IDT Corp (IDT) Reports Mixed Q1 Fiscal Year 2024 Results Amidst Strong Growth in High-Margin ...
BOSS Money revenue surged 38% to $24.2 million, with remittance volume up 41%.
NRS recurring revenue increased by 25% to $22.4 million, while net2phone subscription revenue grew 19% to $18.5 million.
Despite growth in key segments, consolidated revenue decreased by 6% to $301 million, and net income attributable to IDT dropped 30% to $7.7 million.
On December 4, 2023, IDT Corp (NYSE:IDT) released its 8-K filing, detailing the financial outcomes for the first quarter of fiscal year 2024, which ended on October 31, 2023. The report presents a mixed financial picture, with significant growth in high-margin segments being offset by a decline in overall consolidated revenue.
Performance Highlights and Challenges
IDT's Fintech segment, particularly BOSS Money, showed robust growth with a 38% increase in revenue to $24.2 million, driven by a 41% increase in remittance volume. National Retail Solutions (NRS) also performed well, adding approximately 1,500 net active point-of-sale (POS) terminals, reaching around 27,200 terminals, and achieving a 25% increase in recurring revenue to $22.4 million. The cloud communications segment, net2phone, added approximately 12,000 net seats, reaching around 364,000, with subscription revenue climbing 19% to $18.5 million.
Despite these successes, IDT faced challenges as consolidated revenue decreased by 6% to $301 million from the previous year's $322 million. The consolidated gross profit, however, increased by 6% to a record $94 million, and the gross profit margin improved by 370 basis points to 31.4%. Income from operations saw a 15% decrease to $17.2 million, and net income attributable to IDT dropped significantly by 30% to $7.7 million. Adjusted EBITDA also decreased by 8% to $22.3 million.
Financial Achievements and Analysis
Despite the overall decline in revenue, IDT's high-growth, high-margin businessesBOSS Money, NRS, and net2phonecontributed to a record gross profit and an improved gross profit margin. The company's Traditional Communications segment, which still contributes the majority of consolidated revenue, performed as expected, with a decrease in its contribution to total revenue from 82.5% to 76.6% year-over-year.
CEO Shmuel Jonas highlighted the strong performance of the high-growth segments and noted the company's efforts in innovation and cost management.
Were working very hard to innovate exciting new offerings, features and functionalities and not just in our growth businesses... This effort will help preserve the cash generation of our paid-minute businesses despite their continued, expected topline declines in the quarters ahead."
Jonas also mentioned the company's share repurchase program, with 125,470 shares of Class B common stock bought back for $2.8 million during the quarter.
Financial Statements Highlights
The company's balance sheet remains strong with $159.7 million in cash, cash equivalents, debt securities, and current equity investments, and no outstanding debt. Net cash provided by operating activities decreased slightly to $14.8 million from $18.2 million in the previous year's quarter.
Overall, IDT Corp (NYSE:IDT) is navigating a period of transition, with growth in strategic high-margin areas balancing declines in traditional segments. The company's focus on innovation and cost management, along with its strong balance sheet, positions it well for future growth and profitability.
For more detailed information, investors and interested parties can access the full earnings report and listen to the earnings conference call via the IDT investor relations website.
Explore the complete 8-K earnings release (here) from IDT Corp for further details.
This article first appeared on GuruFocus.
