Welcome to the IDT Corporation's third quarter fiscal 2025 earnings conference call. All participants are now in ultimate mode. A question-and-answer session will follow management's remarks. Anyone requiring operator assistance during the conference call should press star zero on your telephone keypad. Please note this conference call is being recorded. I will now turn the call over to Bill Ulrey of IDT Investor Relations. Bill, you may begin. Thank you, John. In today's presentation, IDT's Chief Executive Officer Shmuel Jonas and Chief Financial Officer Marcelo Fischer will discuss IDT's financial and operational results for the three-month period ended April 30th, 2025. After their remarks, they will be happy to take your questions. Any forward-looking statements made during this conference call, either in their remarks or in the Q&A that follows, 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 to non-GAAP measures, including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per share. Schedules provided in the IDT earnings release reconcile adjusted EBITDA, 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 the IDT Corporation website. The earnings release has also been filed on a Form 8-K with the SEC. Now, I'll turn the call over to Shmuel for his comments on the quarter's results. Thank you, Bill, and thank you, John, and Marcelo. IDT's third quarter was solid, with strong year-over-year gains while slightly softer than our second quarter, in part because of expected seasonal factors. Year-over-year revenue growth and continued expansion of each of our business segments' bottom-line results to over 133% year-over-year increase in consolidated income from operations, a 57% increase in consolidated adjusted EBITDA, and a 290% increase in EPS. At NRS, recurring revenue increased 23% year-over-year, powered by a 37% revenue increase from NRS's largest vertical, merchant services, and a 33% increase in SaaS fees, which more than offset a 12% decrease in advertising and data revenue. Income from operations and adjusted EBITDA were both up 29% year-over-year, and the business has generated a record $32 million in adjusted EBITDA over the past 12 months. Looking ahead, we continue to focus on developing new offerings that leverage the NRS platform to enable retailers to compete more effectively with large retail chains. For instance, independent neighborhood retailers have not yet meaningfully benefited from the consumer shift to online ordering and delivery. We are working to change that by integrating our network with online ordering and delivery platforms, enabling retailers on the NRS network to provide hyper-fast local delivery of sundries and prepared foods. The 100 or so retailers we have signed up so far are already receiving, in aggregate, over 2,000 delivery orders a week. BOSS Money, our remittance platform, increased transactions by 27% and revenue by 25%. The growth rates have been impacted by the deliberate shift we made last summer to prioritize gross profit per transaction in our retail channel rather than market share, and by a recent shift in customer preferences towards larger send amounts per remittance with fewer transactions. The fintech segment, which includes BOSS Money and early-stage fintech initiatives, generated over $5 million in adjusted EBITDA, compared to $244,000 in the year-ago quarter. Looking ahead, BOSS Money is working on initiatives to drive sustained long-term growth and innovations that reduce cross-border friction and increase profitability. Net2Phone continued its steady progress with balanced growth in the U.S., Brazil, and Mexico. The team has done a great job growing its business while holding the line on overhead. Net2Phone's adjusted EBITDA margins reached 15% in the third quarter of 2025. Net2Phone began to offer its AI agents this quarter, and customers are already seeing the benefits, including enhanced efficiency. Even as we deploy AI agents refined for specific market verticals, we're preparing to launch another AI-powered service, which we internally refer to as Coach. We think we'll be very successful. In our traditional communications segment, income from operations and adjusted EBITDA both jumped over 30% year-over-year to $17.3 million and $19.3 million, respectively, underscoring that this segment continues to be a long-term cash generator. At IDT, on a consolidated basis, we continue to scale our three primary growth businesses and their operating leverage in combination with the resilient contributions of our traditional communications businesses, are driving expansion, IDT's cash generation, and earnings. As we enter our budgeting season, we are fortunate to be in a great position to pursue the next generation of exciting growth initiatives. I want to wrap up by thanking the millions of customers who put some of their hard-earned dollars to work through our BOSS offerings and the business customers around the world who rely on us to enhance their businesses and communications. Our ability to provide these services depends on the dedication of our employees who have been executing and innovating on so many fronts, and our stockholders who entrust us with their capital. I am grateful for your continued patronage and support. Thank you. Thank you, Shmuel. My remarks on the third quarter's financial results will focus on the year-over-year comparisons in order to set aside seasonal impacts on our business. As Shmuel just mentioned in his remarks, our third quarter was slightly softer than our second quarter, and seasonality does factor in our results. For one thing, our fiscal third quarter has just 89 days in years like this one, roughly 3% fewer than the 92 days in our other fiscal quarters. In addition, our February through April fiscal third quarter is typically the lowest revenue quarter for NRS advertising, as advertising budgets spent by our customers trend higher over the course of the calendar year. Given that, we are extremely pleased with our consolidated financial performance in the third quarter. We again grew revenue year-over-year. Expansion of our fintech and SaaS businesses more than offsets the expected top-line decline of BOSS Revolution Calling. Gross profit increased 15% year-over-year, reflecting increased contributions from each of our four reporting segments, and was just under last quarter's record level. Our gross profit margin reached another record high of 37.1%. The robust year-over-year increases in our income from operations, adjusted EBITDA, and earnings resulted from the expanding operational leverage of our three high-growth businesses and from a positive contribution from our traditional communications segment. Traditional communications adjusted EBITDA margin for Q3 grew to 9.2% from 6.7% one year ago. NRS had solid third-quarter results. Merchant services revenue increased 37% year-over-year, and SaaS fees increased 33%, powering increases of 29% in both income from operations and adjusted EBITDA. NRS's financial results would have been even stronger had it not been for a few proactive steps we took during the quarter. Advertising and data revenue decreased $821,000, or 12% year-over-year, largely because of our decision to limit sales to one of our larger programmatic platform clients in order to manage our receivables exposure with them. Exclusive of sales to that partner, the underlying advertising business grew nicely compared to the year-ago quarter. We also decided, in an abundance of caution, to set up a bad debt expense provision of $1.4 million relating to amounts due from this client. Finally, IDT exercised its right to purchase certain deferred stock units from NRS employees during the third quarter. This was a win-win deal. It provided NRS employees with access to liquidity while enabling IDT to slightly increase its majority stake in NRS at an attractive valuation. The details of this exchange offer have been fully disclosed in our previously filed 8-K report. As part of this transaction, NRS incurred additional compensation costs of approximately $500,000 during Q3. At BOSS Money, remittance transactions reached another record, $6 million, with digital transactions through our BOSS Money and BOSS Revolution apps, again constituting more than 80% of our remittances. We did see a reduction in the rate of transaction growth, primarily because of our decision to optimize gross profit per transaction in our retail channel, but also because our customers are now spending more money per transaction while cutting back on the frequency of those transactions. While transactions and revenue increased 32% and 31%, respectively, digital send volume increased at an even higher rate, 40% year-over-year. Adjusted EBITDA margin for the fintech segment continued to expand during Q3 to 13%. As the remittance business continues to grow into scale and as we continue to improve operational efficiencies, we expect adjusted EBITDA margins for Boss Money, when considered as a standalone business, to reach 15%-20%, comparable to other industry players. Net2Phone continued on its steady growth trajectory, although foreign exchange translation once again matched the strength of the underlying performance of the business on a year-over-year basis. Subscription revenue increased 7% to $21.5 million in the quarter. However, on a cost-and-quality basis, the rate of increase was higher at 11%. Net2Phone continued to be disciplined in cost management and in customer acquisition spending. As they did last quarter, the Net2Phone team was able to decrease SG&A spend year-over-year again this quarter, even as its revenue continued to grow, thus enabling a 188% increase in income from operations to $1.4 million and a 50% increase in adjusted EBITDA to $3.2 million. At our traditional communications segment, gross profit increased 5% year-over-year, powered by IDT Digital Payments and supported by strong results from our IDT Global wholesale carrier business. SG&A expense decreased 9.5% year-over-year, or $2.2 million, as we continued to benefit from previously announced and ongoing cost reduction initiatives, and that helped drive a 39% increase in income from operations and a 30% increase in adjusted EBITDA. The strong growth and net margin results confirm our conviction that traditional communications will be a robust and resilient contributor to our long-term profitability. Our balance sheet saw a sequential lift in cash, cash equivalents, and current investments to $224 million from $171 million at January 31. This quite large $53 million increase is highly impacted by our BOSS Money weekly working capital cycle. On any given week, most of the weekly remittance volumes typically take place over the course of the weekend. In anticipation of this, ahead of each weekend, we must pre-fund the wallets of our disbursement payers, and we gradually recover the proceeds from the weekend's transactions at the beginning of the following week. As a result, for fiscal quarters ending on Thursdays, Fridays, and Mondays, we will typically show significantly less cash at quarter end than those ending on Tuesdays or Wednesdays. Such was the case with this quarter's April 30th quarter end that happened on a Wednesday, as compared to the previous quarter's January 31st quarter end that happened on a Friday. One final point on capital allocation this quarter: while IDT repurchased just a few thousand shares on the open market in Q3, the company did purchase 6 million of employee-owned shares that vested during the quarter in order to satisfy tax obligations triggered by the vest. I want to wrap up today's remarks by confirming our guidance for the full year fiscal 2025. Last quarter, I said that we expected to double our first half's $63 million adjusted EBITDA total for the full year to $126 million. Given our results to date, we remain fully on track to meeting that goal. We are now in the midst of our fiscal 2026 budgeting process, and I look forward to providing guidance for our next fiscal year during our fourth quarter earnings call in late September. Now, Operator, back to you for Q&A. The question-and-answer session will now begin. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Once again, please press star one if you have a question or a comment. First question comes from Iñigo Alonzo with Moram Capital. Please proceed. Hello, Shmuel. Hello, Marcelo. If I may, I would like to ask a question on each of the fast-growing businesses and another one in capital allocation. I'll start with NRS. Last quarter, you mentioned the additions of the salespeople. There are really interesting numbers in the report today. There is some one-end record terminal revenue when it comes to only the purely, purely the product, the terminal itself. And we also see that that happened despite a lower addition of net terminals. If you could provide more color on this item and the go-to-market strategy, how you are leveraging your agents versus the third-party distributors now that you have increased the staff, I would really appreciate that. I think to tell you that more effort was put on, you know, bringing, both new as well as existing retailers, that do not yet have our merchant processing to take it this quarter. That was definitely helped by many of the new salespeople that we brought on. Okay. Are you switching towards higher sales cost terminals, maybe kiosk, or how would you explain the increase over then the terminal additions? Also, if you can add more color on the NRS Pay accounts, that was the record number for Q3 too. Yeah. I mean, again, as I said, it's mostly related to, you know, just, you know, good sales. You know, it wasn't really anything particularly substantively interesting that I could tell you other than that, you know, all around, both from distributors, our existing sales base, as well as our new salespeople, you know, they all had strong numbers this past quarter. In terms of, you know, the other types of, I'll call it, form factors, you know, that we provide in the store, I don't think that those had a material impact this particular quarter. Okay. Let me move to Net2Phone. You launched the AI agent, and you are probably seeing the first customers on that end. I would like to know more about what type of customers you're seeing. Are those already Net2Phone customers, or you're getting customers outside of that, outside of those existing clients? Most of the customers right now are existing Net2Phone customers. There's a couple of exceptions to that rule, but we are trying to make sure that, you know, that it works perfectly for our existing customers. Then we will eventually add on, you know, outside parties as well. Can you provide some color on what type of businesses are purchasing these AI agents? We have really, I mean, all different types of customers, everything from, you know, call centers to doctors' offices to accounting firms to collection companies. There are a bunch of others. You know, again, we're making a bigger effort in the future to sort of, you know, verticalize it, you know, into some of those areas. You know, we believe accountants, you know, have a need for it. We believe that, you know, doctors' offices have a need for it and that, you know, we could build similar functionality for each of those ones. Same thing for call centers. We expect it to get a little bit more verticalized over the next, you know, year or so. You know, the sales are really starting to pick up quite a lot, and we're very excited about where it's gonna go. Is the focus going to be a small, medium enterprise? No, it's gonna be both. I mean, we have, you know, users who are, who obviously are going to be, you know, small businesses, and we have users that are, you know, talking about using, you know, millions of interactions a month. Wow. Okay. On BOSS Money, you started this quarter a beta program of the earnings program for the owners in the stores. I think you kicked it in some of your higher traffic stores in the southern part of the country. How did that go? How was the start of that program? I'm not honestly sure about the results of the program so far, so I don't feel comfortable commenting. Okay. And then on the last conference that you attended, you mentioned that M&A valuations are attractive. I saw that you recently acquired a really small company for NRS called Lichi or something like that. I'm not sure how it is pronounced. Would we expect any more transactions in the remaining of the year or more bigger transactions? No. Is this the one you were referring to in that conference? No, that was not the one I was referring to in that conference. I mean, you know, we are definitely, you know, looking at acquisitions. You know, we believe that you have to pay the right price, you know, to really extract the most value out of an acquisition. You know, we do not chase things at any price. If we think that there is good value to be created by having it inside of IDT, we definitely, you know, pursue it, and we are pursuing a couple of different acquisitions. What type of technology did this last acquisition bring to the table? If you're referring to the small one, Lichi, it's a restaurant technology company. Okay. One last one, if I may. Your stock price is slightly higher, and you have been repurchasing a lot. Would you still be keen to repurchase shares, or are you going to consider a one-off dividend in view that you are going to exceed the targets for the year, most likely? I would hand that question off to Marcelo. I mean, what I would say is that, you know, I think that, you know, it is definitely, you know, not as cheap as it was, you know, when we were buying back earlier. I still think it is a great value. You know, our capital allocation, you know, is also dependent on, you know, whether or not we are doing, you know, acquisitions or not doing acquisitions. You know, we will know more on that over, over hopefully the next quarter. Yeah. Hey, Shmuel, as you just mentioned, we believe that repurchasing our stock is a good way of allocating our capital, and we have been doing so. At the same time, we protect our cash to be able to deploy it towards growing the business, towards acquisitions. As Shmuel mentioned, the M&A environment right now is quite attractive, and we have been looking at a variety of opportunities in each one of our segments. To the extent that we decide to deploy that cash in ways to create a lot of value for our shareholders, we will deploy the cash towards growth and M&A. If not, we'll continue to repurchase stock. Yeah. One thing I can tell you for sure is we will not take on, you know, debt like some other companies do to take, you know, to buy back shares. Like, you know, we buy back shares with excess cash, not with borrowed cash. Really good. Thank you. The next question comes from William Vaughan with Corient. Please proceed. Hi, Shmuel, Marcelo. Thanks for taking my question, and also congrats on the quarter. Really good growth in NRS. It does look like the pace of POS terminal additions, payment processing accounts, merchant service revenue is slowing down a little bit. What would you diagnose as the cause of this? Is it economy, industry dynamics, competition? Just any comments that you have on just the slowing pace would be helpful. Yeah. I think I, I don't know if I would agree that it's a slowing pace. I mean, I think that the numbers might not have been, you know, quite as strong as, you know, we had hoped, as I sort of indicated in our release. But I think that the numbers are still very strong. And I actually, I mean, again, just from, you know, being closer to, like, what's happening, a lot of the accounts that we, you know, recently signed on, what I'll call is, like, the benefit that you're seeing from added accounts don't really hit us in the past quarter. They hit us in, you know, in future quarters. I mean, I expect the fact that we've been growing, you know, better than previously, actually, to help us more in, you know, current quarters as well as upcoming quarters after that. I don't actually think that it's slowing down at all. Okay. Thank you. That's good. A couple of follow-ups. Can you just describe how, you know, the food delivery, you know, the DoorDash and other services, how that actually works with the point-of-sale system? Is it, you know, something with the display where drivers can pick things up easier? I'm just trying to kind of walk through how it actually works. Yeah. It, it's a variety of different, you know, elements to it. You know, it's not a very simple product. But again, just because this is a call, I'm more than happy to have a, you know, have a call with you after the call to explain it in more detail. I mean, just because this is an earnings call, to give you a very brief description of it, basically, all the orders come into our order management system, and then those are placed into queue, you know, on the POS or in the kitchen. And then, you know, as things are being, you know, either worked on or filled, those notifications are then going back to, you know, the different delivery companies and/or somebody who's picking up an order saying, "Hey, your, you know, the order is ready," you know, or, "The order's in process," or etc., you know, then come and get it. I mean, also on the pricing side, it allows retailers, you know, to have different pricing, you know, for, you know, when you use delivery services or when you do not use delivery services. It allows them to, you know, price it higher, you know, in the afternoon hours when, you know, people might be less sensitive to pricing than in the morning when they're more sensitive to pricing. There are a lot of features and functionalities that it has that help, you know, get more orders. Thank you. That's helpful color. Just a question on BOSS Money. You know, the rate of growth is slow overall, but you had really good growth in the digital channel in terms of remittances. And you mentioned profit maximization in terms of improving profit per transaction. I was just wondering if those profit maximization efforts were really only on the retail side versus the digital side. Mm-hmm. Okay. So it's on both. It's on both. It's on both. I mean, what I would say is, listen, you know, there is a dynamic happening, and, you know, it's in our earnings release, and, you know, we're, you know, of where, you know, transactions are starting to become larger. So where somebody might have sent, let's say, four transactions a month previously, they're now sending three transactions a month. The amount per transaction has actually grown, you know, quite a lot, as we said, year over year. Like, our send volume is up 40%. Mm-hmm. If you had, you know, if that had been, oh, you know, in our call, standard size of transactions a year ago, that would have been 40% growth. Because it's being put into larger transactions, you know, I don't think that we completely optimized our pricing to sort of take into account that people are sending fewer transactions of larger volumes. You know, we are testing different pricing in different regions to, you know, to help, I'll call it, improve the profitability. You know, again, assuming that it doesn't, you know, hurt growth or retention in the markets that we're testing, it will, you know, we'll roll it out in all of our markets across the country. As far as, you know, new technologies, I mean, again, there are many different things that we're doing. I don't want to, as I said, this is an earnings call. I don't want to, you know, spend a lot of time talking about it, but, you know, everything from, you know, stablecoin transfers to wallet in-country, you know, that we'll be able to, you know, have a Visa card linked to so people can, you know, spend money in-country and make money on interchange. There, again, a variety of different things are being worked on that we think will, you know, both add to the profitability as well as really improve the user experience. Okay. Thanks, guys. Appreciate it. The next question comes from Alex Rohr with Emmett Investment Management. Please proceed. Hi, guys. On the, on the NRS ads business, now that that one partner has been turned off, what does the ads business look like on a runway business? Can you backfill that demand that was turned off, or are we just sort of be declining year on year for a little bit here? Thank you. I mean, again, it's too soon for us to give you, like, you know, a 100% answer to that question. I mean, I would say that we are definitely seeing, you know, better numbers so far this quarter than, you know, we did last quarter. You know, our, I'll call it our other ad partners are making up, you know, quite a fair share of it. It hasn't quite, you know, filled the total gap yet, but I'm hoping that, you know, before quarter's end, you know, we will have filled it back up. At the same time, we're also, you know, expanding our direct ad team, but I think Marcelo wants to say something. I apologize. Yeah. Hi, Alex. How are you? No, just to correct, we have not completely shut down the programmatic partner. Okay? We have just deliberately reduced significantly the amount of sales we do to them because of the current situation. Now, that partner was a very large partner. A year ago, probably represented more than 20% of our total advertising revenue. Currently, it represents probably about 5%. Now, a much, much, much smaller number. The fact that the advertising revenues, excluding that partner, have been growing quite nicely, about 10% or so for all the other programmatic partners, we are almost there about being able to completely cover for that decline on that one partner by the growth in the other relationships. Thank you. Mm-hmm. Okay. We have a follow-up coming from William Vaughan with Corient. Please proceed. Hello, again. Just had a follow-up on, on Net2Phone. Where do you guys think that the EBITDA margins on that business can get to over time, like, in terms of a mature, steady state? You know, it is not a simple question to answer, because, you know, again, we have a lot of new initiatives, you know, particularly, you know, with AI agents and our Coach product that, you know, should be launching this quarter. You know, those have, you know, we do not have a history, I will say, of running those programs to sort of know, you know, where exactly the margins are gonna shake out. My own personal opinion is that they should, you know, be accretive by, you know, a substantial amount, but it might take, you know, a year or two because there is, you know, a lot of, you know, costs in setting up those programs that do not necessarily, you know, I will say, hit the bottom line in a positive way. You know, even though we charge for implementation, we charge a very, very low price for implementation. If you were to go and get, you know, IT help at Best Buy, it might cost more money than what we charge for AI help. Essentially speaking, we are subsidizing the launch of the product by lowering the cost of implementing it for our customers. That will, over time, probably increase in price once we have more scale. At the same time, once the customers have been implemented, the usage will hopefully go up quite substantially, and that will obviously add to our margins over time. I know that's not a very quick answer to your question, but that's more color. Awesome. Thanks. Just another one circling back to BOSS Money. I know that, you know, we're focused on profitable growth, and we always want it to be profitable. I do want to know your thoughts on, you know, with the digital channel, and it is a scaled business, so profitability increases as you get more users and customers. What are your thoughts on actually increasing investment just to get more customers? You know, just thinking about the landscape of how there's a lot of white space with these legacy players that are mostly retail, like Western Union and others. Is this a lot of customers to grab there? Yeah. I mean, I think that's a very fair. Yeah. I think it's a very fair point. Again, you know, it's budget season, and we are definitely, you know, looking at our unit economics, our cost of acquisition, all the types of fun things that you get to try to figure out the season. What I would say is that, like, you know, if we don't make any acquisitions in any of these businesses, we will definitely grow organically at a much faster pace by investing more in acquisitions. And sometimes I have to say that, you know, even though it is a slower and, we'll call it, harder grind, I actually think that sometimes it is better to grow things organically than do acquisitions, because acquisitions are always going to have things that go wrong as opposed to when you are doing it yourself, you kind of know what you are comfortable with and how to do it. Yeah, I mean, it is budget season, and I would say that is definitely going to be part of our plan into next year. Just to go back a little bit on your comment about net margin growth for Net2Phone, I think it's just important to bear in mind as you do your models that, for the past few years, we have been investing roughly about $20 million-$25 million each year, in customer acquisitions for Net2Phone. Most likely, again, it's budget season, but most likely we will continue to deploy those types of dollars as long as the IRRs for every one of our markets continue to be very attractive. As we continue to grow with that type of investment, we have seen over the past few quarters how rigid we are in terms of maintaining our fixed cost, you know, in steady state. The business really scales nicely as it continues to grow. A few other things to bear in mind is that as the mix of UCaaS and CCaaS continues to change, that could affect the operating margins as CCaaS customers and CCaaS businesses operate at much higher margin than do our UCaaS businesses. Finally, as we hope to introduce and launch and grow AI agents and other AI initiatives, all of those things could make a big difference in terms of account output growth, that could lead, again, you know, to enhancing the growth in the net margin. Yeah. I mean, I'll just add one last thing to what Marcelo already said, which is, like, I think we're much more focused, you know, on, on Net2Phone going forward on, you know, revenue and gross profit and, and bottom line profitability than we are on, you know, seat growth and, and what have you. It's, and even though you need both to, you know, to get those results, like, it's a change in mindset, and I think that it will be, you know, it will be reflected positively, you know, in the business over the next year. Awesome. Thank you, gentlemen. Appreciate all the cover answering my questions. 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.