Idt Corporation · NYSE:IDT
Idt — Sidoti Small Cap Conference March 2024
42 slides from Idt's conference presentation, Mar 13, 2024
Slide 1: Investor Presentation
Investor lia Presentation NYSE:IDT — sidoti Small Cap Conference - March 13-14, 2024
Slide 2: Forward Looking Statements
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 meaning of the Pr
Slide 3: Businesses Built Around Common Strategic Assets
W) IDT | Businesses Built Around Common Strategic Assets High-Growth, High-Margin Cash Genera Business Segments Traditional Communications Segment NRS Segment: POS-platform oz solutions tailored for ea Mobile top-up and other independent retailers, oS! digital prepaid offerings advertisers & markete
Slide 4: IDT at a Glance
W) IDT | IDT at aGlance Newark, NJ 2,000 5 Public Company Headquarters Employees is “ Globally Spinoffs $1.2 BN $83 MM $178 MM TTM Revenue! TTM Adjusted EBITDA? Net Cash + Current Investments* [ Just initiated quarterly dividend of $0.05 per share |
Slide 5: Small-cap companies in the Russell 2000 aren't profitable
The problem is that about 40% of small-cap companies in the Russell 2000 aren’t profitable. The small-cap index is also a little overweight financials and overweight industrials, not terribly fast growers. It is underweight tech. David Kelly Chief Global Strategist at JP Morgan Asset Management DT
Slide 6: High-Growth, High-Margin Businesses
High-Growth High-Margin Businesses » io
Slide 7: National Retail Solutions (NRS)
National Retail Solutions (NRS) Our integrated cloud software and POS-based solutions enable independent retailers to operate more profitably The NRS platform also offers advertisers and consumer packaged goods marketers unprecedented reach and insight into urban markets
Slide 8: NRS: One Platform, Multiple Recurring Revenue Streams
| ce, NRS | One platform > Multiple Recurring Revenue‘ Streams $82 Million in Recurring High-Margin Revenue ™ Merchant Services Advertising & Data 53% of Revenue 36% of Revenue * Retailers subscribe to NRS Pay, a * Advertisers purchase static and payment processing solution for video ad impressions
Slide 9: NRS: Recurring Revenue Growth
| ae NRS | Recurring Revenue Growth Ca +30. Recurring Revenue (YoY) $50 - Recurring revenue $25 growth powered by increases in active | 3 $20 = terminals and NRS Pay S accounts rn = = o $15 = g & Average monthly 2» 0 recurring revenue per 5 terminal? reached & $5 $285 in 2Q24 $0 2Q23 3Q23 4Q23 1Q24
Slide 10: NRS: Rapid Network Expansion with Extensive Runway Ahead
| ce NRS | Rapid Network Expansion with Extensive Runway Ahead The Largest POS Platform Serving Convenience t Active POS Terminals Stores and Bodegas in the USA 5 Pos network - 28,700 active terminals at ~24,900 28 YoY independent retail stores® +ZO0x% > Early stages of penetration on core TAM of 20
Slide 11: NRS: Merchant Services - Featuring NRS Pay
oe NRS | Merchant Services - Featuring NRS Pay Merchant Services Revenue - Predominantly Credit Card & Other Electronic Payment Processing Merchant Services Revenue (in millions) gs $3 sn 2923 3023, 4023 1024 2024 [Bf Merchant services Revenue tm NRS Pay Accounts Quarters of fiscal years ended July
Slide 12: NRS: Advertising & Data - Offering Marketers Unparalleled Reach
| ce NRS | Advertising & Data - Offering Marketers Unparalleled Reach Advertising & Data Revenue America’s largest independent retailer-hosted ft A hi from FY20 to TTM (20241 advertising and transaction data network 6.5x ialeaia Su) ns) > Advertising . Ads are served on the NRS POS' customer-facing
Slide 13: NRS: SaaS Fee Revenue Growth Driven by Network Expansion
| ae NRS | SaaS Fee Revenue Growth Driven by Network Expansion Ca SaaS Fee Revenue Retailers pay monthly recurring +40, YoY charges (MRCs) for POS Services Retailers can select from several feature-rich software plans. Fees range from $19.95 to $69.95 per month En Revenue growth drivers: | so _| > »
Slide 14: NRS: Robust Scalability Powering Net Margin Expansion
J oe NRS | Robust Scalability Powering Net Margin Expansion Adjusted EBITDA Increasing profitability (in millions) 1 t fueled by growth of high £22. margin offerings Ea NRS’ Adjusted EBITDA margin? increased from 1% nei 7 in FY 2021 to 20% TTM 2020 2021 2022 2023 Jan. 31 Fiscal years ended July 3 a
Slide 15: net2phone
net2phone Our cloud-based, unified communications and contact center solutions help businesses succeed by interacting with their consumers with enhanced intelligence and insights Z primary geo markets
Slide 16: net2phone: Vast Market Opportunities
M@ net2phone | Vast Market Opportunities AGrowth Leader Pursuing Exceptional Market Opportunities Unified Communications as $70 a Service (UCaaS) Frost & Sullivan io! Global market opportunity with CAGR c¢ regards net2phone billion of 13.4% through 2028" as a leader in both innovation and growth,!°
Slide 17: net2phone: Compelling Offerings
MH net2phone | Compelling Offerings Key Features & Functionalities for Today’s Business Environment WM) unite |! uContact (UCaas) (CCaas) Combines voice, video, and messaging into a single interface, making communications seamless for in-office, remote, or hybrid work sé YW wee & Mobile App Video oo
Slide 18: net2phone: Strategic Differentiation
HM net2phone | Strategic Differentiation Offerings Differentiated by Market, Geography, and Channel © Market fi tat FocucienSrnalll arket fragmentation & Mid-Market —* Lower friction towards switching costs Distinctive Geography — + Focus on Americas Businesses * Tech focused on UX with Deeply Local
Slide 19: net2phone: Solid Growth with a CCaaS Lift
Mi net2phone | Solid Growth with a CCaas Lift Subscription Revenue "& Total Seats Served * 2Q24 YoY Growth Highlights a $21 400 2 a e a Subscription 3 Revenue E ms 3 8 8 z 3 g s 3 so 5 2 cas 5 2 2 =e 8 Revenue'> 2 35 0 a a 3 a $12 300 2028 3023 4023 1924 2024 Total seats served Quarters of fiscal ye
Slide 20: net2phone: Increasing EBITDA & Margins - Now Cash Flow Positive
net2phone Increasing EBITDA & Margins - Now Cash Flow Positive a fa Adjusted EBITDA (in $20 $18 $16 $14 $12 $1.0 $0.8 $0.6 $0.4 2923, Adjusted EBITDA and Net Margin % 3Q23 4Q23 Quarters of fiscal years ended July 3 1924 2024 10% 9% 8% M% 6% 5% 4% 3% 2% Net Margin % Achieved cash flow break-even for
Slide 21: net2phone: Margin Expansion
Mi net2phone | Margin Expansion Current Drivers = > > Higher ARPU CCaaS growth Operating leverage" - fixed SG&A as a % of revenue decreased from 72% in 2QI9 to 46% in 2Q24 Lower customer churn New Premium Plans and Add-Ons > Differentiated Plans - Feature sets incorporating advanced functionalities
Slide 22: BOSS Money
4 q is ee Bpread the ee ae ; BOSS MONEY. Our international remittance services enable customers in the U.S., and more recently in Canada and certain African markets, to send money to friends and family in over 50 destination countries BOSS Money's results are reported within IDT’s Fintech segment. T
Slide 23: BOSS: A Powerful & Synergistic Omni-Channel Platform
MI @& BOSS | A Powerful & Synergistic Omni-Channel Platform MONEY. Expansive Platform Presence > = $4billion of principal transferred TTM > Backed by nationwide marketing of the BOSS brand Retail Channel - Nationwide Footprint 43% YoY growth in 2Q24 retail channel remittances > > Strategic ‘gateway’
Slide 24: BOSS: Strategic Platform Expansion
MI @& BOSS | Strategic Platform Expansion BOSS Money Transactions Strategically Focused Growth Engine > Geography: Expanding origination beyond primary US to LATAM and Africa corridors + WN =J 3s Sy > — Growing retail agent network: ~1,700 active = retailers as of 2024 > Extensive payout network: Of
Slide 25: BOSS: Robust Omni Channel Revenue Growth
mS BOSS | Robust Omni Channel Revenue Growth MONEY. 2Q24 YoY Growth Highlights BOSS Money Revenue +42., Revenue Retail +45,, Revenue $l], Fone BOSS Money Revenue (in millions) 2023 3023 4023 1024 2024 Quarters of fiscal years ended July 31" IDT 25
Slide 26: Traditional Communications Segment
Traditional Communications Segment
Slide 27: Traditional Communications: Primary Businesses
___ a IDT PISITAL Cross-border value transfers through mobile-top-up and other digital prepaid offerings $401 MM TTM Revenue __ a @ BOSS REVOLUTION International calling serving ~3MM customers $291 MM TTM Revenue WH Traditional Communications | Primary Businesses __ a IDT Voice & SMS Services Termin
Slide 28: Traditional Communications: Robust, Long-Tailed Cash Generation
W§ Traditional Communications | Robust, Long-Tailed Cash Generation 7. $25 Adjusted EBITDA (in millions) $20 $I a $10 $ 8 $0 Traditional Communications Adjusted EBITDA i | Avg. Annual Decline Over Last 2 Years 3022 4022 1023, 2023 Quarters of fiscal years ended July 31" 323, 423 1924 2024 Generated
Slide 29: IDT Consolidated
IDT IDT Consolidated
Slide 30: IDT: Positioned for Additional Value Creation
BM !DT | Positioned for Additional Value Creation Consolidated Adjusted EBITDA 29. s%, $178 million in cash + current investments ($7.00 / share)* eI S Returning value to stockholders: e Stock buybacks ($11.2MM TTM) e $0.05 quarterly dividend Fiscal years ended July 3ist Consolidated Adj. EBITDA (in
Slide 31: Growth Segments Increasing Contributions to Profitability
IDT BH DT | Growth Segments!” Increasing Contributions to Profitability a Adjusted EBITDA Growth Total Adjusted EBITDA TTMvs. FY2020 Ea ss | Adjusted EBITDA Contribution TTMvs. FY2020 som segments” 2020 2021 2022 2023, Jan.31 TM Traditional + 9M Communications [)) consotidated adi. EBITDA [ilj NRSsn
Slide 32: The Bottom Line
WW DT | The Bottom Line Profitable with a track record of increasing cash-flow generation Three fast growing, high margin, tech driven businesses pursuing large market opportunities and Fortress balance sheet with no debt Commitment to returning value to shareholders through buybacks and dividends .
Slide 33: Thank You
Thank You invest@idt.net
Slide 34: Footnotes
Footnotes () (2) (3) TTM (Trailing Twelve Months) throughout this presentation refers to the period ended January 31, 2024. Throughout this presentation, Adjusted EBITDA is a Non-GAAP measure intended to provide useful information that supplements IDT's or the relevant segment's results in accordanc
Slide 35: Footnotes, continued
Footnotes, continued (9) Adjusted EBITDA margin is Adjusted EBITDA divided by revenue for the trailing twelve months ended January 31, 2024 compared to fiscal year 2021. (10) Frost & Sullivan. “Frost RadarTM: Unified Communications as a Service Market in Latin America and the Caribbean, 2022” (ll) F
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation
Slide 37: Non-GAAP Reconciliation
BW DT | Non-GAAP Reconciliation IDT's Adjusted EBITDA is a non-GAAP measure. Generally, a non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly com
Slide 38: Non-GAAP Reconciliation, continued
BM DT | Non-GAAP Reconciliation, continued Other operating (expense) gain, net, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA. Other operating (expense) gain, net includes, among other items, legal fees net of insurance claims related to S
Slide 39: Reconciling Income from Operations to Adjusted EBITDA for NRS
Reconciling Income from Operations to Adjusted EBITDA for NRS (USD in thousands) BH DT | FINANCIALS - Non-GAAP Reconciliation - Slide 14 FY 2020 FY 2021 FY 2022 FY 2023 TTM 2Q24 (Loss) income from operations (6,132) (252) 11,208 14,401 14,605 Depreciation and amortization 634 520 905 2,363 2,802 Sev
Slide 40: Reconciling Income from Operations to Adjusted EBITDA for net2phone
WW NDT | FINANCIALS - Non-GAAP Reconciliation - Slide 20 Reconciling (Loss) Income from Operations to Adjusted EBITDA for net2phone (USD in thousands) 2Q23 3Q23 4Q23 1Q24 2Q24 (Loss) income from operations (575) (377) (746) (7) 367 Depreciation and amortization 1,390 1,402 1,464 1,440 1,552 Severanc
Slide 41: Reconciling Income from Operations to Adjusted EBITDA for Traditional Communications
WH DT | FINANCIALS - Non-GAAP Reconciliation - Slide 28 Reconciling Income from Operations to Adjusted EBITDA for Traditional Communications (USD in thousands) T™ 3922 4Q22 1923 2923 3923 4923 1924 2924 2924 Income from operations 17,579 —-18,022.-«17,263~=«17,008 += 12,924 += 14,093 «15,406 = 14,61
Slide 42: Reconciling Income from Operations to Adjusted EBITDA for Reporting Segments
WH DT | FINANCIALS - Non-GAAP Reconciliation - Slide 30 & 31 Reconciling Income from Operations to Adjusted EBITDA for Reporting Segments (USD in thousands) Fy2020 FY2021 FY2022_FY2023 2924 Growth Segments (Loss) income from operations (13,683) (17,660) (6,811) 9,113 8,483 Depreciation and amortizat