Good evening. And welcome to the IDT Corporation’s Fourth Quarter and Full Fiscal Year 2021 Earnings Call. In today’s presentation, IDT’s management will discuss IDT’s financial and operational results for the three-month and 12-month periods ended July 31, 2021. During remarks by IDT’s Chief Executive Officer, Samuel Jonas, all participants will be in listen-only mode. [Operator Instructions] After the prepared remarks, Marcelo Fischer, IDT’s Chief Financial Officer will join Mr. Jonas for Q&A. 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 to either 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 the non-GAAP measures, including adjusted EBITDA, adjusted EBITDA less CapEx, non-GAAP net income and non-GAAP earnings per share. A schedule provided in IDT’s earnings release reconciles adjusted EBITDA, adjusted EBITDA less CapEx, 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 a Form 8-K with the SEC. I will now turn the conference over to Mr. Jonas.

Thank you, Operator. Welcome to IDT’s fourth quarter and full fiscal year 2021 earnings call, covering results for the three and 12 months ended July 31, 2021. I’m joined today on the call by Marcelo Fischer, IDT’s Chief Financial Officer, and we’ll both be available to answer questions after my remarks. My discussion today is focused on the fourth quarter fiscal 2021 results. For more detailed report and discussion on our financial and operational results for both Q4 and the full fiscal year 2021, please read our earnings release filed earlier today and our Form 10-K. We expect to file the 10-K with the SEC on or about October 14th. We continue to drive strong improvement in IDT’s results during the fourth quarter powered by growth in net2phone, NRS and our Mobile Top-Up business. Let’s focus first on net2phone. net2phone subscription revenue growth accelerated in the fourth quarter, increasing 46% year-over-year, growth in our Latin America and U.S. and Canadian markets was again very strong. Our subscription revenue margin remained robust, increasing 10 basis points to 83.5%. net2phone strategic focus on midsize businesses, our multi-channel go-to-market strategies and deeply localized in-country offerings consistently generate gross margins and revenue growth metrics above UCaaS industry averages. But really the exceptional results in net2phone are the collective efforts of the focus customer centric group of people around the globe that is net2phone. Customers in net2phone don’t hear no very often. If they want or need something to help them better communicate, we find a solution for them. net2phone is becoming a big company but we are not becoming the kind of big company that has different departments for large enterprises and a different department for small companies. And we don’t have SLAs that differ depending on what you pay us. At net2phone, no…

[Operator Instructions] Okay. The first question is coming from Connor Haley from Alta Fox Cap. Your line is live.

Hi, guys. Congrats on the great quarter. Just one quick one from me. Your international Mobile Top-Up business had another quarter of very impressive growth. We noticed that a private equity firm recently bought a majority stake in a Mobile Top-Up business called Ding valuing it at $300 million according to press reports. Can you maybe explain to investors how your international Mobile Top-Up business compares to Ding? How you think about the growth opportunity for your IMTU business going forward? Thanks.

Hey, Connor. Thank you for joining our call today. You are right. No, we also read about a month ago that Ding received a valuation of about $300 million on concessions that they did, I mean, Ding is a private company, Irish company. So we don’t know any of the details in terms of the transaction. But we do welcome seeing the valuation that they got, given that we consider them to be pretty good comparable to our business. Like business wise, both Ding and ourselves compete in the same space. We really believe that we’ve measured up to Ding quite well both in terms of size and performance, while we are very strong in the U.S., in our own Mobile Top-Up offerings and not too strong outside of the U.S. Ding is the opposite, they have no, they have very small presence in the U.S. They are very strong outside of the U.S. Their [sales] (ph) presence just online. We at IDT have a very robust presence both online and in the retail channels in the U.S. While our Mobile Top-Up is part of a broader BOSS Revolution suite of products and I think they are probably a little larger than us on the wholesale B2B channel. But that had been a channel that we have grown quite substantially in the last six months and we are very focused in growing that channel as well. So that’s kind of how we compare a little bit ourselves to Ding. In terms of, where our Mobile Top-Up business is heading I mean, we are doing now north of $500 million in sales for Mobile Top-Up, but we really believe there is still significant growth opportunities for us in growing that business. Like, for example, if you think about from a markets…

I mean, I think, Marcelo said enough, I don’t really need to add much to what he already said. But I guess, I mean, the only bad part I can see is it’s always better when your competitors have less money than when they have more money. But on -- I think Marcel hit on this, but I think that really what differentiates us more than anything is, is we really are the only company of our kind that really competes in every vertical of Mobile Top-Up, both from being a wholesaler to being a retailer to being direct-to-consumer. And I think that that’s really another feature that makes us unique is we’re not a one trick pony, we’re -- wherever you need it, we are, and again, there’s more to come, we’ll expand on that in further quarters.

Yeah. I would just add one more thing, Connor, and as you know, we have been in the telecom space now almost three decades, and because of that, we have been able to establish very strong robust direct connections with most of the leading mobile operators globally. And therefore today, about more than 90% of our sales volumes in Mobile Top-Up comes from those direct connection, those direct deals we have been done. We use very little in terms of aggregators in this space and that I believe definitely gives us a significant edge in our cost structure and margin for this business.

Thanks, guys.

Okay. The next question is coming from Hassan [El Sawi] (ph) from EH Research. Your line is live.

Hey, guys. Just a quick question on the BOSS Revolution Money Transfer business, how do you think about conflict transfer wise RTGS, who all are talking about, like, kind of losing their bets off their take rates, international money transfer fees going to zero percent? What -- are you seeing some of that in BOSS Revolution and if so, are you kind of just running that as a loss leader for the Mobile Top-Up or how do you think that’s impacting like BOSS Revolution on a bigger scale outside of just Money Transfer?

I mean, I definitely don’t see the headwinds that you’re referring to or I mean, I haven’t, to be honest, heard them remark that. I will say that, I mean, I think that over time, the way people make money on Money Transfer will change. I think that more of it is going to be made on the spend of the money that’s sent rather than the fee that’s paid or the FX margin that’s made, like you have today. And we intend on being in that space to make money in-country, I’ll call it, rather than just on the send side. And you’ll see our -- the beginnings of our foray into that with our own new banking products here, which we intend to also launch outside of the U.S., including some other things that I don’t really feel like I can talk about that much yet. But I don’t view it as a gateway to IMTU at all. I view it as business onto its own that’s going to be substantial. It happens to be that a lot of the same customers do also buy IMTU, I will agree with that.

Okay. Thanks. And maybe one more quick one, you -- a couple quarters ago, you guys mentioned working on a lot of businesses in the background. I guess, we kind of just heard a little bit about some of the neobanking, they’ve got going on. Are these mostly in that same kind of like end market banking, payments, telecom stuff that you guys are working on or can you maybe give some more color on some of the, maybe not specifically businesses, but just end markets in general that you’re working on the businesses that you’re working on in the background?

Yeah. I mean, again, I would say, the most of the things that we’re working on in the background are somewhat related to things we already do. Communications, payments, Fintech in general. So, again, I could go on and on, like for hours about it. But, yes, I mean, the very simple answer is most of them are related to payments and communications, both on the consumer side, as well as on the business side.

Awesome. Thanks, guys.

Okay. The next question is coming from Matthew [Indiscernible]. Your line is live.

Hey, guys. So my question is kind of pertaining to how IDT looks like a business that has a lot of exposure to various components or segments of the telecommunication space? How do you see these companies, like, segments growing given their lack of individual scale and ability to differentiate their product or service?

I don’t know. I mean, we can, I think, we continue to scale every one of our businesses. I’m not sure where that question comes from. But maybe you want to elaborate?

Sure. Obviously, you have kind of four main business segments. Obviously, I think, you’re not the largest competitor within those segments. How do you see your products specifically or services growing giving -- given that lack of scale?

Well, I mean, again, I like to believe like that, like, the real thing that makes IDT better than everyone else, in my opinion is grit. Like we are scrappy or we work hard or we fight harder than, I’m not going to say, every competitor that we have, we have some great competitors and lots of businesses and there’s some great products out there that are -- that aren’t our products. That being said, I think that, like, we really try harder, like we both for in the service that we give to our retailers, in the products we give to our consumers. We focus on the details. We really try to give all of our customers a great experience with us and I think that that’s what has helped us achieve continued growth in all of the different segments that we’re in. Yes, we’re not the biggest UCaaS player, but you try to get the biggest UCaaS player engineering department on the phone, when you have an issue and you’re nine person law office in Brazil, I can pretty much guarantee you, like you’re going to wait on the phone for about 9 hours and they’re going to hang up on you. And we serve as our customers day in, day out, like our tickets that get opened, get closed and that’s really what differentiates us is our customer focus.

Yeah. Exactly. Just add to that, right? In all the businesses that we have chosen, we have chosen to compete in very unique niche categories, looking for opportunities in each one of those segments. For example, in the case of NRS, we really dominating the bodega independent retailer market, we have a huge distribution into that space and we are becoming the primary provider of POS systems and leveraging everything we can out of that network. Similar in the case of net2phone, we have chosen to compete primarily in the small, medium-sized SMB business, with our multi-channel offering, choosing the right geographies where we see above average growth and opportunities, which is -- which differentiates us a lot with some of the larger number one number two player in each one of these categories. Our goal is not necessarily to be the one level two player, but to be the best player in the categories and niche markets that we choose. When you think about our international long distance voice businesses being listed carrier, I think that we are probably the best operator on the international long distance minutes business and no other company draws more economics and better economics out of the minute of use than we do.

Awesome. Second question here. You appear to have made several new hires in the sales space as of late, could you just kind of walk us through your thought process behind that and how you see that accelerating growth?

I mean, hiring more sales people, means you’re going to have more sales. I think that it’s really very simple. Like, if we’re getting good economics or good returns on investment, we invest more. It’s really that simple.

Awesome. Thank you.

[Operator Instructions] Your next question is coming from David Polansky from Immersion. David, your line is live.

Hey, guys. Thanks for taking my question. I want to talk about NRS. I mean I’m really impressed with that business, particularly the monthly average revenue per terminal expansion from 131 to 169 a month. I mean, that’s 29% in just one quarter. So I just have like a high level, can you talk about the drivers for continued growth in that number and can you -- do you think that you can continue that performance?

I mean, probably not indefinitely. But, yes, I mean, I do think that we can continue that performance. I mean, we’re -- the -- I mean, A, on the merchant processing side of the business we really, I mean, we don’t have anywhere near the penetration that we believe that we can get to. On the advertising side, I don’t believe we have even scratched the surface of where we can get to. On the data, the same, I mean, on -- again we just started lending money to stores this past quarter. Like it does business I mean, I know it’s crazy to talk about it like that this is like it’s completely nascent, but it’s really completely nascent. I mean we’re going to show remarkable growth from NRS that I think everyone will be very happy with. In terms of the amount we get per store, I mean, again, I think, as we do a better job of signing up stores for more services and more products when we acquire them at first, probably, over time the number will somewhat stabilize, but we believe there’s lots of areas that we can add revenue from, everything from selling them, curated list of products, we just started doing to managing their delivery services for them, which we’ll be rolling out over the next couple months. And each one of these services are things that our stores need to compete and that we can make money on it and we think we’re I mean yes we are driving a lot of incremental revenue for us, but we’re driving way more incremental revenue for them from the products and services that we’re bringing to them.

Yeah. And as a benefit to all investors, as you have noticed, this is the first earnings release that we have started to include a breakdown of the NRS different revenue streams, now the advertising of data, the factories, the merchant services and we hope that by having given that the ability to invest that you could see the potential for growth from both revenue streams and how they will help significantly to leverage our existing POS network

Yeah. That’s great. I mean, yeah, we all, I’m sure everyone really appreciates the disclosure. I mean, it’s highlighting what is going to be one day a super, super valuable asset. I guess if you could just highlight a little, one, this was my last question. Could you talk a little bit about the data opportunities, so the data that you’re selling? I feel like when I talk to other investors they don’t really understand just how lucrative that could be? So could you talk, I guess, at a high level just on the data opportunities specifically within NRS?

I mean at a very high level, and again, it’s been a year or two since I’ve had to, like, pitch it to a company on my own. I think, the people that are there do it really, really well. But I would say, if you’re Procter & Gamble, you really want to know what Unilever is doing in the same stores that you are. You want to know how the products that are in each of your categories is doing compared to them. You want to know if the companies that you hire to make sure that the products are on the shelves are actually putting those products on the shelves. You want to know how many are moving when you lower the price or when you offer incentives. I mean there’s literally 100 different data points on, I’m going to say, on any product category that’s important to consumer packaged goods company to figure out what their next move should be. And frankly, the independent convenience store market has been a complete black hole to them. They -- and we really are the first company that has ever coming in and been able to give them a real understanding of what’s happening in that market, the good, the bad and the ugly. I mean, it’s -- and we think that over time that data is only become significantly more valuable and as we grow our network and going to larger stores and larger chains, it becomes even more valuable. So it’s kind of a self fulfilling prophecy just based on the way the business has grown.

So you’re able to sell data to individuals CPG companies, not just a third-party data aggregators. So…

That’s…

… there’s a lot of potential customers…

That’s correct. I mean, there -- when you’re buying the data from a third-party aggregators, who today are, probably, our largest source of revenue, you’re getting much, much more wide spectrum, like a shotgun approach to the data, I’ll call it. As opposed to when you’re buying it tailor to you, you’re getting the data and exactly the way that you want in the report that you want to see, it’s just -- it’s a completely different product. I mean, one gives you general information, one gives you like the absolute most minute amount of information you would want to be like, how are the source in the southern half of the city doing versus the western half of the city versus or two zip codes right next to each other. I mean, you can really scrub it any way you want.

So this -- and you are operating, and basically, like you said, like a black box. So this is really valuable data that nobody else has aggregated. So this is intimate…

Super.

People want us, but…

100%, I mean, again, like, this is the type of data that a Walmart can offer a CPG, but again, it’s only, they sell stuff for a fixed price. So it doesn’t -- they don’t have the ability to see if you price it at $1 less or if you give an incentive $1 more or if you put it on promotion in this area and not in this area, what will happen, that kind of, there’s also some LC test and learn, that they’re able to do in our markets, that they’re not able to do even in bigger chains. I think that they’re using that to really drive their business in other areas, besides our own area.

That’s great. And I guess what I kind of meant by that was like, in terms of markets, like, the bodega communities, like nobody else has eyeballs in that market, is that -- that’s what I was asking?

I mean, I’m sure there’s somebody else that has some eyeballs in bodegas, but there is no one that has anywhere near the amount of data and the granularity and the systems to process it that we do.

Awesome. All right. Thanks, guys. I’ll hand it over.

Okay. We have a follow up from Hassan Ansari from EH Research. Hassan your line is live.

Hey, guys. Just wanted to hop back in line and follow up on something David asked about. You mentioned, when you’re deploying these NRS terminals, the stores are actually seeing their own revenues get a little bit of an uplift? Can you just, A, explain really like how that’s working, and then, B, if you have like any idea direction on what’s the magnitude of that revenue uplift for the stores that you’re deploying these terminals?

Again, on the magnitude, we don’t break it out. And frankly, speaking, like, it varies a lot from retailer-to-retailer. I mean, we have retailers that have seen 80% to 100% increases in their business after deploying our system. But we really give them the management tools to see how their business is doing to see what their gross profit is on items, what their out of stock levels are, which are the top 50 items in their area that they’re not carrying, et cetera, et cetera. And again, like any tool, the tool is only as good as the person who is using it. So, if you don’t -- you could have an iPhone and use it only to make phone calls and then you might love a flip phone. On the other hand, you can probably do everything from your iPhone that you can do from your desktop computer, which makes it like a really powerful tool. So I think that, it really obviously depends on the retailer, how much of a benefit they’re going to see from it. But almost all retailers are seeing a benefit from the both from the fact that our merchant processing is, very low fee, very simple and it makes people use their credit card more than they had been before and that in and of itself drives sales. The advertising in stores for products that they’re selling in those stores drive sales for those products. The -- again, the fact that we give them the data tools themselves to see how they’re doing on each of these categories lets them figure out what they should be doing in their business to drive sales. We tell them which are their busiest hours, so maybe they’re opening an hour earlier than they need to be or closing an hour earlier than they should because they’re close -- and those types of decisions really let them make more intelligent choices for their business.

Okay. So that makes a lot of -- that’s interesting. It’s like a little like business intelligence tool wrapped into a payment system. I’m not sure if I miss it in some of your filings. But could you like directionally walk us through the economics of like deploying a single terminal, just thinking about like, cost to deploy. I imagine, like, coming in at the topline, because you’ve got data, you’ve got the payments processing fees, a gets a little bit of messy, but if you just like directionally guide us and like how you guys think about, like, the per terminal return as you start to deploy these in more stores?

Well, I mean, I think, that we sort of got a similar question earlier with we broke up the ARPU per terminal this quarter. So, again, as I said, I believe that you are going to continue to see good improvement on that ARPU for a significant period of time. As I said, I don’t think, it expands at the same rate that we’ve been doing it forever, like, I wish I could do that, but I don’t think that’s reality. That being said, as I said, I think, the penetration in stores of all of our services is still very low. So you’re going to see massive improvement from just better penetration in general. And again, we are adding lots and lots of features, I mean, essentially, like, NRS to a degree, it’s one business, but it’s also many different businesses all in one, so the funding is one business all unto itself. The data is one business onto itself. The payments is one business onto itself. The software is one business onto itself. The delivery and e-commerce is a business onto itself. The core of that product is the POS and in -- the great user experience and the great service that we -- I’m price, frankly speaking, that we give our customers for this product. I mean, you can get a POS that probably does some of the things that we do. It’s just going to cost you probably 8 times to 10 times as much upfront, and probably, 20 times to 30 times as much on a monthly basis. I mean SAP and any major company sells fancier, I’ll say, equivalents, but for an independent store this is really an amazing deal besides everything else.

Awesome. And just one more quick one before I’ll maybe hop back in line again.

Okay.

So it sounds like you’re using the POS almost like a land and expand thing with your customers. How successful are you finding that, like, are many of the customers coming just for the terminal and then like over a few months a year, they’re starting to -- you’re starting to monetize them through some of the other services or it’s more like you have the ability to do that and it’s only now starting to catch on?

I mean, it’s both. I mean, I think that a, like, things always take time till they improve to a point where the ball really starts rolling quickly. By the same token, there’s also a lot of new products that we barely introduced already and you’re not going to see those in our results for a couple of quarters, but they’re going to be huge.

Okay. Awesome. Awesome. Thanks, guys.

Okay. We have a question coming from Jackel King [ph], Private Investor. Jackel, your line is live.

Hello. Hello.

Yeah. You’re here. We hear you. You hear us?

Yeah. Yeah. Yeah. I had a question about the monthly average revenue at the terminal. Could you talk more -- could you tell us the difference between the average revenue for NRS Pay and then the regular -- just a regular term and all?

We don’t break it up specifically. But I mean, again, the price that we charge for our terminal and the price we charge for our service, as well as our merchant processing is all very, very simple and easy to find. Go to nrsplus.com and the pricing is right there.

Okay. And then I have another question about just the penetration of NRS Pay, because it seems that you have 900 more terminals for this quarter and 900 new NRS Pay terminal. Was it mainly from NRS -- would you order new terminal from NRS Pay or was it like a mix of the two?

I’m not 100% sure I understand your question, but about two-thirds of the new terminals are taking NRS Pay.

Yeah. That was my question. Yeah. So it was mix. Okay. Okay. Thank you.

This concludes our question-and-answer session and conference call. Thank you for attending today’s presentation. You may now disconnect.