Good evening. Welcome to the IDT Corporation's Fourth Quarter and Full Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please note, this conference call is being recorded. I will now turn the call over to Bill Ulrey of IDT Investor Relations. Bill, you may begin.

Thank you, John. In today's presentation, IDT's Chief Executive Officer, Shmuel Jonas; and Chief Financial Officer, Marcelo Fischer, will discuss IDT's financial and operational results for the 3- and 12-month periods ended July 31, 2025. After their remarks, they will be happy to take your questions. Any forward-looking statements made during this conference call, either in their remarks or during the Q&A that follows, 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, non-GAAP earnings per share, NRS's Rule of 40 score and adjusted net cash provided by operating activities. Schedules provided in the IDT earnings release reconcile these non-GAAP measures to their 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. Now I'll turn the call over to Shmuel for his comments on the quarter's results.

Thank you, Bill. IDT's fourth quarter capped off a strong fiscal year, highlighted by full year double-digit adjusted EBITDA expansion at each of our operating segments, combining to drive a 43% increase in consolidated adjusted EBITDA to a record $129 million. At NRS, merchant services and SaaS fee revenue drove the top line growth, while NRS operating leverage continued to contribute to net margin expansion. In fiscal 2026, we expect that merchant services and SaaS fee revenue will again drive significant increases in revenue per terminal and adjusted EBITDA. Also at NRS, we continue to work on several early-stage initiatives that, true to our mission, will help our retailers to prosper. In fiscal 2025, we began to integrate select retailers with DoorDash. Our retailers are thrilled by the new orders DoorDash is bringing to them. Building on this success, we are preparing to begin integrations with another large delivery service. NRS's data business, NRS Insights just signed a deal with one of the largest coupon providers in the country. Once this deal is launched in calendar year 2026, our retailers will be able to offer digital coupons to their customers, helping their customers to save money while opening a new channel for our brand partners to engage with customers. BOSS Money's fourth quarter and full year results reflected strong digital channel expansion, which is now contributing over 80% of our remittance volume. The industry-wide customer-led migration from retail to digital provides us a large opportunity. In the year ahead, we expect to continue to build market share by increasing our marketing and cross-marketing efforts within the larger BOSS ecosystem, while also expanding our reach through our integration with WhatsApp and deployment of a cross-border digital wallet. In our digital channel, the amount of cash our customers sent increased by 41%…

Thank you, Shmuel. As always, my remarks on our fourth quarter and full fiscal year '25 results will focus on the year-over-year comparisons to set aside seasonal impacts on our business. Our fourth quarter extended the strong year-over-year growth trajectory that we have followed throughout the fiscal year. Full year adjusted EBITDA totaled $128.7 million, surpassing our updated $126 million guidance. IDT increased consolidated revenue in Q4 by 3% as our three high-margin growth segments, namely NRS, Fintech and net2phone, continue to expand their top lines. Collectively, these fast-growing segments contributed 31% of total revenue in the fourth quarter compared to 27% a year earlier. IDT's fiscal 2025 revenue increased 2%, and that's the first full year increase since 2021 and represent a significant inflection point, signaling the start of what we expect will become a long-term trend of sustained revenue growth as the increasing revenue from our growth businesses more than offset the continued declines in revenue from our two ILD voice businesses. Each of our four reporting segments, including Traditional Communications, increased their gross profit contribution for both the fourth quarter and full year with our consolidated gross margins increasing 310 and 380 basis points, respectively. These increases reflect the continued expansion of our high-margin segments and in the Traditional Communications segment, the increased contribution from our digital payments and IDT Global wholesale carrier businesses. Consolidated income from operations increased 9% to $21.9 million in the fourth quarter, and increased 55% to $100.4 million for the full year. Adjusted EBITDA increased 33% to $33.4 million in Q4, and increased 43% to $128.7 million for the full year. These increases were driven by the operational leverage of our three high-margin growth segments, which together generated over 50% of our consolidated adjusted EBITDA for the first time, and in the…

[Operator Instructions] First question comes from [ Inigo Alonso ] with [indiscernible] Capital.

I have three, four questions, and I'll start with the money remittance business. The whole industry has been subjected to a lot of volatility. You have addressed the tax that is going to be starting next year. I was wondering what's the progress with the stablecoins and the Visa-linked wallets that you mentioned last call, since that has been one of the topics creating that volatility.

Yes. As far as the wallets, we've actually already launched our wallet to some customers. I'll call it, it's in a beta phase right now. I think that over time, most transactions are going to happen using stablecoins. And I think a large portion of transactions that aren't spent right away will end up being stored in wallets using stablecoins, both because of volatility in currency, markets in certain countries as well as because of the cost and ease of moving funds in that manner. As far as how it's impacted us to date, I can't yet say that it's impacted us in any material way. But I think that it's definitely going to be a bigger part of our future and the money transfer business in general.

Another one on this topic that I forgot to ask, what's the WhatsApp launch date?

The WhatsApp launch, is that what you asked? It's also launching in the next couple of days. It's starting with only existing customers, and we expect to launch it to new customers, I would say, probably within 30 to 45 days after.

Okay. And then the stablecoins, are you going to allow for those in your app in the future?

Yes, 100%.

Okay. Then switching slightly the subject, you have mentioned quite a bit a failed acquisition in the past. You also mentioned being very excited about the prospects that some of your competitors were offering and maybe the opportunity to acquire them. We have the acquisition of Intermex by Western Union this quarter. Both of them together is going to be nearly 50% of the money sent to Mexico in the retail space. Do you think there's going to be regulatory concerns, and this acquisition could be halted?

I can't comment on that. I'm not a regulatory expert. So I don't know. I would suggest, if you have a question like that to ask your attorney.

Okay. I'll ask another one on the subject. And have the M&A prospects for IDT have changed after what has happened this quarter? Or do you see still very attractive valuations in the market?

I mean it's a complicated question to answer. I think that there are always new opportunities that come around. I don't think that the market for money transfer companies has improved over this past quarter in terms of where they trade as a general group. I think there definitely seems to be a large premium being willing to be paid for certain acquisitions. So I think it's a nuanced question that I don't exactly have an answer to.

Okay. Organically, what are the main investments that you're going to make as IDT to grow your businesses this year? Those three, four, five items that are top of mind for you?

Yes. I mean that's a very broad question, and we don't like to give too much guidance to competitors on how we are going to acquire customers better and cheaper than they do. So I will say that we will continue to spend wisely and creatively, to acquire customers at the lowest possible cost and with the highest benefit. And we're using all sorts of techniques to do those.

Okay. And the last question, you mentioned something of -- in net2phone of changing from a seat model to a usage model. Is that going to be for UCaaS? Or is that going to be for the AI agent?

I was more referring to the AI agents in general. I mean in terms of our UCaaS and CCaaS offerings, those will still be generally sold by the seat. And I was really referring to both our Coach service as well as our agentic services that we're offering.

Our next question comes from William Vaughan with Corient.

Congrats on the good quarter. My first question is about NRS. In the prepared remarks, in the release, you mentioned a little increase in the rate of churn or the churn rate in terminals. Do you have an idea of what's causing this churn? And is it folks just switching to other providers, perhaps getting more competitive? Like any color you could give on the churn and other reasons behind it would be helpful.

Yes. I mean, I would say that there are a couple of factors. Some of them are larger than other factors. I would say one thing is in certain small areas, like there has really been a big uptick in immigration enforcement and it's actually affected retailers in those areas to the point that they're closing. And those aren't really being lost to anybody else. Those stores are being lost because they're out of business. I would say, definitely, because we've had success in the market, more competitors have come out of the woodwork and have tried to often pretend that they can replicate our pricing and feature set. Most of the time, they deliver far less in savings and functionality to retailers than what they claim, but they do have strong sales teams in some instances that has led to churn. I mean we do our best to win those types of customers back because most of the time, they're very dissatisfied after a short period of time. I would say two other maybe more recent issues that we've had is one is with some of the card schemes being maybe, I'll say, a little bit trigger-happy on our merchants in terms of claiming that they're noncompliant with certain of the scheme's rules. And even though they're not fines that are levied by us, they do influence our retailers to think that it's us. And it's -- I mean, it's really an unfair thing to us, but it has hurt, I would say, churn. And then we also had some technical issues with some of the equipment that we were purchasing, and how it was interacting with our -- some of our service providers. We seem to have gotten it, I would say, 95%, 99%, something in that neighborhood, like under control over the past couple of weeks, but it definitely did lead to some spike in churn because essentially, like it was -- I mean, it's hard to go into really the technical reasons of why it was happening. But it was leading to some inaccurate like reporting and retailers sort of believing that the amount of money that they were expecting the next day was different than what they were actually receiving. Again, as I said, it's mostly solved, but it did lead to a little bit of extra churn.

Just a little follow-up on one of those points. You mentioned new competitors. Would you say those new competitors are start-ups or legacy businesses, legacy players seeing the success you have, and creating a product to try to compete?

Yes. I'd say it's a little bit of both. I mean, again, you're seeing the Clovers of the world pretending to be really good for convenience stores, which they're not. And you're also seeing some upstart companies that are, as I said, putting on a good, I'll call it, UI without really having much substance behind it, as I said, to try to convince retailers that they can do the same thing as we can, even though, as I said, that's usually not the case, and we can usually win those stores back.

Awesome. Just another question. This would be on the BOSS Money business. So you guys have been growing really nicely in the past few quarters, 30%. And a lot of other players in the digital remittance space have been growing well also like taking share from the retail or the physical channel. Do you think that you guys can continue this strong growth? I mean that's a pretty strong growth rate. Is this something that you think can be sustained for a longer period of time? Or you think just naturally over time, it will sort of settle in of something a little bit more mature? I guess what are your thoughts on just the overall growth rate of the digital channel, whether that's sustainable or not?

I would say a couple of things on it. I mean, I would say that, listen, there's no question that immigration policy in general in this country has shifted materially over the past couple of months. And that is definitely not a good thing for the remittance business, whether or not you're a digital remittance player or a retail player. You have effectively less customers choosing to live and work in our great country. And I think that there is definitely, I would say, a much more -- I don't know the right word, but maybe I won't even explain this one because I don't know how to explain it. But I mean, I think the other thing I would say is that I definitely think that it is becoming a more mature business. And probably because of that, it will grow less than it has traditionally. That being said, there are definitely factors that I think are going to help the digital business in the short term. And there's initiatives that we're doing, whether or not it's in wallets or WhatsApp or other things that we didn't talk about today, that are also going to enhance the growth of our business. And I think that all those things together, like I would say, I would probably -- if I were betting man, say that growth will slow a little bit, but not in a very big way. But again, I think there are things that we don't know yet, what those effects will be. I think when this tax comes into place, that's going to bring a lot of people that were going into stores, looking for a good alternative to send online. And while I don't think we're the only good alternative, I think we are definitely one of the best alternatives for customers to use. And I think that we will probably get more than our fair share of customers that are looking for a new solution, I'll say it, to save money on the tax. That being said, the tax is not as great as it once was planned to be. So it might not have as much of an effect as it could have had, had the tax come out higher than where it ended up coming out.

And Will, as you -- because of all the things that Shmuel said and the broader uncertainty around immigration, et cetera. So when we did the budget for this year, we -- as I mentioned in my prepared remarks, we budgeted that revenue would grow in the [ high teens ] for this year, okay? So time will tell as the months go by as to whether that is a good forecast or not. But from what we know at this point, it's a pretty good baseline for modeling growth.

Yes. I'm usually slightly more pessimistic than Marcelo. But I mean, in this particular case, I'm slightly more optimistic than Marcelo. But we shall see in the results.

Awesome. Last question. You mentioned looking at a potentially larger acquisition in the past quarter, where you'd use up a lot of the cash and possibly borrow. With that acquisition opportunity passing just because you're being thoughtful and disciplined on price, which I appreciate, do you -- are you focusing more on -- or where would you lean more towards? Smaller acquisitions which you can grow once integrated with more resources behind it, or more larger acquisitions, like the one that you were just looking at? Like where would you say you're leaning more towards in terms of opportunities in the market?

I don't know if I would tell you which one I'm leaning more to. I mean, I would say that there's less large acquisitions come around that are -- that would meet our qualifications to do them than smaller ones. So if I were going to guess, I would tend to say that we will go for smaller acquisitions rather than larger ones. That being said, I think that we have a great team at IDT. And because of, I'll say, our prudence, we've sort of decided to double down on building more things internally and acquiring more customers organically rather than looking to do so through acquisitions. So in the short term, I would expect more of an investment to be made in our own efforts, which traditionally have served us, I would say, probably better than most of the acquisitions, although there are some acquisitions that we've done that have been very good.

[Operator Instructions] As there are no more questions, this concludes our question-and-answer session and the conference call. Thank you for attending today's presentation. You may now disconnect.