Idt Corporation · NYSE:IDT
Idt — Investor Day (February 2019)
68 slides from Idt's investor day presentation, Feb 5, 2019
Slide 1: IDT Corporation Investor Day Featuring net2phone
Oo IDT IDT Corporation Investor Day Featuring net2phone February 5, 2019 New York Stock Exchange Siebert Hall
Slide 2: Safe Harbor
Safe Harbor All statements in this presentation that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate, “target” and similar expressions, are forward-looking statements within the meani
Slide 3: Program
Progra ae 9:00 am to 10:30 am eoeee Howard Jonas, Chairman | Value Creation Shmuel Jonas, CEO | Transformation Bill Pereira, President and COO | Core Jonah Fink, President @ net2phone | net2phone Marcelo Fischer, CFO | Financials 10:30 am to 11:00 am Shmuel Jonas Bill Pereira Jonah Fink Marcelo Fisc
Slide 4: Founded 1990 by Howard Jonas; spin-offs and divestitures
VOT | OV Ie nue 1990 Founded by Howard Jonas Spin-Offs & Divestitures IDT Investor Day | + |
Slide 5: Spin-Offs & Divestitures
Spin-Offs & Divestitu res RAFAEL Holdings, Inc ZEDGE” Teeyeurpiee EE 2016 2014
Slide 6: Value Creation
Value Creation Howard Jonas Chairman
Slide 7: A History of Value Creation
A History of Value Creatiom nun $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Jan 10 Jann Jan 12 Jan 13 Jan15 Jan 16 Jani7 Jan 18 Jan 19 Hl sap 500 Hl 07 + Spincos NET niece > |
Slide 8: Management Team
Management Team Shmuel Jonas Chief Executive Officer Bill Pereira Marcelo Fischer Chief Operating Officer Chief Financial Officer IDT Investor Day |e |
Slide 9: Transformation
Transformation Shmuel Jonas CEO
Slide 10: Core - Synergistic Assets
Core - Synergistic Assets Leveraging Core Assets Across the Enterprise : Proven brands - BOSS | { Revolution & net2phone F ? e 35,000 retailers serviced ® Global infrastructure an eed ‘ss by our direct sales force 8M + retail customers IDT Investor Day | w |
Slide 11: Core | Innovation
Core | Innovation Transforming Minute-Driven Offerings into Value Added Services BOSS Revolution a C$). Calling “ oN From calling cards to an app-centric voice and payments hub Mobile Top-Up From minute transfers to bundles of voice, text and data Carrier Services From minute termination to managed
Slide 12: Initiative - BOSS Revolution Money Transfer
Initiative - BOSS Revolution Money Transfer Crypto back-end 45 destination 326,000 payout settlement countries locations The Transformative Power of Direct-to-Consumer 2.7M E D2c : ET 2 1.7M increase CY 2016 CY 2017 CY 2018 2017 to 2018 BOSS REVOLUTION PMONEY OB Web + App Transactions BB Retailer Tr
Slide 13: Initiative - National Retail Solutions
Initiative - National Retail Solutions POS Network to Transform Independent Retail Powerfully enhances retailer competitiveness: @ : ; : : =\ e can hagreetconneeesssvnseveos dM EPEET _ Multiple revenue streams : x SN HZ 7 oes ee arge addressable market SAo 975 ul as ee. 25M monthly transactions IDT
Slide 14: Initiative - BOSS Revolution Mobile
Initiative - BOSS Revolution Mobile Revolutionary Pricing! Pay only for what you use Never more than BOSS Wisin a 4. A 4 REVOLUTION
Slide 15: UCaaS Initiative with Proprietary Platform
UCaaS Initiative with Proprietary Platform © Qe . Disruptive VoIP Pioneer Management Team La : : oamtiee f—— “net2phone Opportunity | Positioned for Strong Market and Financial Performance oe p Global Growth Leveraging Hitting Key IDT Infrastructure Benchmarks IDT Investor Day | |
Slide 16: Core
Core Bill Pereira coo
Slide 17: Core | Predictable Revenue and Cash Flow
Core | Predictable Revenue and 260 (cnet a $2,000 $60 $50 $1,500 $40 $1,000 $20 Cash flow in millions $500 Core revenue in millions $10 Fy 2015 FY 2016 FY 2017 FY 2018 | | BOSS Revolution Calling | | Wholesale Carrier | | Mobile Top-Up Other (lm: Core Cash Flow IDT Investor Day |» |
Slide 18: Core | BOSS Revolution Calling
Sore | BUSS Bevo Uuan Callie $521M ' . Revenue (TTM) 6 M+ customers / year 35,000 retailers App User Growth Driving Business 1,500 () 1,000 : a - o Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Thousands IDT Investor Day | |
Slide 19: Data Demand Driving Growth
Se a ee eet. Data Demand Driving Growth $300.0 $250.0 $200.0 Millions $150.0 $100.0 $50.0 CY 2014 cy 2015 CY 2016 CY 2017 cy 2018 eesereemvereeeraneeenteeemeererens : || Voice Top-Up Revenue i | Bundles Revenue IDT Investor Day |» |
Slide 20: Core | Wholesale Carrier Services
Core | Wholesale Carrier Services Leveraging our Global Scale Vodaphone Tata Retail 1 Orange Communications BICS Airtel IDT Telefonica Carrier i KPN/iBasis Services ‘ Telecom Italia Deutsche Telekom Verizon ut °o N ° g a ° Total Minutes of Top International Carriers (Billions) IDT Investor Day | 2 |
Slide 21: Core | Transforming Retail & Wholesale Economics
Core | Transforming Retail & Wholesale Economics . lil . TIL : TU TL -10% l -15% Dec16 Mar17 Juni7 Septl7 Decl7 Maris YoY change in minutes. before subscription plans YoY change in minutes after subscription plans Junig Septli8 Deci8 Retail Subscription Plans $10 Unlimited day $12 $50 100 mins 200 m
Slide 22: Core | Innovation
Core | Innovation Transforming minute-driven offerings with value added services Boss . Fi F * . Carrier Services Mobile Top-Up Revolution Calling Pinless calling to app and Minute termination to Minute transfers to bundled subscription plans managed ILD solution voice, text and data N/ = . eocc) @
Slide 23: Jonah Fink, President net2phone
Jonah Fink, President net phone
Slide 24: UCaaS in a Nutshell
UCaaS in a Nutshell net phone : e ( net2phone
Slide 25: $46 Billion Market
ee $46 Billions = — 2 Marke eg e022
Slide 26: Competitive Opportunity
net phone Competitive Opportunity net2phone is Uniquely and Strategically Positioned to wroone eng © eon Become a Leader in the a — Global Market for Unified Communications as a Service (UCaaS) Google @ @ Verizon ABILITY TO EXECUTE §=5 ——> © Gartner, Inc
Slide 27: How We Win
How We Win net phone net2phone Solution net2phone Technology Go To Market Strategy * Management Team
Slide 28: The net2phone Solution
The net2phone Solution
Slide 29: Converged Communications Across Channels and Devices
Eas) Analytics 2 Converged Communications Across Channels and Devices fsa, . ( @ ) Full Featured Desk Phone (O) Mobile App \~]
Slide 30: The Solution - Feature Rich
The Solution - Feature Rich net phone Ey SMS/MMS Send and receive text and multimedia messages from _ your business phone number. Mobile App Call and text from your business number from anywhere. WebRTC Make and receive calls right from your laptop, with no additional hardware. Voicemail to Email Li
Slide 31: Slide 31
Slide 32: Marcus Johnston
Marcus Johnston y 00:12
Slide 33: The Solution - Live Chat
The Solution - Live Chat net phone ase COLLECT = Convenient Customers can chat in real time with company reps through their website Untethered Customers can move conversation from web to mobile any time
Slide 34: The Solution - Rich Client Analytics
The Solution - Rich Client Analytics net phone Dashboard . == USAGE activity NEW MESSAGES NEWVOICEMAILS or. O oo 289 17 ian e = UNITE NUMBERS e featy 2 eon. ‘Ready = e seoty sesty WELCOME MENU ety orton pion DEPARTMENTS ce coptons Ov He wo = Ox me orton © crreme sues cm Option Real Time Knowledge Mo
Slide 35: The net2phone Technology
The net2phone Technology
Slide 36: Deep VoIP Expertise; Agile Development Philosophy
* Deep VoIP Expertise * Agile Development Philosophy va) 4 00 2 [e) Cc < VU wo kK = 00 fe} vy fae) — y WY je, (e) Cc (e) 2 _ =) oO 1S) <x e
Slide 37: Leveraging IDT's Global Technology Assets
Leveraging IDT's Global Technology Assets Eliminates License Fees Full Control of Our Roadmap
Slide 38: Technology - Timeline
Technology - Timeline net phone @& Launched ye Acquired Hosted PBX Versature oS 2015 | 2016 Launched SIP Acquired net2phone Trunking LiveNinja Proprietary Platform Over 150,000 seats by end of cY 2019
Slide 39: Go To Market
Go To Market
Slide 40: Streamlined Offer
Streamlined Offer Global Multi-Channel SMB and Mid-Market
Slide 41: Go to Market - Streamlined Offer
Go to Market - Streamlined Offer net phone e Simple Packaging “Unique UCaaS Bundle” e All-in-One Base Solution Pricing t , e Subscription Based +--+ ee “ ” ——o Good-Bye CAPEX ry ” ~ Se eee " = e Multi-Year Contracts / a ~™
Slide 42: Go to Market - Global Day
Go to Market - Global Day 1 net phone An International Presence for an International Workforce
Slide 43: Go to Market - Global Opportunity
Go to Market - Global Opportunity net phone Over 50% of our Revenue / Customer Base Comes from the Global Marketplace e High Degree of Market Fragmentation with No Clear Leaders ‘ ‘af e Lower Rates of UCaaS Penetration e Earlier in Tech Demand Cycle _ e Lower Customer Acquisition Cost e Higher Margi
Slide 44: Go to Market - Global Presence
Go to Market - Global Presence net phone North America wi Asia USA ‘ j Hong Kong Canada Mexico South America Argentina Brazil Colombia Europe Spain
Slide 45: Go to Market - Multi-Channel Approach
Go to Market - Multi-Channel Approach net phone f a DIRECT |: *
Slide 46: Go to Market - Indirect Channel
Go to Market - Indirect Channel net phone — , Sv sol dite 55,000 = / SANDLER _ Seats P= parca 40 \ ey F TELARUS CMtanagers ® i i)
Slide 47: Go to Market - Direct Channel
Go to Market - Direct Channel net phone ey sain Ov we VERSATURE wo 5 ()/ 23 ee , Direct Sales = Members ¢ rg
Slide 48: Our New Platform
Our New Platform Expands Opportunity to Higher Value Markets Counts
Slide 49: Go to Market - Seeing Is Believing
Go to Market - Seeing Is Believing net phone a Best @) Allstate HATHAWAY Western. Sy han > i 4 omeServices earning. UNDER ARMOUR & The Tanera QAshley "HOB OuidDioxp ye BREAD® HOMESTORE LZ Company Os ) XY ©@ sovomoscxoor” CENTER | Sang A =. Edible . Ogilvy & Mather
Slide 50: KPIs
KPIs
Slide 51: KPIs
KPls net phone Subscription Revenue Gap GED Organic wiCanada e * Subscriber Revenue 25,000,000 20,000,000 15,000,000 73.2% 3yr Organic CAGR —= =D 10,000,000 5,000,000 | Latin America 1 cot a Account ARPU oe ee 16,000 350 14,000 x00 12,000. - 10,000 _ 96.4% 3yr Organic CAGR 250 8,000 200 6,000 150 4,
Slide 52: Management Team
Management Team
Slide 53: Jonah Fink, President
Jonah Fink, President Chief Revenue Officer - passionately building new revenue streams Emilio Cueto, Dir. of Engineering Over 10 years founding successful companies, products, and software development teams. Zali Ritholtz, COO Led product development, launch and management of net2phone’s UCaas offe
Slide 54: Thank You
Thank You
Slide 55: Financials
Financials Marcelo Fischer CFO
Slide 56: IDT's Business Portfolio
IDT’s Business Portfolio Investment Initiatives Core Businesses & Corporate Overhead IDT Investor Day ss |
Slide 57: Core Business & Corporate Overhead
Core Business & Corporate Overhead {Sin millions) Non-GAAP duly 3 Fiscal ear End | Fiscal 2077 Revenue $1,477.2 $1,511.8 $351.4 $1,405.5 Direct Costs 1262.7 1289.0 300.2 1200.9 Revenue less Direct Costs 214.5 222.8 $1.2 204.6 Revenue less Direct Costs % 14.5% 14.7% 14.6% 14.6% SG&A 1601 159.5 38.4 1
Slide 58: Value Components - Core & Corporate Overhead
Value Components - Core & Corporate Overhead $in millions I DT Non-GAAP July 31 Fiscal Year End $44.8 @ Available NOLs in excess of $100M @ Nodebt @ Efficient working capital business model Fiscal 2017 Fiscal 2018 Fiscal Q119 Annualized Stable Adjusted Operating Cash Flow in mid-$40M range IDT Inves
Slide 59: net2phone | UCaaS model
net2phone | UCaaS model (Sin millions) Non-GAAP July 31 Fiscal Year End Ce | Fiscal 2020 JM Fiscal 2021 | 3 Year CAGR Subscription Revenue $44.9 $76.8 -_ 6 Subscription Revenue % chg na 92.6% 71.1% 61.1% Variable Subscription Costs 13.1 22.6 35.3 525 59% Operating Overhead 43 48 61 7s 20% Operating
Slide 60: Value Components - net2phone
Value Com ponents - net2phon $in millions Non-GAAP July 31 Fiscal Year End Fiscal 2017 Fiscal 2018 Fiscal 2019 Projected e Strong subscription growth rate e FYI9E revenues of $23MM e UCaaS IDT 2019E Subscription 2017 to 2019E Revenue Subscription Multiple Revenue CAGR Twilio 14.5x] 46.655 Ring Centr
Slide 61: Value Components - Other Investment Initiatives
Value Components - Other Investment Initiatives. $ in millions Non-GAAP July 31 Fiscal Year End $25.0 i Revenue Ml Gross Margin % $20.0 $15.0 $10.0 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 : SB IDT REVOLUTION =” Bers pamonat 50% 30% 20% 10% 0% IDT Investor Day | «| Fiscal 1Q18 Fiscal 1Q19
Slide 62: Q&A
Emilio Cueto Bill Pereira Marcelo Fischer Q&A Shmuel Jonas Zall Ritholtz Jonah Fink Dano Ybarra IDT Investor Day | = |
Slide 63: Non-GAAP Reconciliations
Non-GAAP Reconciliations IDT Investor Day
Slide 64: Non-GAAP Reconciliation
Non-GAAP Reconciliation Iain dss ran resus tat are eteminein accordance wih eal cepted acouing pines inte United Sts Aneric GAP OTs ives prestrnion ain usted EBTOA aud Opeaing Cash Fw ard ‘Adjusted Free Cash Flow, which are non-GAAP measures. Generally, a non-GAAP financial measure is a numerical me
Slide 65: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation Reconciling Adjusted Free Cash Flow to Statement of Cash Flows Data After adoption of ASU 2016-18 QI Fiscal 2019 (in thousands) Core Businesses + Corporate Investment Overhead Initiatives Consolidated IDT Adjusted Free Cash Flow 8,366 6,964 1,402 Capit
Slide 66: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation Reconciling Adjusted Free Cash Flow to Statement of Cash Flows Data After adoption of ASU 2016-18 Fiscal 2018 {in thousands) Core Businesses + Investment Corporate Overhead Initiatives All Other Consolidated IDT Adjusted Free Cash Flow 26,126 (27,769)
Slide 67: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation Reconciling Adjusted Free Cash Flow to Statement of Cash Flows Data After adoption of ASU 2016-18 Fiscal 2017 {in thousands} Core Businesses + Corporate Investment Overhead Initiatives All Other Consolidated IDT Adjusted Free Cash Flow 26,955 (21,584)
Slide 68: Thank You
ea Ky IDT THANK YOU ov EL