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Edited Transcript of IDT earnings conference call or presentation 5-Jun-19 9:30pm GMT

Q3 2019 IDT Corp Earnings Call

NEWARK Jun 18, 2019 (Thomson StreetEvents) -- Edited Transcript of IDT Corp earnings conference call or presentation Wednesday, June 5, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Samuel Jonas

IDT Corporation - CEO

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Presentation

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Operator [1]

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Good day, everyone, and welcome to the IDT Corporation's Third Quarter Fiscal Year 2019 Earnings Call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the 3-month period ended April 30, 2019. (Operator Instructions) After the prepared remarks, Marcelo Fischer, IDT's Chief Financial Officer, will join Mr. Jonas for Q&A. (Operator Instructions)

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 could cause actual results to differ materially from those that 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 that will follow, IDT's management may make reference to non-GAAP measures, including adjusted EBITDA, non-GAAP net income and non-GAAP EPS. A schedule provided in the IDT earnings release reconciles adjusted EBITDA, non-GAAP net income and non-GAAP EPS 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, and that's www.idt.net. Their earnings release has also been filed on Form 8-K with the SEC.

And with that, I would now like to turn the conference over to Mr. Jonas. Please go ahead.

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Samuel Jonas, IDT Corporation - CEO [2]

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Thank you, operator. Welcome to IDT's Third Quarter Fiscal Year 2019 Earnings Call covering results for the 3-month period ended April 30, 2019. For a more detailed report on our results, please read our earnings release filed earlier today and our Form 10-Q which we will file with the SEC. IDT's third quarter results were consistent with recent trends. While our revenue was down substantially, we were able to maintain gross profit while continuing to invest in our growth initiatives.

The increased revenue less direct cost of revenue in the third quarter compared to the third quarter of fiscal 2018 have generated year-over-year increases in revenue less direct cost of revenue for 6 in the last 7 quarters. We've been rapidly reallocating resources from our core offerings. This approach has allowed us to maintain consolidated SG&A in a tight range between $49.5 million and $51 million for each of the past 5 quarters. We were able to increase adjusted EBITDA 10% year-over-year to $8.9 million in the third quarter and increased income from operations to $2.7 million from a loss from operations of $1.7 million in the year ago quarter.

Our growth initiatives continued to perform well. net2phone's unified communications business generated $6.7 million in revenue this quarter compared to $3.7 million a year ago. The net2phone's team has done a great job. As of April 30, net2phone serves 89,000 seats. National Retail Solutions revenue increased 32% year-over-year to $1.5 million. And our POS network now serves over 7,000 independent retailers around the country.

BOSS Revolution money transfer revenue increased 34% year-over-year to $6.1 million. The growth was generated entirely by direct-to-consumer transactions originated from downloads from our app. D2C revenue increased 98% year-over-year and now contributes about 2/3 of our money transfer revenue. Between D2C transactions initiated by BOSS Revolution retailers, we're now executing well over 300,000 transactions a month. Our MVNO continued to improve its message as we emphasize online acquisition.

IDT and Tigo Honduras reached an agreement which is patterned after our successful deal with Tigo Guatemala to [increase minutes and voice traffic] along the U.S.-Honduras corridor while providing customers with more options for international long distance calling. The U.S.-Honduras corridor is not as heavily trafficked as the U.S.-Guatemala's corridor but substantial nonetheless.

Overall, we're heading to the fourth quarter with strong position. We still face challenges on multiple fronts, but our team deserves great credit for the considerable progress we have made diversifying our sources of revenue and margin. Thank you very much. That concludes my remarks.

Now Marcelo and I would be happy to take your questions.

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Operator [3]

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(Operator Instructions) Okay. And there look to be no questions at this time, so this will conclude our question-and-answer session as well as today's conference call. Just want to thank you all for attending today's presentation, and you may now disconnect your lines.