Good evening and welcome to the IDT Corporation's Second Quarter Fiscal Year 2021 Earnings Call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the three-month period ending January 31st of 2021. During remarks by IDT's Chief Executive Officer, Shmuel Jonas, all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After the prepared remarks, Marcelo Fischer, IDT's Chief Financial Officer, will join Mr. Jonas for Q&A. Any forward-looking statements made during this conference call, either in the prepared remarks or in the question-and-answer session, whether general or specific in nature, are subject to risk 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 it has made or may make, or to update the factors that may cause actual results to differ materially from those they forecast. In their presentation or in the question-and-answer session, IDT's management may make reference to non-GAAP measures, including Adjusted EBITDA, Adjusted EBITDA less CapEx, non-GAAP net income, and non-GAAP earnings per share. A schedule provided in IDT's earnings release reconciles Adjusted EBITDA, Adjusted EBITDA less CapEx, non-GAAP net income, and non-GAAP earnings per share to the nearest corresponding GAAP measures. Please note that the IDT earnings release is available on the Investor Relations page of IDT Corporation's website. The earnings release has also been filed on the Form 8-K with the SEC. I would now like to turn the call over to Mr. Jonas. Please go ahead. Thank you, Operator. Welcome to IDT's Second Quarter Fiscal Year 2021 Earnings Call, covering results for the three months ended January 31st, 2021. I'm joined today on the call by Marcelo Fischer, IDT's Chief Financial Officer. For a detailed report on our financial and operational results, please read our earnings release filed earlier today and our Form 10-Q, which we expect to file with the SEC on or about March 12th. IDT delivered another strong quarter, including significant year-over-year increases in consolidated revenue, income from operations, and EPS. Consolidated revenue increased $16 million to $340 million. It is our third consecutive quarter of year-over-year increases in revenue, and our sixth consecutive quarter of year-over-year increases in revenue less direct cost of revenue. Consolidated income from operations increased $11.6 million to $12.9 million this quarter, powered by a $9 million year-over-year increase in revenue less direct cost of revenue. Consolidated SG&A expense, meanwhile, was substantially unchanged year-over-year. We are successfully reducing the overhead in our traditional communication segments and redeploying those resources to support and accelerate the growth of our higher-margin businesses in the fintech and next-gen UCaaS segments. Fully diluted EPS increased to $0.51 from $0.04 in the year-ago quarter. The quarter's results were highlighted by year-over-year revenue expansion from our three higher-margin businesses: National Retail Solutions, BOSS Revolution Money Transfer, and net2phone-UCaaS. Within our fintech segment, NRS added over 1,300 units to its POS terminal network this quarter. In the year-ago quarter, we added less than 800 units. We've picked up the pace of network expansion significantly. At January 31st, NRS had over 13,700 billable units in the network. NRS's quarterly revenue increased by over 150% year-over-year to $5.2 million, led by growth in payment processing services and in digital out-of-home advertising sales. Although we are in the early stages of monetizing both of these offerings, they helped to drive a 50-plus% increase in revenue per POS terminal over the past year. Also, within fintech, our BOSS Revolution Money Transfer service increased revenue 73% to $13.3 million. We continue to build out our global disbursement network, and this quarter passed an important milestone: opening corridors to Southern Asia with the addition of Pakistan and Nepal. Looking ahead, we are laying the groundwork for the first expansion of our origination market. The reach of our disbursement network and significant transaction volumes at the key destinations enable us to provide a highly competitive D2C service from a number of countries. We expect to launch our expansion by offering BOSS Revolution Money Transfer in Canada and the U.K. in fiscal 2022. As we noted in our earnings release, our money transfer business continued to benefit from the unusual foreign exchange market conditions that drove strong growth in the second half of last year, but which diminished through the first two quarters of fiscal 2021 before dissipating by the end of the second quarter. In our net2phone- UCaaS segment, subscription revenue climbed 36% to $10.1 million. Growth has been solid in all of our markets: the U.S., Canada, South America, and Spain. Our continued growth validates our geographic strategy, but also reflects the accelerated rate at which we have been able to develop and deploy enhancements to the offering itself, most notably adding integrations with some leading CRMs and communications platforms. In the second quarter, we launched our integration with Slack, the leading channel-based messaging platform, building on previous integrations with Zoho and Microsoft Teams. More recently, we launched a powerful integration with Salesforce, the world's largest CRM. These integrations enable net2phone to approach higher seat count customers and position us to strengthen per-seat revenue without sacrificing growth. The increase in sophistication of our feature set and adaptability of our offerings prompted CIOReview publication for technology leaders to name net2phone as one of its top 20 companies providing transformative solutions for retail businesses. In our traditional communication segment, aggregate adjusted EBITDA less CapEx increased to $18.2 million, $4.6 million more than in the year-ago quarter. Strong year-over-year growth in international mobile top-up sales, in combination with stable BOSS Revolution calling revenue, more than offset decline in carrier services revenue. Looking beyond our established businesses to new opportunities, we are preparing to relaunch the BOSS Revolution mobile initiative. Our initial MVNO effort in partnership with Sprint struggled, but we are confident that this time around we will do much better. Across our businesses, the entrepreneurial spirit drives everything we do and will be a powerful source of value creation as we continue to build IDT. Now, Marcelo and I would be happy to take your questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Brian Warner, investor. Please go ahead. Hi. Thanks for taking my question. I have two questions. And the first is actually a two-part question, but considering I'm just wondering if I can get a little bit of insight into your thinking about maybe appropriate timing for the next spin-off. What sort of metrics you might want to hit operationally before you think that's ready? And sort of the second part of the same question would be when you think the net2phone UCaaS business might be ready for that. And then just finally, I'm wondering if you can give us a little color on your traditional phone business seemed to. Congratulations, by the way. Actually, all your businesses looked good. But I'm just wondering, in your traditional business, where you seem to be showing better revenue growth and very tight on costs, can you give us sort of any sense on what you think the outlook for that business might hold? I mean, this quarter you generated, I think it was over $18 million, and essentially a free cash flow there. And I'm just wondering what you think sort of the outlook for that business is? Okay. This is Shmuel. I will try to remember everything and answer your questions, and Marcelo, feel free to either step in at any point, or if you want to give better answers after I'm finished, you're welcome to do so as well, so I believe that our goal is to spin off net2phone sometime, I would say, before the end of the calendar year, or possibly slightly after. We've done quite a number of spin-offs, as you know, but they do take a lot of work, and the pandemics and building businesses come first, unfortunately, but that is our goal, and frankly, we don't really have enough bandwidth to do two spin-offs all at once. I would say that we can't really even start to think about the second one until we finish the first one, but we're also building other new businesses in the background as well. That sounds great. I think that answers the first part. And then, as far as your question about cash flow and what can you expect from the business going forward, or I'll call it the traditional business going forward, again, we don't give forecasts on what our results will be, but we feel that the business is doing very well. And again, I don't know if some of it has to do with COVID and people wanting to stay in touch and share resources back home more than they would if the pandemic wasn't going on, or if we're just doing a good job operating the business. It's hard for me to give you much more insight because, frankly, I don't know. But all I can say is we come in every day and we try hard, and we feel pretty confident in the strength of the traditional business going forward. Okay, and some of the stuff that I've read on the traditional business, I guess I'm curious to what extent have the free services and the WhatsApps of the world maybe impacted that less than some people would have thought? I mean, maybe so. Again, I believe that free services are, and I've said this for many years, our number one competitor, if not other pinless companies or other companies, it's free. That is our biggest competitor. Again, I think that we provide a great service to our customers. The quality that you get with us versus free options are, in some countries, night and day. In other countries, frankly speaking, the free really has basically made us uncompetitive. It's really a market-by-market answer. Terrific. Yeah. Yeah. I'm sorry. Hi, Marcelo. Just a few comments on top of Shmuel's in terms of the spin-offs. Obviously, our focus right now is on net2phone with all efforts on it. We haven't really done much thinking about the fintech segment, and even when we start that process post-net2phone, discussions will be held at that time as to whether a potential spin-off would occur of the entire fintech segment or just of the NRS part of the business, but that's to be determined probably a year plus from now, those discussions will take place, and in terms of the traditional business, so yes, the business has shown stronger resilience than what we had expected. COVID has helped that process as well, particularly on our pinless business. The margins on Pinless have improved as more of our recharges are shifting toward digital direct-to-consumer in terms of the mix with retail, where we have better margins. Our IMTU business is doing extremely well. It continues to be very strong, and we believe that that will continue to grow in the coming years, and the combination of IMTU together with Pinless will more than offset, we believe, or continue to offset declines that we see in our revenues and margins happening on the wholesale carrier side. Wholesale carrier have been affected by COVID, by the fact that more and more of the calling that goes on happens via IP over the top, video conferencing, and other modes of communication, so we do expect wholesale carrier revenues and margins to continue to decline, but hopefully we'll be able to offset those declines with the strength of the other two businesses. Because of that, we are expecting that the strong cash flow generation that we have seen from the traditional communication business in the $40-$45 million range, when we look at EBITDA less CapEx, that that trend could probably continue for quite a long time. I gotcha. Okay. Terrific. Thank you both so much. Thank you. The next question will come from James Smith, investor. Please go ahead. Hi. Good evening. Thank you for taking the questions. I had two questions for you. Thank you. The first was mentioned in the prepared remarks, a roughly 50% revenue per terminal increase in the NRS business has been achieved in the last 12 months. If you think very directionally over the next year or two with the various initiatives you have going on to monetize that business, do you have sort of a house view as to where revenue per terminal may head over the next year or two? And then the second question was specifically as regards UCaaS, do you have a revenue figure in mind at which you think that business potentially breaks even at the EBITDA level? Thank you. I have, I guess, a fair amount of knowledge on the economics of how much each NRS terminal brings in. However, it really does vary a tremendous amount, and I mean, hundreds of% difference from what I'll call a store that is not doing merchant processing with us and is maybe in an area where advertisers aren't quite as interested at talking to consumers, to an area where advertisers are interested in talking to the consumers there and where the merchant processing volume is quite high, so it's really hard for me to give you an exact answer. I mean, it's like saying, "What does an average restaurant give you in profit?" I couldn't give it to you. I mean, it's going to depend. I mean, you could have a restaurant in Texas right now that has no mess and is completely open and doing or you can have a restaurant like in New York that's at, I don't know, 25% or 35% capacity and isn't doing any business. So there isn't a very good answer of what we aim for with each particular store. What I would say is that we expect over time our penetration for merchant services in stores to go up significantly. And we've already started to see that, and we expect it to continue. And the amount of services and features that we provide our merchants is really unparalleled for the price. And we've done a lot on the pricing side to differentiate the price that you pay for those services when you get merchant services with it and the price when you don't get merchant services with it. So we're kind of unique in the sense that we don't force you into getting our merchant services. You can get our services without it, but you're going to pay significantly more for the software if you don't get our merchant services. So I hope that that answered your question a little bit. If it didn't, you're welcome to rephrase it. As far as the net2phone business, it's a different answer. I think that EBITDA profitability could come very quickly if we wanted to slow down sales. I think if we want to increase sales, there's a cost for every new sale that we bring on and for ramping up those sales. We try to strike, I'll call it, a healthy balance between investing in sales and technology and not being maybe too aggressive. Although some days, again, I wonder whether or not we should be investing more to grow quicker because we really are getting very, very good returns and very, very good retention. Frankly, we have the money to do so. That's really the case in all of our growing businesses, where the businesses are growing very, very well. It's really just a question of how much gasoline we want to pour on them to have them grow quicker. Again, people, I'll say, investors want a balance. They want a company to throw off earnings and to operate efficiently and at the same time grow. We try to do that balance. But some days, I wonder whether or not we are choosing the correct balance or if we should be investing more to grow these businesses even faster. That is very helpful, and I appreciate it, Shmuel. If you wouldn't mind rephrasing the NRS question slightly differently, I think you mentioned in the most recent 10-K that the business is sort of servicing into the 35,000 merchants into which the traditional communications products are being distributed. Now, call it 13,000-14,000 merchants with the NRS product. Do you see a sort of ceiling on that business over the next year or two or three? How do you think about the addressable market in terms of number of merchants potentially? Not at all. I mean, I actually think that oftentimes people believe that we only go after stores that have sold BOSS Revolution in the past, and that's just not a reality, so a large percentage of our customers, I will say originally when we started, came from BOSS Revolution stores, and still to this day, obviously, we have an easier time going into stores than we've been going into for years and selling them, but a huge number of our sales are coming from stores that never sold any IDT products before, so in terms of the amount of stores that we believe is the addressable market, it's in the hundreds of thousands. It's not a 35,000 store number as our addressable market. But we have done phenomenally well getting into the stores that have been our customers for a long time because they know that we provide great service and great products. Understood. Thank you for all the color and keep up the good work. Thank you very much. Thank you. The next question will come from Benjamin Mersch with Mersch Capital. Please go ahead. Hi. Congratulations on another great quarter. I just wanted to ask, what's differentiating National Retail Solutions from other point-of-sale companies such as Square? They're obviously bigger companies. So just if you could provide a little bit of color on that, I would appreciate it. It sounds like you're in the business. Maybe you can provide some color. But I would say that I'm hearing an echo. So if you don't mind muting, I apologize. I would say that a couple of things differentiate us. As I talked about just a minute or two ago, one thing that differentiates us is that we don't require you to get merchant services. Square and Clover and Toast, I'll just use as three examples, they require you to get their merchant services. And therefore, if a merchant is already in a contract or is hesitant about switching from the bank that they're currently using or any number of reasons why a merchant wouldn't feel comfortable, we don't force them to switch to our merchant services. We believe that we provide better pricing, better service, etc., than even some of our biggest competitors. You can actually get a human being on the phone when you call us. But that being said, we, I'll say, have a softer sell than some of our larger competitors like the ones you mentioned. I think that our software is also actually, in a certain way, more purpose-built for the types of stores that we currently serve. I would say that we are planning to sort of augment that in the future in the sense that right now, our terminals might not be the prettiest terminals that you can buy. But we are also coming out with a line of what I'll call higher-end terminals that are more aesthetically pleasing than the ones that we currently sell, which we think will fit a whole nother segment of stores that might today not buy our terminals. So that doesn't mean that we're going to stop selling what we currently sell. I mean, we're going to have an additional line of hardware. The other thing is we are in the process of building out a similar, I'll call it, way of getting customers to Square does, which is you can just go and download our app from the app store and get one of our not dongles, but something in that sphere and start using our merchant services. In my opinion, though, our software is really, in many respects, better than theirs. I know that's a little bit maybe cocky and in some respects, obviously not as good as theirs. But we really think that we have an excellent product. It's extremely reliable. I mean, we have knocks on wood, as they say, but zero outages. And it's just a quality product at a good price. That's really what it comes down to, and we have a great sales team selling it. Thank you very much. The next question will come from Brian Warner with Private Investor. Please go ahead. Hi. If I could just give a follow-up on the NRS business. If you think about that business at some point in the future, call it maybe three or five years, and you think of sort of a reasonably healthy merchant in a reasonably healthy market, and if you take bucket merchant services for somebody who takes it, and then another bucket, I guess, is advertising, and maybe a third is analytics. Can you give any sort of color on proportionally the size of the opportunities in your mind and what a typical merchant like that might look like in terms of a revenue split between those segments? I really can't give you a clear answer. I mean, as I said, it's really, there's so many different dependencies. I mean, again, from an advertising point of view, it could be you have a store that has 3,000 people come into it a day, and for whatever reason, advertisers aren't particularly interested in the city or the street or the demographics of the community in that area, and advertising is low. And it could be the same thing for the data. It could be that, I don't know, a beer company really wants to know how their competitors are doing in a specific market because their sales have declined in that market, and therefore, they're willing to pay us a lot of money for data insights into what's going on in that market. In a big market where they might be doing really well, they just don't care because they think that they're doing a good job. On the merchant services, it's much easier, obviously, to model because there's an approximate amount that we expect to make per dollar swiped, I'll call it, or tapped, or however you do it nowadays. And again, that's improved over time as we get bigger and better at it. And we expect that to again. I can't give you. I hope I'm sort of answering your question. I mean, we don't get questions right often because for me, this is like an exciting night. Usually, I'm off the call in nine minutes after reading my speech. So yeah, I mean, if you have a follow-up question to it, I mean, but again, in terms of the market, I think the market is, as I said, enormous. I mean, I really think that we've barely scratched the surface. And I think that NRS one day is going to be way more valuable than IDT is today. And if you're buying into IDT today, you're getting a great deal because you're getting three huge opportunities that already exist for. Right. So Brian, as Shmuel said, it's hard to predict what the mix will be down the road. But one thing is for certain, as we continue to aggressively trying to grow the typing analytics and our merchant services, those three channels obviously have significantly higher margins than just selling the terminal unit and the monthly recurring fee that you get on that. So one thing that probably will be very likely is that as NRS continues to grow, both network and the services, is that the gross margins and net margins on the business will continue to increase. Yeah. I mean, I'll just add one more piece of color. I mean, as I said, as I talked about a little bit earlier, we've changed the pricing with our software so that you're incentivized to go with merchant services. That being said, we've also added a ton of features. And even customers that are getting our merchant services are now adding more revenue to us than they ever have before because they're able to buy higher plans that include more features. And that's really something that's only happened very, very recently. Sounds great, guys. Thanks for all the color. Appreciate it. Again, if you have a question, please press star, then one. As there are no more questions, this concludes our question and answer session and conference call. Thank you for attending today's presentation. You may now disconnect.