IDT (IDT) Q3 2024 earnings summary

Executive summary

• High-growth, high-margin segments—NRS, net2phone, and Fintech—drove a 310 basis point improvement in consolidated gross margin and record gross profit for Q3 2024, with consolidated revenue at $299.6 million, nearly flat year-over-year.

• NRS surpassed 30,000 active POS terminals, becoming the largest POS network for C-stores in the U.S., with recurring revenue up 45% year-over-year.

• Fintech (BOSS Money) achieved positive Adjusted EBITDA for the first time, with revenue up 42% and transactions up 44% year-over-year.

• net2phone subscription revenue grew 17% year-over-year, with seats served up 13% and Adjusted EBITDA more than doubling.

• Net income attributable to IDT declined to $5.6 million from $6.9 million, mainly due to a higher effective tax rate and foreign currency losses.

Financial highlights

• Gross profit for Q3 2024 increased 11% year-over-year to $97.0 million, with gross margin rising to 32.4% from 29.3%.

• NRS recurring revenue reached $89 million TTM, with Adjusted EBITDA margin expanding to 21% TTM.

• net2phone Adjusted EBITDA margin was 12% in Q3 2024, with subscription revenue up 17%.

• BOSS Money revenue rose 42% year-over-year, with transactions up 44%.

• Cash, cash equivalents, debt securities, and current equity investments totaled $174 million at quarter end; no outstanding debt.

Outlook and guidance

• Management expects continued sustainable, profitable growth from NRS, net2phone, and BOSS Money.

• Cost-cutting initiatives in traditional communications are expected to show greater impact in Q4 and beyond.

• Anticipated capital expenditures for the next twelve months are $17.5 million–$20 million.

• New product and pricing plans, including AI-powered features, to drive further ARPU and seat growth in net2phone.