just wanted to say my thoughts are with you all.
Samuel Jonas: Thank you. So it's all, you know, we saw the in the NRS a really nice step up in merchant services revenue per unit. Should we expect continued growth in that R Poo, or is merchant services more likely to grow kind of more in line with units going forward? And can you speak to some of the drivers? Again, I mean, there's definitely been, you know, I will say a higher, you know, take rate, you know, for us, both in terms of, you know, new sales that are coming with merchant services.
Samuel Jonas: So I mean, I think that we've, you know, done a good job of incentivizing, you know, our sales organization, you know, both, you know, distributor direct, etc. You know, to really, you know, try as much as you possibly can, you know, not to sell a POS that doesn't include merchant services. And you can see that, you know, very clearly in the numbers. So I expect there, you know, to be a higher percentage of, you know, our terminals just in general, having merchant services from, and therefore you're just going to see, again, you know, less and less cash being used, you know, in stores and, you know, and more and more merchant processing coming from it.
Samuel Jonas: I don't know if every quarter, you know, we'll have the same, you know, increase like we had this quarter, but, but every quarter will increase.
Samuel Jonas: Okay. And you mentioned in the release a seasonal uptake you're expecting an advertising is that how much of that is macro recovery and how much of that is kind of advertising seasonality into the holidays? I wish I knew the answer to that question. You know again, I don't even know, you know, if it's really seasonal, I mean like, you know, we're pre the holiday season and you know, we've seen quite, you know, a big jump. You know, hopefully the holiday season will be, you know, even better.
Samuel Jonas: So I wish I could answer the question, you know, better, but I don't have an answer.
Operator: All right.
Operator: Thank you.
Operator: Again, if you have a question, please press star then one.
Operator: As there are no more questions, this concludes our question and answer session and the conference call.
Operator: Thank you for attending today's presentation.
Operator: You may now disconnect.
Operator: Thank you.