Operator: Good evening, and welcome to the IDT Corporation's Fourth Quarter and Full Fiscal Year 2024 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 31, 2024. During prepared remarks by IDT's Chief Executive Officer, Shmuel Jonas, all participants will be in listen-only mode. [Operator Instructions] After Mr. Jonas' remarks, Marcelo Fischer, IDT's Chief Financial Officer, will join Mr. Jonas for Q&A with investors. 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. 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. 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 per share. A schedule provided in IDT earnings release reconciles adjusted EBITDA, 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 on Form 8-K with the SEC. I will now turn the conference over to Mr. Jonas.

Shmuel Jonas: Thank you, operator. Welcome to IDT's earnings conference call. My remarks today will focus on the fourth quarter and full fiscal year 2024, the three and 12 months ended July 31. For a more detailed discussion of our financial and operational results for the quarter, please read our earnings release filed earlier today and our Form 10-K that we expect to file with the SEC next Tuesday. IDT delivered a strong fourth quarter, highlighted by record adjusted EBITDA to cap off our 2024 fiscal year. NRS, BOSS Money and net2phone all performed well, while our Traditional Communications segment businesses delivered solid cash flows. At NRS, we continued to make good progress on our strategic priorities, expanding our customer base in the large independent retailer market, increasing the penetration of NRS Pay, developing point of sale solutions for new verticals, and building out our advertising tech, all while deploying hundreds of new locations every month. At BOSS Money, we again achieved year-over-year transaction volume and revenue growth of over 40% during the fourth quarter. BOSS Money's economics continue to improve as the business scales, which enabled our Fintech segment to achieve its first quarter of positive cash flow generation. net2phone is steadily building its customer base, again adding approximately 12,000 net new seats, including 2,000 CCaaS seats, in the fourth quarter, while also doing a good job of controlling its costs. As a result, net2phone's adjusted EBITDA margin more than doubled compared to the year-ago quarter. We are focused on further improving net2phone's bottom-line through continued volume growth and increasing revenue per user, driven by expansion of our higher-revenue, higher-margin CCaaS offering and by migrating customers to premium plans and features, including plans with new AI-powered functionalities. In our Traditional Communications segment, we significantly improved the economics of our business, and began to see the expected payoff from cost reduction initiatives we implemented throughout fiscal year 2024. In fiscal 2025, we will continue to pursue opportunities to improve the performance of our business and lower costs while maximizing cash flows and reinvesting in customer acquisition. IDT enters fiscal 2025 with strong momentum. NRS, BOSS Money and ne2phone are all profitable and each has a long growth runway. In the year ahead, we will drive their continued expansion and invest in new, exciting growth initiatives that leverage our strategic assets and expertise. We remain committed to maximizing the cash generation from each of our segments, building dynamic businesses for long-term value creation, and returning value to our stockholders through our investments in new initiatives, share buybacks and dividends. Lastly, I'd like to thank everyone at IDT who has really worked very, very hard to deliver the numbers that we deliver to you today. Oftentimes, it just looks like numbers on a paper, but it's really a lot of work. Now, Marcelo and I will be happy to take your questions. Thank you.

Operator: We will now begin the question-and-answer session. [Operator Instructions] Okay. Our first question comes from [Inigo Alonzo with Moram Capital] (ph). Please proceed.

Unidentified Analyst: Hello. Congratulations once again on the amazing results. I had a question first. Well, a couple of questions on net2phone. I wanted to ask about the MetaSwitch end-of-life. Is this going to be a tailwind for your business, or you don't really share the platform that you own with other UCaaS players?

Shmuel Jonas: It's not -- as far as I know, it has no effect on our business.

Unidentified Analyst: Okay. And then, regarding the migration in net2phone from the rented platform to your own platform, how -- in a percentage, how complete are you with the migration? And are we expecting to tap synergies there?

Shmuel Jonas: Yeah, I mean, we expect to actually start migrating more customers over the next quarters. Basically no new customers go on to any other platform other than our own. And we hope to see savings from it and better satisfaction from our users once they're on net2phone's homegrown platform.

Unidentified Analyst: Do you have any hard timeline on when you would like to see the full transition into your own platform?

Shmuel Jonas: No.

Unidentified Analyst: Okay. And the last question is about NRS. In previous calls, you have talked about a potential future NRS spin-off. Obviously, market circumstances are not the best today, but what type of circumstances would you like to see in the market and in your own business in order to do the spin-off?

Shmuel Jonas: Again, I mean, right now we're focused on building NRS into a multibillion-dollar company. And when the time is right, we will have the ability to spin-off or do some other type of transaction. However, at the moment, we're very happy with how it's doing internally.

Operator: Okay. The next question comes from Greg McKinley. Please announce your affiliation and pose your question.

Greg McKinley: Yeah. Good afternoon. Greg McKinley with Asymmetric Management. Couple of questions. First of all, on the money transfer business, it looked like we crossed the threshold there and we're now EBITDA and operating income positive. Can you help us understand how we should think about sort of incremental margins there now that we've crossed that line? We're growing very rapidly on the top-line. What's your view for margin expansion there? And what kind of big investments, if any, do you need to make there to continue to support growth, or is it more of a margin leverage business now?

Shmuel Jonas: Yeah. I'm going to let Marcelo answer most of the question, but I will say that from a very high level, I don't think that we're -- our goal is to expand margins tremendously on a per transaction basis. I think our main goal is to make sure that our customers stay with us for very, very long term. Even if that means slightly lower margins than we could achieve if we -- tomorrow if we decided to do so. So, to us, it's really about growing the number of customers and making sure that every time that they think about sending a money transfer, they only think about using us. But with that I'll...

Greg McKinley: Yeah, thank. And just to clarify my question, I wasn't really asking so much from a customer standpoint. I was thinking more of the business unit. It looks like it now flipped to EBITDA positive. And so anyway, just wanted to make sure I was clear on that.

Marcelo Fischer: Yeah. Hi, Greg. It's Marcelo.

Greg McKinley: Hi.

Marcelo Fischer: So, correct, I mean, I think this 2024 was just a fantastic year for BOSS Money from all angles. As you see, it's the year that we crossed the $100 million revenue mark. We are now doing more than 20 million transactions a year on a run rate. It's also the first year that we became -- BOSS Money became EBITDA positive and became strongly EBITDA positive. We generated about $4 million in positive EBITDA. And by doing so, it lifted not -- the entire Fintech segment, which includes also some other businesses which are much more on investment mode, some of them are still pre revenue. So, BOSS Money has been a great engine for both top-line and bottom-line growth. We finished our budgeting process for 2025 and our fiscal year had just begun about a month ago. We believe that BOSS Money for '25 will probably deliver more than $10 million of EBITDA, more than double the EBITDA that they generated in 2024. And what's driving that is all that you're seeing, right, is the continued around 40% growth both in transactions and in revenues coming both on the digital channel and the retail channel. We continue to see that strength on the top-line as we go into Q1 during the month of August, September. But more importantly, now with the leadership of Shmuel and Bill Pereira, we really have tackled the business in terms of improving operational efficiencies, a lot of automation, and that's starting to show itself on the bottom-line on managing that SG&A to allow the business to scale at a faster clip. And our focus actually is going to be shifting a little bit now as we start the New Year, not decided to push for continued 40% type of growth, but a little bit more of a focus on trying to improve what for us is the most important metric in this business, which is gross profit, gross margin per transaction, what we call GMPT. We are starting to make some changes in pricing to generate higher GMPT, even if that costs a little bit in terms of top-line growth, but that's going to further yield, okay, better and stronger bottom-line cash flows.

Shmuel Jonas: Yeah. I mean, the one thing I would say is I think Marcelo might be being a little bit conservative on his projection, but again, as I said in the beginning, it's really a question of whether or not you want to have expanded GMPT or a longer lifetime value of every customer. We try to balance that both having good profitability as well as many happy customers that stay with us for a very long time.

Marcelo Fischer: Right. And to that extent, now something when we think about a sister business in many ways like our mobile top-up business, our MTU business, which is part of our -- which is our largest revenue business of the corporation in our Traditional segment, also with that, you're going to start seeing some very nice growth on the top-line. We have made some pricing changes to the portfolio and that's really going to help contribute in terms of the overall decline in Traditional Communications to be a lot less than what you have seen in the past year.

Greg McKinley: Great. Thank you. And this is my first time dialing in for this call, so I'm not sure historically what topics you guys are willing to comment on from a forward outlook standpoint, but you just mentioned the decline in the Traditional business, and you think maybe that the client rate of decline will moderate. I'm wondering, could you comment a little bit on that, and then set how much of an improvement in the rate of decline. And then, it also looked like the high-growth businesses more than offset the decline in the mature business. So, can you talk a little bit about what that means in your view for revenue growth, if you expect that in 2025, and EBITDA, if you do provide forward commentary on that, I'm not sure? Thank you.

Marcelo Fischer: Sure. Let me take one thing at a time. Okay, let's start with Traditional segment and then look at the consolidated picture. So, as it's not a new story, in our Traditional segment, a lot of the -- most of the businesses there is our legacy long distance voice businesses. Those businesses have been in decline for now many years. We expect the revenues in both BOSS Revolution calling business and wholesale carrier to continue that rate of top-line decline to be double digits. Now, we are managing those businesses for maximum efficiency, strong cash flow generation. We do not allocate significant capital towards those businesses. And you saw in fiscal 2024, those businesses -- the Traditional segment declined its EBITDA by about $11 million. Now, thinking about for this full year 2025, both as a result of the large cost-cutting exercises that we did during 2024, they were quite painful, but we executed on them. And as I had mentioned in prior calls, we are going to start seeing the impact of that -- of those cuts in Q4 and beyond. So, as a result of that, as well as what I mentioned earlier, as a result of the fact that the mobile top-up business, the IDT Digital Payments business, which is part of that segment, which is now in a faster-growth mode, both in terms of volume as well as due to very strategic pricing changes, the conventional cost cutting and debt will probably make the decline in Traditional EBITDA for this coming year to be a lot less than $11 million, maybe around $5 million, $6 million for this coming year. So, like, it probably be estimated about [$16 million] (ph) of EBITDA coming from the Traditional businesses. And that [relate] (ph) to the combined picture, right? I believe that fiscal 2025, we'll probably see a slight increase in consolidated revenue, now, as the new businesses, as the growth businesses start generating more revenue than the decline in the Traditional side. But more important than that, when you look at the bottom-line, one of the things that we have been very focused now for many years is to be able to demonstrate that we are able to increase bottom-line consolidated EBITDA every year despite of the fact that our core businesses' EBITDA have been coming down and been coming down strong. I think now it's about five or six years that we have grown EBITDA on a consolidated basis. We finished 2024 with a record $90 million in EBITDA. Our Q4 that we just announced today EBITDA of $25 million, that's -- I've been with the company for about more than 20 years. This is our highest EBITDA ever in IDT's history. And looking to 2025, with all the business now being EBITDA positive, we believe it could definitely surpass $100 million in EBITDA for 2025 as a soft guidance.

Greg McKinley: Yeah. Great. Thank you.

Operator: [Operator Instructions] Okay. We have a couple of questions in queue. The first coming from [Will Carter] (ph), private investor. Please proceed.

Unidentified Analyst: Yes. On BOSS Money, obviously, really strong growth again this quarter and continues really strong year. Where are you guys seeing a lot of this growth from? Are you taking share from competitors? Is this a growth pocket within the market? Interesting to just understand where that's coming from within the larger kind of competitive space.

Shmuel Jonas: I mean, the truth is I don't really know. I mean, we do survey these customers to find out who they've previously used for money transfer. And definitely, most of them have used others. So, I guess in some -- to some degree we're taking that business away from competitors. I think that we do a very good job cross-selling our customer amongst all of our different services and making sure that they're happy so that when they're sitting around talking they tell their friends about it. And that drives them to us as opposed to some of our competitors who spend wildly on customer acquisition, we really tried to sort of have -- became, I'll say about it, and really not overspend. We're very focused on making sure that -- as I said, that we drive profitable customer relationships, long-term customer relationships. And we just make sure that things work for our customers and that our pricing is as good if not better than all of the competitors that we track against. And that's really the simple answer.

Marcelo Fischer: Yeah. I believe that the BOSS Money brand is becoming a stronger presence in the customers that we're trying to attract for this service. Like, until recently, we used to get comments that, oh, you guys at IDT, you do BOSS Revolution calling, and oh, we didn't know that you guys also offer a money transfer business called BOSS Money. More recently, it's the other way around. We hear some customers saying, oh, you guys do BOSS Money money transfer. I didn't know that you guys do international long distance calling, right. So, BOSS is becoming a more -- a stronger brand in the marketplace right now.

Unidentified Analyst: Yeah. Are there certain payment corridors where you guys feel you have outsized share, or is it sort of across the different corridors between the US and other countries?

Shmuel Jonas: Well, I mean, again, we today are almost 100% US outbound. I mean, we do it from Canada as well, but it's a small percentage. And I would say that again we have some countries that we have a high share of transactions to and our goal is to try to make every country a country that we have a high share transaction. So, obviously, you get to a certain scale and it becomes more, I'll say, self-fulfilling. You have a big enough share and customers start telling each other about it and we definitely have reached that in one or two of the markets, but hopefully, we'll get to a couple more this year.

Marcelo Fischer: Yeah. I mean part of the irony is that most money transfer operations made in the US, for them, the largest corridor obviously is Mexico. And for us, at IDT, actually, Mexico is not yet a very large corridor, it's not one of the top three corridors. We are growing our presence in Mexico. So, we actually view Mexico as an opportunity at this point now to try to get even more market share from some of our competitors.

Unidentified Analyst: Got it. That's really helpful. And then my last question is on NRS. Another amazing year. Congratulations, guys. It would be helpful just kind of maybe similar to the overview that Marcelo gave on what you're thinking about 2025. Any goals around terminal deployments, kind of revenue targets and then maybe SG&A levels that will be required to get there?

Marcelo Fischer: Yeah, I mean, NRS continues to be very robust. We expect and we have budgeted to continue to grow the network, the POS network by roughly about 500 POS a month, right, 6,000 POS a year, which is what has been the trend for the past few years on a net basis. That's objective going forward. That's going to be driven by the growth in merchant services, by selling more NRS Pay accounts together with our POS service, continue to increase the operating leverage of the business. I think right now, we're doing about 24% net margins, probably, growth will be 25% net margins this coming year. It's always a balancing act of how much you want to be increasing that margin and the top-line, bottom-line growth. So, I think we have gotten a good balanced level of investment and growth at the same time. So, I will not be surprised if EBITDA for NRS grows another 30% this coming year on top of the record $25 million that we delivered for this year.

Shmuel Jonas: Yeah. I mean, the only thing I would add to that is, I mean that -- we have some products that we only recently launched that we really don't know yet like I'll say how they are going to impact our numbers long term. I mean, I can tell you just on -- we've launched kiosks in our stores for doing self-ordering and we're sold out of them. I mean, hopefully, we'll have more of them in the next month or so. But I mean, so there are a lot of pockets of growth that I think will continue to make volume in every -- for what we do in every store be greater than what it is today. I mean, the interesting thing to me about kiosks is that it actually increases the amount of merchant services that are done in the store quite significantly. I mean, when people are going to account or in paying, they're much more likely to pull out cash from their wallet versus paying at a kiosk. And we launched our Panther POS, which is our tablet-based POS system, a couple months ago, and it's going very, very well. And we're about to launch it in a couple of new form factors as well as we're now developing it for iOS as well. And we expect to launch Pay-on-the-Tablet as well probably by the end of the fiscal year. So, there's a lot of demand and that will also be -- able to be self-signup from our website. You can go on fill out a form, either that or download from the App Store and fill out form that comes in the app and start doing transactions. And it's also been a very good product for our existing retailers to help them move the queue faster especially on days when they're busier and they need an extra register. They just pull out a tablet and start moving the line. So, yeah, those are some of the new things that are happening.

Operator: Okay. Our next question comes from [Max Martinuk] (ph), private investor. Max, please proceed.

Unidentified Analyst: Hi, guys. First of all, just congratulations on the quarter. My question is relating to the remarks you guys said, quote -- on the NRS, "deploying hundreds of screens in new locations outside of our independent retail market." And I think you actually just covered a little bit in the previous question, mentioning that the kiosk and the Panther tablets for the screens. Do you guys -- is it all POS-related screens, or are you guys looking to kind of, like, offer screens where it's just pure digital out-of-home advertising? And the second part of the question is just on the new locations. Like, what verticals are you guys looking at? Do you still see, like, a lot of [brands within] (ph) your core market? Are you guys looking to really expand into new verticals now? Thank you.

Shmuel Jonas: Okay. So, bunch of questions there, so I'll try to remember all of them when I give you an answer. As far as the new locations for screens we're doing, right now, hotel lobbies is actually a big push for screens. We just -- I mean, we placed a couple of hundred over the -- this past quarter. We just ordered 1,000 more for -- today for that vertical alone. And, as far as new verticals, again, we're definitely trying to go to things that are adjacent to us whether or not that's hardware stores or quick-service restaurants, anything that's SKU-based is really still our main focus. Liquor stores is definitely a big focus. We just hired someone to run, I'll call it, our liquor store division to really make sure that it's completely customized for everything that they need. We continue going after gas stations. We continue testing the waters in some other verticals. But again QSR is probably our biggest vertical that is adjacent to where we are now and that's -- as I said, unfortunately, we're sold out of our kiosks right now, but we'll be getting more shortly.

Operator: Okay. We have a follow-up coming from Inigo Alonzo with Moram Capital. Please proceed.

Unidentified Analyst: Hey, again. I wanted to ask about BOSS Money. It looks like you have a way of stronger presence in the Northeast with more retailers. I was wondering what's the strategy to grow nationwide, and if you have considered tracking in the public information that you released the number of retail locations that you have over the country and maybe the areas just like you do in NRS. Thank you.

Shmuel Jonas: Okay. I don't know if we released that information or not. I mean, I don't consider it to be a state secret, but we're slightly under 2,000 retailers that we do retail money transfer at. Again, similar to the comments that I made about lifetime customer value and GMPT, we're not focused on the number of locations that we have, but we're focused on making sure that the locations that we have are profitable and are doing a lot of transactions. That's really our goal. We don't want retailers that do a handful of transactions. They cost us more to have than they're worth the effort in having. So, we do open and close a lot of locations for that reason. However, what I would say is that we are definitely focused on growing our retailer base, but the majority of the growth that you're seeing is really in the digital verticals and that continues to be our main focus and that continues to be where we're having a solid profitability from.

Unidentified Analyst: That's it.

Operator: 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.