IDT CORP [IDT] Filings

10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-16371

IDT CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	22-3415036
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

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:

Title of each class		Name of each exchange on which registered
Class B common stock, par value $.01 per share		New York Stock Exchange

Trading symbol: IDT

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 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 the 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

As of June 5, 2024, the registrant had the following shares outstanding:

Class A common stock, $.01 par value:	1,574,326 shares outstanding (excluding 1,698,000 treasury shares)
Class B common stock, $.01 par value:	23,764,649 shares outstanding (excluding 4,400,168 treasury shares)

IDT CORPORATION

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Equity	6

	Consolidated Statements of Cash Flows	8

	Notes to Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	38

Item 4.	Controls and Procedures	39

PART II. OTHER INFORMATION		40

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40

Item 5.	Other Information	40

Item 6.	Exhibits	40

SIGNATURES		41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

IDT CORPORATION

CONSOLIDATED BALANCE SHEETS

	April 30, 2024			July 31, 2023
	(Unaudited)			(Note 1)
	(in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	139,773		$	103,637
Restricted cash and cash equivalents		93,072			95,186
Debt securities		29,384			42,414
Equity investments		4,844			6,198
Trade accounts receivable, net of allowance for credit losses of $6,717 at April 30, 2024 and allowance for doubtful accounts of $5,642 at July 31, 2023		38,967			32,092
Settlement assets, net of reserve of $1,676 at April 30, 2024 and $1,143 at July 31, 2023		21,435			32,396
Disbursement prefunding		36,626			30,113
Prepaid expenses		20,046			16,638
Other current assets		24,385			28,394

Total current assets		408,532			387,068
Property, plant, and equipment, net		38,515			38,655
Goodwill		26,254			26,457
Other intangibles, net		6,591			8,196
Equity investments		6,630			9,874
Operating lease right-of-use assets		4,370			5,540
Deferred income tax assets, net		15,270			24,101
Other assets		11,140			10,919

Total assets	$	517,302		$	510,810

Liabilities, redeemable noncontrolling interest, and equity
Current liabilities:
Trade accounts payable	$	23,976		$	22,231
Accrued expenses		99,335			110,796
Deferred revenue		32,070			35,343
Customer deposits		83,660			86,481
Settlement liabilities		22,853			21,495
Other current liabilities		15,937			17,761

Total current liabilities		277,831			294,107
Operating lease liabilities		1,753			2,881
Other liabilities		3,647			3,354

Total liabilities		283,231			300,342
Commitments and contingencies		-			-
Redeemable noncontrolling interest		10,791			10,472
Equity:
IDT Corporation stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued		—			—
Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and 1,574 shares outstanding at April 30, 2024 and July 31, 2023		33			33
Class B common stock, $.01 par value; authorized shares—200,000; 28,165 and 27,851 shares issued and 23,766 and 23,699 shares outstanding at April 30, 2024 and July 31, 2023, respectively		282			279
Common stock, value		282			279
Additional paid-in capital		303,055			301,408
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,399 and 4,152 shares of Class B common stock at April 30, 2024 and July 31, 2023, respectively		(122,668	)		(115,461	)
Accumulated other comprehensive loss		(17,243	)		(17,192	)
Retained earnings		51,028			24,662

Total IDT Corporation stockholders’ equity		214,487			193,729
Noncontrolling interests		8,793			6,267

Total equity		223,280			199,996

Total liabilities, redeemable noncontrolling interest, and equity	$	517,302		$	510,810

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	2024			2023			2024			2023
	Three Months Ended April 30,						Nine Months Ended April 30,
	2024			2023			2024			2023
	(in thousands, except per share data)

Revenues	$	299,643		$	299,295		$	896,946		$	935,047
Direct cost of revenues		202,599			211,734			608,982			668,513
Gross profit		97,044			87,561			287,964			266,534
Operating expenses:
Selling, general and administrative (i)		68,962			60,130			200,685			177,475
Technology and development (i)		12,640			12,145			37,975			35,870
Severance		779			145			1,648			458
Other operating expense, net (see Note 10)		3,231			4,764			3,041			3,948

Total operating expenses		85,612			77,184			243,349			217,751

Income from operations		11,432			10,377			44,615			48,783
Interest income, net		1,162			709			3,201			2,029
Other expense, net		(3,273	)		(382	)		(6,326	)		(2,610	)

Income before income taxes		9,321			10,704			41,490			48,202
Provision for income taxes		(2,979	)		(2,960	)		(10,918	)		(12,594	)

Net income		6,342			7,744			30,572			35,608
Net income attributable to noncontrolling interests		(791	)		(854	)		(2,937	)		(3,093	)

Net income attributable to IDT Corporation	$	5,551		$	6,890		$	27,635		$	32,515

Earnings per share attributable to IDT Corporation common stockholders:
Basic	$	0.22		$	0.27		$	1.10		$	1.27
Diluted	$	0.22		$	0.27		$	1.09		$	1.27

Weighted-average number of shares used in calculation of earnings per share:
Basic		25,345			25,518			25,233			25,544
Diluted		25,516			25,612			25,380			25,589

(i) Stock-based compensation included in:

Selling, general and administrative expense	$	2,027		$	1,579		$	5,025		$	3,096
Technology and development expense	$	91		$	100		$	350		$	441

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	2024			2023			2024			2023
	Three Months Ended April 30,						Nine Months Ended April 30,
	2024			2023			2024			2023
	(in thousands)
Net income	$	6,342		$	7,744		$	30,572		$	35,608
Other comprehensive income (loss):
Change in unrealized loss on available-for-sale securities		(127	)		115			77			81
Foreign currency translation adjustments		160			(879	)		(128	)		(3,251	)

Other comprehensive income (loss)		33			(764	)		(51	)		(3,170	)

Comprehensive income		6,375			6,980			30,521			32,438
Comprehensive income attributable to noncontrolling interests		(791	)		(854	)		(2,937	)		(3,093	)

Comprehensive income attributable to IDT Corporation	$	5,584		$	6,126		$	27,584		$	29,345

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)


	Three Months Ended April 30, 2024 (in thousands)
		IDT Corporation Stockholders
		Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interests			Total Equity
BALANCE AT JANUARY 31, 2024	$	33	$	281	$	300,631	$	(118,631	)	$	(17,276	)	$	46,746		$	8,103		$	219,887
Dividends declared ($0.05 per share)		—		—		—		—			—			(1,269	)		—			(1,269	)
Repurchases of Class B common stock through repurchase program		—		—		—		(2,520	)		—			—			—			(2,520	)
Restricted Class B common stock purchased from employees		—		—		—		(1,517	)		—			—			—			(1,517	)
Stock issued to an executive officer for bonus payment		—		—		1,495		—			—			—			—			1,495
Business acquisition holdback payment		—		—		100		—			—			—			—			100
Exercise of stock options
Restricted Class B common stock purchased from employees
Stock-based compensation		—		1		829		—			—			—			—			830
Distributions to noncontrolling interests		—		—		—		—			—			—			(3	)		(3	)
Other comprehensive income		—		—		—		—			33			—			—			33
Net income		—		—		—		—			—			5,551			693			6,244
BALANCE AT APRIL 30, 2024	$	33	$	282	$	303,055	$	(122,668	)	$	(17,243	)	$	51,028		$	8,793		$	223,280

	Nine Months Ended April 30, 2024 (in thousands)
		IDT Corporation Stockholders
		Class A Common Stock		Class B Common Stock		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interests			Total Equity
BALANCE AT JULY 31, 2023	$	33	$	279	$	301,408		$	(115,461	)	$	(17,192	)	$	24,662		$	6,267		$	199,996
Dividends declared ($0.05 per share)		—		—		—			—			—			(1,269	)		—			(1,269	)
Exercise of stock options		—		—		172			—			—			—			—			172
Repurchases of Class B common stock through repurchase program		—		—		—			(5,675	)		—			—			—			(5,675	)
Restricted Class B common stock purchased from employees		—		—		—			(1,532	)		—			—			—			(1,532	)
Restricted net2phone common stock purchased from employees		—		—		(3,611	)		—			—			—			53			(3,558	)
Exchange of National Retail Solutions shares for Class B common stock		—		2		81			—			—			—			(83	)		—
Stock issued to an executive officer for bonus payment		—		—		1,495			—			—			—			—			1,495
Business acquisition holdback payment		—		—		100			—			—			—			—			100
Stock-based compensation		—		1		3,410			—			—			—			—			3,411
Distributions to noncontrolling interests		—		—		—			—			—			—			(62	)		(62	)
Other comprehensive loss		—		—		—			—			(51	)		—			—			(51	)
Net income		—		—		—			—			—			27,635			2,618			30,253
BALANCE AT APRIL 30, 2024	$	33	$	282	$	303,055		$	(122,668	)	$	(17,243	)	$	51,028		$	8,793		$	223,280

IDT CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY—Continued

(Unaudited)

	Three Months Ended April 30, 2023 (in thousands)
		IDT Corporation Stockholders
		Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interests			Total Equity
BALANCE AT JANUARY 31, 2023	$	33	$	278	$	298,649	$	(106,906	)	$	(13,711	)	$	9,795	$	4,876		$	193,014
Repurchases of Class B common stock through repurchase program		—		—		—		(2,500	)		—			—		—			(2,500	)
Restricted Class B common stock purchased from employees		—		—		—		(4	)		—			—		—			(4	)
Stock-based compensation		—		—		1,679		—			—			—		—			1,679
Distributions to noncontrolling interests		—		—		—		—			—			—		(106	)		(106	)
Other comprehensive loss		—		—		—		—			(764	)		—		—			(764	)
Net income		—		—		—		—			—			6,890		794			7,684
BALANCE AT APRIL 30, 2023	$	33	$	278	$	300,328	$	(109,410	)	$	(14,475	)	$	16,685	$	5,564		$	199,003

	Nine Months Ended April 30, 2023 (in thousands)
		IDT Corporation Stockholders
		Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			(Accumulated Deficit) Retained Earnings			Noncontrolling Interests		Total Equity
BALANCE AT JULY 31, 2022	$	33	$	277	$	296,005	$	(101,565	)	$	(11,305	)	$	(15,830	)	$	3,022	$	170,637
BALANCE	$	33	$	277	$	296,005	$	(101,565	)	$	(11,305	)	$	(15,830	)	$	3,022	$	170,637
Exercise of stock options		—		—		172		—			—			—			—		172
Repurchases of Class B common stock through repurchase program		—		—		—		(7,506	)		—			—			—		(7,506	)
Restricted Class B common stock purchased from employees		—		—		—		(339	)		—			—			—		(339	)
Stock issued to certain executive officers for bonus payments		—		—		615		—			—

IDT CORP [IDT] Filings
10-Q	[2024-06-10]
10-Q	[2024-03-11]
10-Q	[2023-12-11]
10-K	[2023-10-16]
10-Q	[2023-06-09]
10-Q	[2023-03-13]
10-Q	[2022-12-13]
10-K	[2022-10-14]
10-Q	[2022-06-09]
10-Q	[2022-03-14]
10-Q	[2021-12-10]
10-K	[2021-10-14]
10-Q	[2021-06-09]
10-Q	[2021-03-15]
10-Q	[2020-12-10]
10-K	[2020-10-14]
10-Q	[2020-06-09]
10-Q	[2020-03-11]
10-Q	[2019-12-10]
10-K	[2019-10-11]
10-Q	[2019-06-07]
10-Q	[2019-03-12]
10-Q	[2018-12-10]
10-K	[2018-10-15]
10-Q	[2018-06-11]
10-Q	[2018-03-12]
10-Q	[2017-12-11]
10-K	[2017-10-16]
10-Q	[2017-06-09]
10-Q	[2017-03-13]
10-Q	[2016-12-12]
10-K	[2016-10-14]
10-Q	[2016-06-09]
10-Q	[2016-03-11]
10-Q	[2015-12-10]
10-K	[2015-10-14]
10-Q	[2015-06-09]
10-Q	[2015-03-12]
10-Q	[2014-12-10]
10-K	[2014-10-14]
10-Q	[2014-06-09]
10-Q	[2014-03-12]
10-Q	[2013-12-10]
10-K	[2013-10-15]
10-Q	[2013-06-10]
10-Q	[2013-03-12]
10-Q	[2012-12-10]
10-K	[2012-10-15]
10-Q	[2012-06-11]
10-Q	[2012-03-12]