Executive Summary
IDT’s QQ2 2024 results reflect a continued tilt toward high-growth, recurring-revenue segments (NRS, BOSS Money, net2phone) while maintaining robust cash flow generation from the Traditional Communications business. Revenue declined modestly year over year and quarter over quarter, but the company delivered a record consolidated gross profit and higher gross margins, underscoring operating discipline in a growth-oriented portfolio. Management highlighted the milestone achievement of $100 million annual revenue run rate for both NRS and BOSS Money, EBITDA breakeven for Fintech in the quarter, and a deliberate capital-allocation shift toward dividends and buybacks as cash generation expanded. The Board’s decision to initiate a quarterly cash dividend underscores IDT’s emphasis on returning capital to shareholders while sustaining investment in next-generation initiatives. Looking ahead, management outlined a path toward earnings growth from Money Transfer scale, potential modest EBITDA improvements in the Fintech segment, and ongoing organic expansion complemented by selective opportunistic acquisitions. Overall, the QQ2 cadence signals a constructive balance between growth and cash-driven returns for investors.
Key Performance Indicators
Key Insights
Revenue: 296.1m in QQ2 2024; YoY -5.68%, QoQ -1.70%. Gross profit: 93.63m; YoY +2.28%, QoQ -0.85%. Operating income: 16.66m; YoY -8.39%, QoQ -2.97%. Net income: 14.43m; YoY -1.35%, QoQ +88.34%. EPS: 0.57; YoY 0.00%, QoQ +90.00%. EBITDA: 21.75m; EBITDA margin ~7.35%. Gross margin: 31.62%. Net income margin: 4.87%. Free cash flow: 20.37m. Cash at end of period: 234.31m. Net cash position: -229.05m (net cash assured by cash balances and minimal net debt). Current ratio: 1.415; Quick ratio: 1.415. R...
Financial Highlights
Revenue: 296.1m in QQ2 2024; YoY -5.68%, QoQ -1.70%. Gross profit: 93.63m; YoY +2.28%, QoQ -0.85%. Operating income: 16.66m; YoY -8.39%, QoQ -2.97%. Net income: 14.43m; YoY -1.35%, QoQ +88.34%. EPS: 0.57; YoY 0.00%, QoQ +90.00%. EBITDA: 21.75m; EBITDA margin ~7.35%. Gross margin: 31.62%. Net income margin: 4.87%. Free cash flow: 20.37m. Cash at end of period: 234.31m. Net cash position: -229.05m (net cash assured by cash balances and minimal net debt). Current ratio: 1.415; Quick ratio: 1.415. ROE: 6.81%; ROA: 2.76%; Net debt: negative (net cash). Dividend initiation noted; ongoing buyback program remains discretionary.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
296.10M |
-5.68% |
-1.70% |
| Gross Profit |
93.63M |
2.28% |
-0.85% |
| Operating Income |
16.66M |
-8.39% |
-2.97% |
| Net Income |
14.43M |
-1.35% |
88.34% |
| EPS |
0.57 |
0.00% |
90.00% |
Key Financial Ratios
operatingProfitMargin
5.62%
operatingCashFlowPerShare
$0.99
freeCashFlowPerShare
$0.81
Management Commentary
- Growth momentum across IDT’s growth platforms: NRS and BOSS Money surpassed the $100 million annual revenue run rate milestone, underscoring scalable, recurring revenue trajectories. - Fintech profitability advancing: BOSS Money delivered 42% YoY revenue growth and contributed to Fintech achieving adjusted EBITDA breakeven for the quarter, signaling ability to fund other initiatives from cash flow. - Net2phone and cash flow dynamics: net2phone subscription revenue grew 19% YoY and achieved cash-flow breakeven (adjusted EBITDA less CapEx), highlighting the acceleration of cloud UCaaS growth. - Strategic capital allocation: Management signaled a shift toward a predictable quarterly dividend in addition to ongoing buybacks, reflecting balance-sheet strength and durable cash generation. - M&A and inorganic opportunities: IDT remains in the market for acquisitions that improve profitability or expand into new corridors and geographies, but emphasizes organic growth and selective small tuck-ins (e.g., restaurant technology NRS add-on) rather than large, transformative deals. - Balance sheet and efficiency: The company notes ongoing overhead reductions and operational streamlining, with expectations of benefits in the third quarter and beyond. - Management tone on risk and execution: While expense management was not perfect in the quarter, management guided that improvements are anticipated, and a disciplined approach to capital will remain a priority.
"The second quarter was highlighted by the continued expansion of our growth businesses, with both NRS and BOSS Money surpassing the $100 million annual revenue run rate milestone."
— Shmuel Jonas
"We recently introduced an option for our US-based customers to send money directly to bank accounts through the recipient’s Visa or Mastercard. We are seeing good customer response in the remittance corridors where we have launched this offering and we’ll be expanding the service to many other destinations in the coming months."
— Shmuel Jonas
Forward Guidance
Management commentary points to a conservative but constructive outlook. Key takeaways include: 1) Fintech profitability trajectory anchored by BOSS Money and supported by adjacent initiatives (e.g., Gibraltar Bank, Neo‑Bank) with an anticipated EBITDA uplift to approximately $14–$15 million from Money Transfer over the next 2–3 years if growth decelerates moderately and incremental customer-acquisition investment is calibrated. 2) Net2phone and NRS are expected to continue contributing robust, recurring revenues with cash-flow breakeven accomplished; scale-driven profitability remains a function of incremental investments and cross-sell dynamics within the ecosystem. 3) Traditional Communications remains a durable cash generator, enabling a disciplined capital-allocation framework. 4) The Board-approved quarterly dividend complements opportunistic stock buybacks, signaling a commitment to shareholder value creation while preserving liquidity for strategic opportunities. Key factors investors should monitor include: pace of cross-border remittance corridors expansion, regulatory developments in Gibraltar and neo-banking ventures, effectiveness of cost-control measures, potential new corridors or product verticals, and any M&A activity that could meaningfully alter the growth/margin profile.