IDT : Annual Report - 2024

IDT

IDT Corporation

2024 Annual Report

Dear Fellow Stockholders:

IDT's record fiscal year 2024 results were driven by strong top and bottom-line performance from each of our three high- growth businesses - NRS, BOSS Money and net2phone. NRS generated record income from operations while BOSS Money and net2phone turned cash flow positive. Meanwhile, the larger, mature businesses in the Traditional Communications segment continued to generate strong cash-flows reflecting our ongoing efforts to streamline operations and optimize pricing.

We enter fiscal 2025 positioned for a productive year. We expect IDT to grow our consolidated revenue after over a decade of topline declines and to generate an unprecedented level of Adjusted EBITDA.

Underneath the hood, we are executing on our product development roadmap to further accelerate growth and profitability. Here are just a few of our priorities:

NRS has begun rolling out two new POS formats. A free-standing NRS kiosk enables customers to self-order and pay for food.

NRS's Android tablet POS expands our addressable market to small-format retailers where our fixed location, counter-top POS is not always a good fit - think small format vape and tobacco shops, beauty salons, and cafes. These are large markets that offer tremendous long-term growth potential. Now, we can begin to tailor offerings to these retailers on hardware suited to their needs.

BOSS Money continues to grow rapidly relative to the more established operators in the international money remittance space. In fiscal 2025, we expect to maintain topline momentum while boosting profit margins by further refining pricing methodologies and enhancing efficiency in every part of the unit's operations. We will also launch the BOSS Money digital wallet - enabling customers and recipients in the US and some key destinations to load, receive, store, and spend funds through their BOSS Money account.

At net2phone, we will drive ARPU growth and further expand our market to larger, mid-market enterprises with differentiated Unified Communications as a Service (UCaaS) offerings featuring a powerful AI assistant for call transcription, sentiment evaluation, and drafting follow up emails. Our Latin American customers will appreciate finding WhatsApp messaging available within our application. Also this year, we'll begin bridging our recently acquired Contact Center as a Service (CCaaS) platform, uContact, into our proprietary, core native application to enhance the user experience and speed further product development.

As we implement these and other development priorities during the year ahead, we expect to open new markets and accelerate growth in these three businesses, even as we continue to work on early-stage initiatives for the next generation of IDT's evolution. We appreciate your trust and investment in IDT and look forward to reporting to you on our progress throughout the year ahead.

Sincerely,

Shmuel Jonas

Chief Executive Officer

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

IDT Corporation

(Exact name of registrant as specified in its charter)

Delaware

22-3415036

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

520 Broad Street, Newark, New Jersey 07102

(Address of principal executive offices, zip code)

(973) 438-1000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on

Title of each class

Trading Symbol

which registered

Class B common stock, par value $0.01 per share

IDT

New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, based on the adjusted closing price on January 31, 2024 (the last business day of the registrant's most recently completed second fiscal quarter) of the Class B common stock of $34.58 per share, as reported on the New York Stock Exchange, was approximately $643.6 million.

As of October 7, 2024, the registrant had outstanding 23,654,509 shares of Class B common stock and 1,574,326 shares of Class A common stock. Excluded from these numbers are 4,535,028 shares of Class B common stock and 1,698,000 shares of Class A common stock held in treasury by IDT Corporation.

DOCUMENTS INCORPORATED BY REFERENCE

The definitive proxy statement relating to the registrant's Annual Meeting of Stockholders, to be held December 12, 2024, is incorporated by reference into Part III of this Form 10- K to the extent described therein.

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Index

IDT Corporation

Annual Report on Form 10-K

Part I

1

Item 1.

Business

1

Item 1A.

Risk Factors

19

Item 1B.

Unresolved Staff Comments

42

Item 1C.

Cybersecurity

42

Item 2.

Properties

43

Item 3.

Legal Proceedings

43

Item 4.

Mine Safety Disclosures

43

Part II

44

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities

44

Item 6.

[Reserved]

45

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

46

Item 7A.

Quantitative and Qualitative Disclosures about Market Risks

60

Item 8.

Financial Statements and Supplementary Data

61

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

61

Item 9A.

Controls and Procedures

61

Item 9B.

Other Information

62

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

62

Part III

63

Item 10.

Directors, Executive Officers and Corporate Governance

63

Item 11.

Executive Compensation

64

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

64

Item 13.

Certain Relationships and Related Transactions, and Director Independence

64

Item 14.

Principal Accountant Fees and Services

64

Part IV

65

Item 15.

Exhibit and Financial Statement Schedules

65

Item 16.

Form 10-K Summary

66

Signatures

67

i

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Part I

As used in this Annual Report, unless the context otherwise requires, the terms the "Company," "IDT," "we," "us," and "our" refer to IDT Corporation, a Delaware corporation, its predecessor, International Discount Telecommunications, Corp., a New York corporation, and its subsidiaries, collectively. Each reference to a fiscal year in this Annual Report refers to the fiscal year ending in the calendar year indicated (for example, fiscal 2024 refers to the fiscal year ended July 31, 2024).

Item 1. Business.

OVERVIEW

IDT is a provider of point-of-sale terminal-based solutions, international money remittances and other financial technology, or fintech, offerings, cloud communications and traditional communications services. Our businesses leverage one or more of our core strategic assets to serve differentiated markets with innovative offerings.

IDT's key businesses are:

IDT also operates other, smaller businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

1

SEGMENT REPORTING

We have four reportable business segments: (1) National Retail Solutions, or NRS; (2) Fintech; (3) net2phone; and (4) Traditional Communications.

The NRS segment, which contributed revenue of $103.1 million in fiscal 2024 and $77.1 million in fiscal 2023 (8.6% and 6.2% of our total revenues, respectively) comprises our NRS business.

The Fintech segment, which contributed revenue of $120.7 million in fiscal 2024 and $86.6 million in fiscal 2023 (10.0% and 7.0% of our total revenues, respectively), comprises our BOSS Money remittance business and other, significantly smaller, financial services businesses.

The net2phone segment, which contributed revenue of $82.3 million in fiscal 2024 and $72.4 million in fiscal 2023 (6.8% and 5.8% of our total revenues, respectively), offers unified communications as a service, or UCaaS, and contact center as a service, or CCaaS, and other significantly smaller offerings that leverage the cloud to enable intelligent business communications.

The Traditional Communications segment, which contributed revenue of $899.6 million in fiscal 2024 and $1,002.7 million in fiscal 2023 (74.6% and 81.0% of our total revenues, respectively) includes IDT Digital Payments, BOSS Revolution, and IDT Global, as well as other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Financial information by segment is presented in Note 2 to our Consolidated Financial Statements in Item 8 to Part II of this Annual Report.

Our headquarters is located at 520 Broad Street, Newark, New Jersey 07102. The main telephone number at our headquarters is (973) 438-1000 and our corporate website's home page is www.idt.net.

We make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, and all beneficial ownership reports on Forms 3, 4 and 5 filed by directors, officers and beneficial owners of more than 10% of our equity through the investor relations page of our website (http://ir.idt.net/) as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission. Our website also contains information not incorporated into this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission.

KEY EVENTS IN OUR HISTORY

1990 - Howard S. Jonas, our founder, launches International Discount Telephone to provide international call re-origination services.

1995 - We begin selling wholesale services to other long-distance carriers by leveraging our access to favorable international telephone rates generated by our retail calling traffic.

1996 - We successfully complete an initial public offering of our common stock.

2000 - We complete the sale of a stake in our net2phone subsidiary, a pioneer in the development and commercialization of Voice over Internet Protocol, or VoIP, technologies and services, to AT&T for approximately $1.1 billion in cash. We subsequently repurchased net2phone from AT&T.

2001 - Our common stock is listed on the New York Stock Exchange, or NYSE.

2006 - We sell our Russian telecom business, Corbina, for $129.9 million in cash.

2007 - We complete the sale of IDT Entertainment to Liberty Media for $220.0 million in cash, stock and other considerations.

2008 -We launch BOSS Revolution, a pay-as-you-go international calling service. BOSS Revolution has since become our flagship brand, and the BOSS Revolution platform has expanded to include payment offerings.

2009 - We spin-off our CTM Media Holdings subsidiary to our stockholders. CTM Media Holdings was subsequently renamed IDW Media Holdings, Inc.

2

Disclaimer

IDT Corporation published this content on November 06, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 06, 2024 at 21:00:00.981.