Good evening, welcome to the IDT Corporation's third quarter fiscal year 2023 earnings call. In today's presentation, IDT's management will discuss IDT's financial and operational results for the three-month period ended April 30th, 2023. 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 Mr. Jonas's 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 Q&A session, whether general or specific in nature, are subject to risks 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 they have made or may make, or to update the factors that may cause actual results to differ materially from those that they forecast. In their presentation or in the Q&A session, IDT's management may make reference, excuse me, to non-GAAP measures, including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings or loss per share. A schedule provided in the IDT earnings release reconciles adjusted EBITDA, non-GAAP, net income, and non-GAAP earnings or loss per share to the nearest corresponding GAAP measures. Please note that the IDT earnings release is available on the investor relations page of the IDT Corporation website. The earnings release has also been filed on the Form 8-K with the SEC. I will now turn the conference over to Mr. Jonas. Hi, thank you very much, operator. Welcome to IDT's earnings conference call. After my remarks, Marcelo Fischer, IDT's Chief Financial Officer, will join me and we'll be available to answer questions. My brief remarks today focus on the third quarter of our fiscal year 2023, the three months ended April 30th. For more detailed discussion of our financial and operational results, please read our earnings release filed earlier today and our Form 10-Q that we expect to file with the Securities and Exchange Commission on Friday. For the third quarter of our 2023 fiscal year, IDT generated year-over-year increases in gross profit, adjusted EBITDA and EPS, highlighted by the continued expansion of our three high-growth, high-margin businesses, and by the relatively resilient cash flows from our traditional communication segment, even as revenue from this segment continued to decline. NRS added new POS terminals and payment processing accounts at a record pace this quarter and achieved solid year-over-year increases in all three of its recurring revenue verticals, as well as in recurring revenue per terminal. Advertising revenue decreased sequentially due to seasonal reductions in demand and the advertising industry's pullback, particularly in the digital out-of-home segment. Behind the scenes, we're enhancing our advertising plan platform and diversifying our network partnerships to pursue new opportunities, both within and outside of the digital out-of-home market. This foundational work should pay off when advertising demand rebounds. Given our success in accelerating the pace of new payment processing account sign-ups, increasing merchant services ARPU, and bringing new premium features to our platform, we expect that NRS will continue to perform extremely well. At net2phone, we increased subscription revenue by 20% year-over-year, while approaching cash flow break even. In the coming weeks, we expect to launch exciting new offerings and features that will help to build our momentum, including net2phone AI, which includes powerful analytical tools powered by artificial intelligence technology. At BOSS Money Remittance, volume increased by 38% year-over-year, driving a 29% revenue increase. I'm especially pleased by the robust growth of BOSS Money's retail channel over the past few quarters. Throughout the rest of the BOSS ecosystem, the synergy between retail and direct-to-consumer drive better economics than we could achieve with a single approach. We believe that the same will be true for the money remittance. For that reason, we continue to focus on retail channel expansion as we invest to achieve scale and long-term profitability. With our diverse mix of businesses backed by a solid balance sheet and with no debt, IDT is positioned to continue delivering solid results across a wide variety of economic conditions while returning value to our stockholders. Before we move on to the Q&A, I want to thank our employees for their great work and thank our stockholders for putting their faith and their capital with us. Now, Marcelo and I will be happy to take your questions. Thank you. 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 are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. We will now pause momentarily to assemble our roster. Okay, our first question comes from Alex Rohr. Please announce your affiliation, then pose your question. Hi, guys. Can you hear me? Yes, we can. Hi, guys. So just quickly, this morning, the NRS Insights Report showed 25,000 terminals currently, which implies a really strong month of May, like 1,000 net adds at the month of May. Just wondering, you know, was there anything particular going on in the month of May that would have led to unusual strength? Yeah. Hi, Alex, it's Marcelo. You're right, you're reading things carefully. It's mostly because of rounding. May have been our best month ever for adding POSs into the network. It's mostly rounding. We added more like 630 new POSs and on that basis. Because of rounding, it makes it look like it was 1,000. It was our largest increase ever for the month. Understood. Thanks. Just shifting gears to mobile top-up. What's driving, I mean, Cuba, I think at this point is sort of... We've been dealing with this for a long time, but what's driving the continued declines in the business? Is there some point at which you would expect the business to resume growing year-on-year? You know, there's a bunch of factors that have driven it. I mean, one is, you know, we really focus on profitable growth, and we're not just in it to have volume. You know, some players have really come into the market and disrupted, really not looking for profitability, maybe even, you know, they're losing money. You know, we've decided to sort of, you know, take a, I'll call it a wait and see approach and to see if, you know, they can afford to continue to, you know, subsidize the market. You know, at the same time, you know, our, you know, direct to consumer channel and our, you know, retail channel have been, you know, relatively stable. It's much more of a, you know, a situation in the wholesale side of the business than it is in those two. But we have, you know, a bunch of new enhancements coming out, you know, both in retail and in direct to consumer that we expect to, you know, help increase growth, as well as some new marketing campaigns. And our new Zendit platform, you know, we hope will, you know, help with the deterioration that we've seen in wholesale. Great. Thank you. Okay, the next question is from David Polansky. Please announce your affiliation, then pose your question. Hey, I'm from David Polansky, from Immersion Investments. Thanks for taking my question, guys. I wanna start big picture, talking about NRS and poking kind of around how big this thing can get. I mean, we've been sitting on sort of a unit TAM figure for NRS at about 200,000 retail locations. Just looking at market share data for a lot of your states, I think New York and California, I think you have roughly a 25% market share. I think New Jersey, I mean, correct me if I'm wrong, but I think it's somewhere in the 30%-40% range. Is there a reason to think that we can't get to, like, a 25% share figure nationwide, which would put you somewhere in sort of the 50,000 unit range? Well, I mean, I'd say two things. Just from walking around, I don't feel like we have 25% or 30%, you know, market share yet, but I hope to be there one day. You know, that's in the New York, New Jersey area, where I, you know, walk around more frequently. But, you know, again, the 200,000, you know, number is really a very hard number to put, you know, our finger on it. I mean, you know, again, more and more, we sell into, you know, stores that, you know, I wouldn't have thought would have been, you know, typical for NRS locations, whether or not it's, you know, beauty stores or dollar stores or, you know, general stores. I mean, so, you know, auto parts stores, et cetera. I think, like, you know, the TAM is a little bit of a moving target. I don't know if that's really, you know, our gating factor, is what percentage of that number we'll get. You know, I think, you know, we have to continue to, you know, provide great service and great new products, and we'll continue to grow. You know, and continue to expand our sales channels. You know, again, we are doing that aggressively. You know, you can see a little bit of that in the SG&A. We expect that to, you know, see the number of units increasing, you know, quite substantially over the next couple of months. Hopefully, you know, long past that. I think you'll start to see that, you know, May number ramp up. Great. You mentioned, I mean, you're seeing increasing success in areas outside of your core c-store... Yeah bodega channel. I mean, how material is that at this point? Are you willing to discuss, like, you know, is that like 10% of the 1,500-1,600 that you're doing? I mean, is it really material at this point? I don't know the exact number. I would say that it's greater than 10%, but I don't know the exact... I didn't come here prepared to, you know, to know from the sales recently, how many of them are outside of our traditional stores. I don't wanna give you an answer with you know, with definitively. Okay. On, apologies for the mundane question, but could you, Marcelo or Shmuel, could you help us understand sort of the seasonality in the NRS business? Like, will Q3 EBITDA margin always be lower than Q2? Is Q4 gonna be like Q1 and Q2? I mean, could you just sort of, I guess, directionally help us out, or do you think that this quarter was sort of an aberration in terms of the last couple quarters? I mean, I think two things happened. I mean, one is, you know, we had, you know, a relatively weak advertising quarter. You know, advertising is, you know, our highest, you know, margin, you know, contributor at NRS. That definitely, you know, hurt this quarter in particular. Yeah, I do think that there is some seasonality to the numbers. It's not, it's not dramatic, but there is some. Again, sometimes, you know, we, you know, we sell more accounts than, you know, come online. I think, you know, this particular quarter, you know, we had a very strong, you know, quarter in terms of, you know, merchant processing sales, but a lot of that actual volume probably doesn't come on until this quarter. You know, I think you'll see a much better number next quarter. Again, you know, our sales are increasing, so, you know, that will continue to be, you know, better and better. Great. I have to ask on the capital market side, it seems like things have calmed down a little bit, at least year to date. Is there anything we can be expecting in the near term on sort of net2phone or NRS monetization, or is that sort of a wait and see? For the time being, it's a wait and see. I mean, again, you know, we're continuing to, you know, make those businesses significantly more mature than they were, and hopefully at the right time, you know, great value will be achieved. All right, great. Thanks, guys. Thank you. The next question is from Brian Warner. Please announce your affiliation, then pose your question. Hi, guys, private investor. Actually, you David pretty much asked one of my questions, and that was really around the total available market. I'm wondering, just as an aside on that question, have you, do you view the restaurant area as a potentially large area? I'm wondering what progress and what you might call out as any areas that are particularly enticing in terms of what sort of the size of the market and where you think you can get good economics. Then just final question, NRS, you seem to be reporting monthly sales that are certainly low to mid-single digits, better than the industry, which seems to be recurring with a lot of frequency. I'm wondering if, what you think that is from, and, if that's sort of become a selling point for you guys, or if you think it's more of an anomalous thing? I'd say two or three things. I mean, first on the, you know, on the restaurant industry, POS world, I'll call it. I mean, we do not have any intentions of trying to become, you know, a Toast or, you know, or something like it. Like, that is not our goal at NRS. You know, we do have a goal of, you know, serving, you know, small restaurants, you know, that wouldn't be maybe the best, you know, fit for, you know, for a solution, you know, like Toast. As well as to, you know, serve, you know, convenience, you know, stores that sort of have, you know, restaurants in the back of their locations. Again, it's not something you see if you're in the New York, New Jersey area very often, but if you know, start getting, I'll call it, you know, Virginia and beyond, you'll start to see a lot of, you know, stores that have, you know, a restaurant component to it. And we definitely do intend to, you know, continue to serve that market, you know, better and better. We're, you know, in the process of making a small acquisition that hopefully will help us with that. As far as your question, you know, regarding, you know, sort of, you know, sales at our stores being better than, you know, than in the market generally. Listen, I don't know enough about, you know, same store sales everywhere else to know exactly how they compare, but it does seem to me like what you said is correct, just based on what I hear on the radio. What I would say is that... I mean, listen, I think our stores are very resilient. Some of that is, you know, from help they get from us. But other factors of it is the fact that, like, we've always felt that, you know, when people stop going to a grocery store, you know, and getting their orders, you know, delivered to their house, you know, that's a customer that grocery store really, you know, loses most of the time. Maybe they come in there, you know, one out of every three times they would have gone. They end up needing, you know, small stores, you know, like the ones that we serve even more often, because, you know, now they're, you know, depending on them for items that they didn't beforehand. I think that has something to do with it. You know, Marcelo also has, you know, some thoughts on it from speaking to people at NRS. Yeah, I mean, obviously, you know, we also look at the national data and compare to the NRS data, and we also kind of scratch our heads somehow a little bit. I think we also speculate that also our customers, they are going into these independent retail stores to buy a lot more of what their needs are, okay, basic needs type of goods. And therefore, you know, those are more recurring transactions for the necessities. Maybe that's also what's triggering why the growth is a little higher. Thanks very much. Appreciate it. No problem. Have a good day. The next question is from Adam Wilk. Please announce your affiliation, then pose your question. Hi, guys. This is Adam Wilk with Greystone Capital. Can you hear me? We can hear you well. How are you, Adam? Doing well, thanks. How about yourself? Thank God, better than I deserve. Good. I just had a few or maybe one question a couple questions wrapped up into one for net2phone. really strong results there once again, and I'm just wondering, I know there was a good amount of focus on this at the annual meeting, and I'm sure not much has changed, so, but I just wanted to touch on maybe the sources of operating leverage that you're seeing, if anything has changed over the last or year to date, I'll say. maybe you can talk a little bit about Bridgepointe. is there a channel partner, correct? maybe, you know, kind of what you're seeing in line with additional opportunities there in terms of channel partners and maybe the ability to drive more margin or leverage moving forward. Maybe one quick follow-up, but we can start with those. Okay. I mean, I don't think that much has changed since the, you know, the annual meeting in terms of our focus, you know, that we described for net2phone then quite thoroughly. I think that, you know, the team at net2phone has really, you know, executed very well. You know, and they've, you know, really, you know, made, you know, the cash flow generation, you know, a very big part of what they focus on. You know, at the same time, you know, they've really, you know, taken, you know, the bull by the horn and focusing, you know, on areas, you know, that, you know, we see, you know, massive growth, you know, coming down the line, whether or not that's, you know, AI that everyone is talking about or CCaaS products, you know, even for, you know, CCaaS for small, you know, customers, you know, have those kinds of needs as well. We have a product, you know, coming out specifically for them. I think that you're gonna see, you know, a, you know, we try to take some of the learnings that we've seen sort of also, you know, in other parts of the business. At NRS, like, we've been very good at, you know, selling into stores, you know, with a, with a very, you know, low price, you know, easy offering to, you know, take into the store. Then, you know, upselling them into higher plans and, you know, other services and funding, et cetera, et cetera, you know, that we provide. We're really trying to now do that same, you know, type of a sale, you know, at net2phone as well, where we, you know, come in there, you know, being, you know, we'll say, a relatively low-cost provider, you know, for their UCaaS services. You know, adding on all of these, you know, much higher tier, I'll call, you know, products, you know, and again, whether or not it's, you know, CCaaS or call intelligence or, you know, et cetera, et cetera. So that's kind of been, I would say, the only thing that's changed is maybe more of a focus on growing the base with more, you know, revenue rather than on just growing the number of customers. Now in terms of answering, you know, your question, you know, about, you know, our channel partner, you know, listen, we're a channel-faced, you know, business in net2phone. You know, as opposed to, you know, at NRS, where we have really a very diverse strategy of, you know, direct channel, you know, as well as through, you know, IBT sales people. At net2phone, it really is, with the exception of, you know, you know, Canada, it's really, you know, a channel of business. That's not changing, but, you know, when it comes to, you know, adding on, you know, revenue onto the, you know, onto these, to the customers, you know, some of that does become a direct, you know, sale, you know, from net2phone, depending on, you know, whether or not the channel partner feels, you know, I'll say, sufficiently, you know, trained, in being able to sell it. you know, some of our newer products really, you know, require, you know, different type of a sale than some of our channel partners traditionally have done. I mean, you know, UCaaS and CCaaS are not necessarily sold by the same people, if that would be a way to explain it easily. Adam, I think until the operational leverage, when we decided to postpone the net2phone spin up about 1 year ago, you know, and we mentioned at the time that the focus was going to be to turn around and demonstrate that net2phone can be a growing and profitable company. This past year, there was tremendous focus by the net2phone team on making the yield efficiencies, on trying to show that we're gonna be able to bring the company to be cash flow positive, and that really will start a new year, being cash flow positive, you know, even covering all the CapEx expenses, the same curve. Now that we have achieved that, our goal is achieved, that the focus, as Shmuel mentioned, is going to be more towards, you know, bringing to market, new products, seek out to play a bigger role as time goes by. It will help to drive outputs slightly higher, you know, as it become a bigger part of the mix. I think that's going to be the focus for this coming year. Now, the team right now working on the budget for this coming year, I think, you know, net2phone will continue to be now, a growing company, but also a cash flow generator, you know, in the next year. Okay. Yeah, that's really helpful, and I appreciate the comments on cash flow, which is interesting, just given the growth runway, and reinvestment potential, I think that sits in front of you. One quick question, just from your combined answers. Is the U.S., for you guys, who are kind of less on the enterprise side, is that more of a channel market for you, or is that more direct as you kind of increase your efforts there? Yeah, I mean, the U.S. have been almost, until recently, a channel business. We have very little direct sales. Most recently, we started a new group to sell directly to larger enterprises. You know, just started about a few months ago. We are gonna be adding more resources into that group as we go into this coming year. And that group has already brought in about one client with about 4,000 seats. Going forward, we're gonna have a direct group for, you know, trying to onboard larger enterprises. Okay, great. Then, just in terms of Mexico, there's... This may be jumping the gun, but there's a lot of talk about nearshoring opportunities or reshoring opportunities. I think just, I think there's a lot of bullish commentary just regarding the growth of that country in general in terms of the economy. I'm curious, as that takes place, does that sort of increase the opportunity set for you guys there, or has anything changed on that front for that specific geography? Is there anything to sort of share at this point? It's interesting. I mean, you know, Marcelo was sort of smiling as you were asking that question, because we were talking about it this morning. you know, again, I do think that that's gonna be, you know, a big, you know, area of growth. It has been already. Mm-hmm. I think it will continue to be even bigger. You know, the nearshoring definitely, you know, helps net2phone, there's no question about it, particularly when it's done in Mexico, although, you know, we are looking to extend to other, you know, I'll call them nearshore markets. Okay, great. I appreciate that. That's it for me. Thanks a lot. I appreciate it. Thank you. Have a nice night. We have a follow-up coming from Brian Warner. Brian, your line is live. Great. Hi, just a quick question. You guys seem to have pulled the rabbit out of the hat, so a lot of times with traditional communications and despite, you know, the obviously significant revenue headwinds, the EBITDA has held up remarkably well for what is generally viewed as, you know, a rapidly shrinking ice cube. I'm just wondering if there's any reason to think that you can't continue to milk that business for quite a few years, or if you think, you know, maybe over the next couple of years, there's anything to sort of watch out for that could sort of be a cliff in your cash flow there? A follow-up question, if you wanna be generous with a thought. I'm wondering where you think net2phone or for that matter, a well-run UCaaS company, at maturity, and you can define it or not, what sort of EBITDA margin do you think that business is? Is it 20%, or is it something significantly different than that in your mind? Just curious if you have a thought you might share. You know, again, we have a model on the net2phone business, you know, that, you know, shows, you know, something, you know, a little better than that, you know, over time. I mean, we're not getting there, you know, next year, that's for sure. Again, it will be better than that. As far as, you know, our traditional business, you know, listen, you know, we have to continue, you know, to make, you know, painful, you know, cuts, you know, to sustain the cash flow, you know, from that business, and that, you know, never fun. At the same time, you know, we need to continue to develop, you know, you know, features that, you know, keep our customers, you know, you know, willing to pay for, you know, our services when, you know, oftentimes they can get it, you know, free somewhere else. You know, that's a struggle that we, you know, deal with every day. You know, that, you know, you've seen the, you know, the reality in the numbers. You know, we can, you know, we do our best to continue it going as long as we can. Right. We do expect, now, as we look ahead for our long-distance voice revenues to continue to decline, most likely at the current pace, now, we don't see any turnaround in that trend. We actually, we're trying as hard as we can to manage the cost structure to try to alleviate the impact to the bottom line, but that becomes harder and harder as time goes by. I do expect, right, the gross profit, the EBITDA of, for long-distance voice to continue to decline, you know, at the same rate and maybe even an accelerated rate as time goes by. we hope to be able to offset some of that decline, with the stronger performance by IDT Digital Payments, you know, with our mobile top-up offerings and other digital offerings. Gotcha. Thank you so much. Appreciate it. Congratulations, you guys have done a great job. Yeah. Thanks. Have a nice night. If you have a question, please press star, then one. 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.