Exchange: NYSE | Sector: Communication Services | Industry: Telecommunications Services
Q4 2024
Published: Oct 15, 2024
Earnings Highlights
Revenue of $308.83M up 1.7% year-over-year
EPS of $1.45 increased by 367.7% from previous year
Gross margin of 33.1%
Net income of 36.82M
"“In fiscal 2025, we will continue to pursue opportunities to improve the performance of our business and lower costs while maximizing cash flows and reinvesting in customer acquisition.”" - Shmuel Jonas
IDT Corporation (IDT) QQ4 2024 Earnings Review: Record EBITDA Driven by Fintech Momentum, NRS Expansion, and net2phone CCaaS Growth
Executive Summary
IDT delivered a robust QQ4 2024 and completed a strong fiscal year, highlighted by a record level of adjusted EBITDA and continued profitable performance across its three segments. Fintech — led by BOSS Money and NRS Pay initiatives — reached its first quarter of positive cash flow, while net2phone demonstrated meaningful top-line growth and margin expansion through customer additions and migration to IDT’s own platform. The Traditional Communications segment began to exhibit improved economics as cost-reduction initiatives and pricing actions attenuated the decline of legacy businesses. Management framed 2025 as a continuation of this momentum with a target of sustaining EBITDA at or above the recently achieved levels and further cash-generation, while reinvesting in growth initiatives and returning value to shareholders. IDT ends QQ4 2024 with a conservative but constructive balance sheet, net debt negative by roughly $163 million (cash greater than debt), and a liquidity posture supported by approximately $255 million in cash at period end. This multi-pronged growth and cash-generation trajectory underpins a constructive long-term investment thesis, particularly if the group can sustain or accelerate EBITDA growth from Fintech, while gradually stabilizing the Traditional segment through ongoing efficiency programs.
EBITDA: $23.8 million; EBITDA Margin ~7.71%; record quarter for Adjusted EBITDA per management commentary
Net Income: $36.8 million; Net Margin ~11.92%; YoY +361.56%, QoQ +563.29%
Financial Highlights
- Revenue (Q4 2024): $308.8 million; YoY +1.65%, QoQ +3.07%
- Gross Profit: $102.2 million; Gross Margin ~33.1%; YoY +10.65%, QoQ +9.59%
- Operating Income: $20.1 million; Margin ~6.52%; YoY +68.38%, QoQ +30.41%
- EBITDA: $23.8 million; EBITDA Margin ~7.71%; record quarter for Adjusted EBITDA per management commentary
- Net Income: $36.8 million; Net Margin ~11.92%; YoY +361.56%, QoQ +563.29%
- EPS (GAAP): $1.45; Diluted EPS: $1.45; YoY +367.74%, QoQ +559.09%
- Operating Cash Flow: $28.88 million; Free Cash Flow: $23.58 million
- Cash and equivalents: $164.56 million; Total cash equivalents and short-term investments: $193.00 million; Net Debt: -$163.02 million (net cash position)
- Balance sheet: Total assets $550.10 million; Total liabilities $283.54 million; Total equity $246.18 million; Current ratio 1.513
- Revenue composition notes: Fintech (BOSS Money, NRS Pay) and net2phone driving growth; Traditional Communications delivering positive cash flow despite legacy declines
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
308.83M
1.65%
3.07%
Gross Profit
102.19M
10.65%
9.59%
Operating Income
20.14M
68.38%
30.41%
Net Income
36.82M
361.56%
563.29%
EPS
1.45
367.74%
559.09%
Key Financial Ratios
currentRatio
1.51
grossProfitMargin
33.1%
operatingProfitMargin
6.52%
netProfitMargin
11.9%
returnOnAssets
6.69%
returnOnEquity
15%
debtEquityRatio
0.01
operatingCashFlowPerShare
$1.14
freeCashFlowPerShare
$0.93
dividendPayoutRatio
3.44%
priceToBookRatio
3.95
priceEarningsRatio
6.6
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Strategy and execution: Management emphasized a pivot to cash generation and scalable profitability across all core segments, with a focus on expanding NRS Pay, growing BOSS Money, and migrating customers to net2phone’s homegrown platform. Quote: “In fiscal 2025, we will continue to pursue opportunities to improve the performance of our business and lower costs while maximizing cash flows and reinvesting in customer acquisition.” (Shmuel Jonas)
- Net2phone/Platform transition: The company is progressing with migrating customers to its own platform, aiming for long-term savings and higher user satisfaction, while noting no fixed end-date for full migration. Quote: “Basically no new customers go on to any other platform other than our own. And we hope to see savings from it and better satisfaction from our users once they're on net2phone's homegrown platform.” (Shmuel Jonas)
- Fintech profitability and growth: BOSS Money achieved EBITDA positivity in 2024 and is projected to deliver >$10 million of EBITDA in 2025, driven by ~40% top-line growth and improvements in SG&A via automation. Quote: “BOSS Money for '25 will probably deliver more than $10 million of EBITDA, more than double the EBITDA that they generated in 2024.” (Marcelo Fischer)
- Traditional segment optimization: Cost-reduction initiatives reduced cash drain; management still expects some top-line decline in legacy businesses but believes EBITDA losses will shrink substantially in 2025, with overall consolidated EBITDA potentially exceeding $100 million. Quote: “The traditional EBITDA for this coming year [2025] … maybe around $5 million, $6 million … So, like, it probably be estimated about $16 million of EBITDA coming from the Traditional businesses.” (Marcelo Fischer)
- NRS growth and value creation: NRS remains a core cash-flow machine with a targeted POS deployment cadence (~6,000 POS/year), aiming at mid-20% net margins and ~30%+ EBITDA growth in 2025. Quotes reference ongoing kiosks, Panther POS, and Pay-on-the-Tablet launches as levers for growth. (Shmuel Jonas; Marcelo Fischer)
“In fiscal 2025, we will continue to pursue opportunities to improve the performance of our business and lower costs while maximizing cash flows and reinvesting in customer acquisition.”
— Shmuel Jonas
“BOSS Money for '25 will probably deliver more than $10 million of EBITDA, more than double the EBITDA that they generated in 2024.”
— Marcelo Fischer
Forward Guidance
IDT’s 2025 outlook centers on sustaining EBITDA momentum across its three segments, with a particular emphasis on Fintech (BOSS Money, NRS Pay) and net2phone CCaaS. Management signaled a potential >$100 million consolidated EBITDA for 2025 and highlighted the following anchor points:
- Fintech: BOSS Money EBITDA to exceed $10 million in 2025, driven by roughly 40% top-line growth and improved operational efficiency; continued emphasis on GMPT enhancements and long-term customer lifetime value.
- net2phone: Continued seat growth (approximately 12,000 net new seats in Q4) and margin expansion as customers migrate to higher-revenue CCaaS offerings and premium plans including AI features.
- Traditional Communications: EBITDA declines to be mitigated to around $5–6 million, aided by cost reductions and pricing changes in mobile top-up and related services.
- Consolidated trajectory: Potentially surpassing $100 million in EBITDA for 2025, supported by EBITDA positive status across all segments and ongoing buyback/dividend leverage.
- Key risks to monitor: macroeconomic conditions affecting remittance and international traffic, competitive dynamics in money transfer (corridor concentration), regulatory changes in payments and telecom services, execution risk related to net2phone migration, and the pace of NRS growth in new markets.
Overall, the investment thesis hinges on continued strong cash generation, cross-segment synergies, disciplined capex, and a clear path toward higher-margin, higher-cash-flow corporate entities.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
IDT Focus
33.09%
6.52%
15.00%
6.60%
ATNI
99.30%
4.80%
0.73%
17.79%
SHEN
61.20%
-6.74%
-0.30%
-62.96%
IHS
48.00%
48.50%
-54.20%
98.60%
ATEX
84.50%
-9.92%
-5.84%
-16.18%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
IDT presents a constructive long-term investment thesis anchored in dynamic Fintech profitability, improving operating leverage in Traditional Communications, and a growing net2phone/CCaaS franchise. The QQ4 2024 results show a solid earnings foundation: revenue stability with meaningful margin expansion and positive cash generation across segments. The near-term catalysts include: (1) sustained EBITDA growth from BOSS Money and NRS Pay, (2) continued CCaaS adoption and AI-enhanced offerings within net2phone, (3) ongoing cost optimization in Traditional Communications, and (4) balance-sheet strength enabling buybacks/dividends and potential strategic actions (e.g., spin-off, if appropriate). Key risks to monitor include external macro conditions, regulatory shifts, and execution/ramp-up risk in platform migration. If management achieves the outlined 2025 targets (consolidated EBITDA >$100M, >$10M EBITDA from BOSS Money, continued positive cash flow from Fintech), the stock could trade on a higher multiple aligned with the cash-flow discipline and strategic optionality IDT demonstrates today. Investors should monitor growth cadence in BOSS Money, the pace of net2phone migration, and the Traditional segment’s cash-flow stabilization as the primary near-term indicators of sustained value creation.
Key Investment Factors
Growth Potential
Diversified growth engine across three segments: Fintech (BOSS Money, NRS), net2phone UCaaS/CCaaS, and Traditional Communications. Expected 2025 EBITDA growth driven by BOSS Money (>+$10M annual EBITDA), continued CCaaS expansion, and cross-sell opportunities (NRS Pay, kiosks, Panther POS). Management projects consolidated EBITDA >$100M in 2025, supported by net positive cash flow in Fintech and improving Traditional economics.
Profitability Risk
1) Traditional segment declines may persist, limiting near-term revenue upside; 2) Execution risk in migrating customers to IDT’s homegrown net2phone platform; 3) Competitive intensity and pricing pressure in money transfer and UCaaS markets; 4) Regulatory and macro influences on remittance volumes and international traffic; 5) Dependence on cross-sell success and retention across a diversified product stack.
Financial Position
Solid balance sheet with substantial liquidity: cash and cash equivalents of $164.6M and total cash/short-term investments of $193.0M; net debt of approximately -$163.0M (net cash). Total assets $550.1M; equity $246.2M; current ratio 1.513. The company generated $28.88M operating cash flow and $23.58M free cash flow in QQ4 2024, underpinning capacity for buybacks and dividends.
SWOT Analysis
Strengths
Diversified, high-growth fintech and communications portfolio (BOSS Money, NRS Pay, net2phone CCaaS) delivering EBITDA positive outcomes in 2024.
Strong cash generation and liquidity: net debt negative by ~-$163M, cash at end ~$255.5M.
Record quarterly adjusted EBITDA and multi-segment profitability.
Cross-sell potential across Fintech and Traditional segments; ongoing platform migrations to improve margins.
Weaknesses
Legacy Traditional Communications segment continues to decline in revenue; longer-term stability depends on cost discipline and pricing changes.
Dependence on several fast-evolving technology platforms (net2phone migration risk; AI feature adoption).
Relatively modest dividend yield and reliance on buybacks for capital returns (not fully visible in all markets).
Opportunities
Scale BOSS Money and NRS Pay with retail and digital channels; expand corridor mix (e.g., Mexico) to increase market share.
Enhance gross margin per transaction (GMPT) via pricing and automation in BOSS Money.
Expand CCaaS adoption and premium plans in net2phone; monetize AI features.
Kiosk/self-serve and Pay-on-the-Tablet deployments to drive in-store wallet share and merchant services.
Potential future NRS spin-off when market conditions are favorable (strategic optionality).
Threats
Regulatory changes affecting remittance and cross-border payments; compliance costs.
Competitive intensity in money transfer and UCaaS with potential price pressure.
Macro volatility impacting international traffic and cross-border volumes.
Execution risk and integration challenges in migrating customers to in-house platforms.