NRS added a record number of net retail terminals and payment processing accounts during 4Q23
net2phone increased seats served by 21% and subscription revenue by 19% YoY in 4Q23
BOSS Money increased transactions by 42% driving a 36% YoY revenue increase in 4Q23
NEWARK, NJ, Oct. 12, 2023 (GLOBE NEWSWIRE) -- IDT Corporation (: IDT), a global provider of fintech, cloud communications, and traditional communications services, today reported results for the fourth quarter and full fiscal year 2023, the three and twelve months ended July 31, 2023.
HIGHLIGHTS
(Throughout this release, unless otherwise noted, results for the fourth quarter of fiscal year 2023 (4Q23) are compared to the fourth quarter of fiscal year 2022 (4Q22) and results for FY2023 are compared to FY2022. All earnings per share (EPS) and other ‘per share’ results are per diluted share.)
- National Retail Solutions (NRS) added over 1,700 net active point-of-sale (POS) terminals during 4Q23 and over 6,300 during FY2023 to reach approximately 25,700 as of July 31st. Recurring revenue* increased 6% in 4Q23 to $18.8 million led by a 79% increase in merchant services revenue. FY2023 recurring revenue increased 58% to $71.4 million;
- net2phone added approximately 12,000 net seats served during 4Q23 and 61,000 during FY2023 to reach approximately 352,000 as of July 31st. Subscription revenue* increased 19% in 4Q23 to $17.9 million. FY2023 subscription revenue increased 25% to $66.8 million;
- BOSS Money remittance volume increased by 42% to 3.79 million transactions during 4Q23 while revenue increased 36% to $22.3 million led by a 46% increase in retail channel revenue. FY2023 BOSS Money revenue increased 38% to $76.9 million;
- Consolidated revenue decreased 8% in 4Q23 to $304 million while consolidated direct cost of revenue decreased 11% to $211 million. FY2023 consolidated revenue decreased 9% to $1,239 million while the consolidated direct cost of revenue decreased 15% to $876 million;
- Consolidated income from operations decreased 38% in 4Q23 to $12.0 million. FY2023 consolidated income from operations increased 1% to $60.7 million;
- Net income attributable to IDT decreased 54% in 4Q23 to $8.0 million. FY2023 net income attributable to IDT increased 50% to $40.5 million;
- Consolidated Adjusted EBITDA** decreased 25% in 4Q23 to $18.1 million. FY2023 consolidated Adjusted EBITDA increased 9% to $86.2 million;
- EPS decreased to $0.31 in 4Q23 from $0.66 and Non-GAAP EPS** decreased to $0.36 from $0.67. FY2023 EPS increased to $1.58 from $1.03, and Non-GAAP EPS increased to $1.86 from $1.12;
- During 4Q23, IDT accelerated its stock repurchases, buying back 231,416 shares of its Class B common stock in market transactions for $5.6 million. During FY2023, IDT repurchased 511,546 Class B shares for $13.1 million. During 1Q24 through October 11th, IDT had repurchased 124,530 shares of Class B common stock for an aggregate purchase price of $2.8 million.
*See ‘Explanation of Key Performance Metrics’ at the end of this release.
**Adjusted EBITDA and Non-GAAP EPS are Non-GAAP financial measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measures later in this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measures.
REMARKS BY SHMUEL JONAS, CEO
“Our results this quarter were highlighted by the continued expansion of our three high-growth, high-margin businesses, while our Traditional Communications segment performed as expected.
“At NRS, we have ramped up our investment to accelerate the growth of the NRS terminal and payment networks, and we delivered record quarterly increases in both net new terminals and net new NRS Pay accounts. With that tailwind, Merchant Services Q4 revenue increased 79% year-over-year. Advertising & Data revenue, while 40% below the year-ago peak, improved sequentially. Advertising & Data revenue increased 7% from the prior quarter and is on track for a larger sequential increase in the current quarter. NRS’ results also reflected our investment in growth initiatives, including the development of new features and functionalities that will help us expand our target market to new verticals within the independent retailer market during the coming year.
“At net2phone, subscription revenue increased 19% year over year, powered by the increase in seats served and an increase in average subscription revenue per seat in Latin America. Here too we are investing in initiatives to expand the business. In the coming quarters, we are preparing to roll out two exciting premium services – net2phone AI and Call Center Essentials – that we expect to enhance ARPU and margins across our markets.
“Within our Fintech segment, BOSS Money, our international remittance business, continued to benefit from the synergies between its retail and direct-to-consumer channels, and from our cross-marketing programs within the larger BOSS ecosystem. Also in our Fintech segment, we’ve begun enrolling customers in our new mobile banking app, Elroy. Elroy is replete with innovative features to help underbanked and unbanked customers integrate into the U.S. financial mainstream while appealing to anyone who despises bank fees but appreciates financial convenience, saving money, and earning interest.
“Within our Traditional Communications segment, we are working to further streamline the operations of our BOSS Revolution Calling and IDT Global businesses while pushing new initiatives to return our IDT Digital Payments business to growth.”
RESULTS BY SEGMENT
| Fiscal Quarters | NRS | net2phone | Fintech | Traditional Communications | ||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | 4Q23 | 3Q23 | 4Q22 | 4Q23 | 3Q23 | 4Q22 | 4Q23 | 3Q23 | 4Q22 | 4Q23 | 3Q23 | 4Q22 | ||||||||||||||||||||||||||||||||||||
| Revenue | $ | 19.9 | $ | 18.1 | $ | 19.2 | $ | 19.3 | $ | 18.4 | $ | 16.2 | $ | 24.6 | $ | 21.8 | $ | 18.5 | $ | 240.0 | $ | 241.0 | $ | 274.6 | ||||||||||||||||||||||||
| Direct cost of revenue | $ | 2.1 | $ | 2.6 | $ | 2.7 | $ | 3.1 | $ | 3.0 | $ | 2.5 | $ | 11.0 | $ | 9.2 | $ | 7.4 | $ | 195.2 | $ | 195.4 | $ | 225.3 | ||||||||||||||||||||||||
| SG&A expense | $ | 15.4 | $ | 12.8 | $ | 9.5 | $ | 15.2 | $ | 14.4 | $ | 14.0 | $ | 14.8 | $ | 13.2 | $ | 12.5 | $ | 26.3 | $ | 26.0 | $ | 28.9 | ||||||||||||||||||||||||
| Income (loss) from operations | $ | 1.7 | $ | 2.1 | $ | 6.7 | $ | (0.7 | ) | $ | (0.4 | ) | $ | (1.8 | ) | $ | (1.9 | ) | $ | (1.3 | ) | $ | (1.9 | ) | $ | 14.1 | $ | 12.9 | $ | 18.0 | ||||||||||||||||||
| Adjusted EBITDA | $ | 2.4 | $ | 2.7 | $ | 7.1 | $ | 0.9 | $ | 1.0 | $ | (0.4 | ) | $ | (1.2 | ) | $ | (0.6 | ) | $ | (1.3 | ) | $ | 18.6 | $ | 19.7 | $ | 20.5 | ||||||||||||||||||||
| Fiscal Years | NRS | net2phone | Fintech | Traditional Communications | ||||||||||||||||||||||||||||
| (In millions) | FY2023 | FY2022 | FY2023 | FY2022 | FY2023 | FY2022 | FY2023 | FY2022 | ||||||||||||||||||||||||
| Revenue | $ | 77.1 | $ | 51.3 | $ | 72.4 | $ | 58.2 | $ | 86.6 | $ | 64.6 | $ | 1,002.7 | $ | 1,190.0 | ||||||||||||||||
| Direct cost of revenue | $ | 8.9 | $ | 7.1 | $ | 12.0 | $ | 10.1 | $ | 36.5 | $ | 26.1 | $ | 818.3 | $ | 991.2 | ||||||||||||||||
| SG&A expense | $ | 51.4 | $ | 32.1 | $ | 57.3 | $ | 54.2 | $ | 51.9 | $ | 43.1 | $ | 107.0 | $ | 113.3 | ||||||||||||||||
| Income (loss) from operations | $ | 14.4 | $ | 11.2 | $ | (2.8 | ) | $ | (11.1 | ) | $ | (2.5 | ) | $ | (6.9 | ) | $ | 61.3 | $ | 75.8 | ||||||||||||
| Adjusted EBITDA | $ | 16.8 | $ | 12.1 | $ | 3.0 | $ | (6.1 | ) | $ | (1.8 | ) | $ | (4.6 | ) | $ | 77.5 | $ | 85.5 | |||||||||||||
National Retail Solutions (NRS)
During 4Q23 and 4Q22, the NRS segment contributed 6.6% and 5.9% of IDT’s consolidated revenue, respectively. For FY2023 and FY2022, the corresponding contributions were 6.2% and 3.8%, respectively.
Take-Aways:
During 4Q23, NRS added 1,744 net active terminals – a quarterly record. During FY2023, the network expanded by 6,308 net new terminals.During 4Q23, NRS added 1,661 net payment processing accounts, also a record quarterly increase. During FY2023, NRS added 5,459 net payment processing accounts.Merchant Services revenue growth was driven primarily by the increase in net payment processing accounts. National Retail Solutions (NRS)(Terminals and accounts at end of period. $ in millions, except for revenue per terminal) 4Q233Q234Q224Q23-4Q22 (% Δ)FY2023FY2022 FY2023-FY2022
(% Δ) Terminals and payment processing accounts Active POS terminals 25,700 23,900 19,400 +33% Payment processing accounts 15,800 14,100 10,300 +53% Recurring revenue Merchant Services and other $10.3 $8.7 $5.8 +79% $32.8 $17.5 +88% Advertising and Data $6.2 $5.8 $10.3 (40 )% $30.6 $22.3 +37% SaaS Fees $2.3 $2.1 $1.6 +44% $8.0 $5.6 +45% Total recurring revenue$18.8$16.5$17.7 +6
%
$71.4$45.3+58%POS Terminal Sales $1.1 $1.6 $1.6 (29 %) $5.7 $6.0 (6 )%Total revenue$19.9$18.1$19.2+4%$77.1$51.3+50 % Monthly average recurring revenue per terminal* $253 $237 $316 (20 )% $264 $226 +17% Income from operations $1.7 $2.1 $6.7 (75 )% $14.4 $11.2 +29% Adjusted EBITDA $2.4 $2.7 $7.1 (66 )% $16.8 $12.1 +38%
net2phone
During 4Q23 and 4Q22, the net2phone segment contributed 6.3% and 4.9% of IDT’s consolidated revenue, respectively. For FY2023 and FY2022, the corresponding contributions were 5.8% and 4.3%, respectively.
net2phone(Seats in thousands at end of period. $ in millions) 4Q233Q234Q224Q23-4Q22 (% Δ, $)FY2023FY2022 FY2023-FY2022
(% Δ, $) Seats 352 340 291 +21% Revenue Subscription revenue $17.9 $17.1 $15.1 +19% $66.8 $53.6 +25% Other revenue $1.4 $1.3 $1.1 +25% $5.6 $4.6 +20% Total Revenue$19.3$18.4$16.2 +19%$72.4$58.2 +24% Loss from operations $(0.7) $(0.4) $(1.8) +$1.1 $(2.8) $(11.1) +$8.4 Adjusted EBITDA $0.9 $1.0 $(0.4) +$1.3 $3.0 $(6.1) +$9.1
Take-Aways:
net2phone’s year-over-year increase in seats served was powered by continued expansion in key markets led by the U.S., Brazil, and Mexico.In 4Q23, subscription revenue increased 19% year-over-year driven by the robust increase in seats served.In FY2023, subscription revenue increased 25% compared to FY2022, as the increase in seats served was augmented by a 3% increase in subscription revenue per seat including a 6% increase in Latin American markets.Fintech
During 4Q23 and 4Q22, the Fintech segment contributed 8.1% and 5.6% of IDT’s consolidated revenue, respectively. For FY2023 and FY2022, the corresponding contributions were 7.0% and 4.7%, respectively.
Fintech(Transactions in thousands. $ in millions except for revenue per transaction) 4Q233Q234Q224Q23-4Q22 (% Δ, $)FY2023FY2022 FY2023-FY2022
(% Δ, $) BOSS Money Transactions 3,793 3,274 2,670 +42% 12,983 9,370 +39% Fintech Revenue BOSS Money $22.3 $19.4 $16.4 +36% $76.9 $55.6 +38% Other $2.3 $2.4 $2.1 +6% $9.7 $9.0 +7% Total Revenue$24.6$21.8$18.5 +33%$86.6$64.6 +34% Average revenue per transaction* $5.87 $5.94 $6.13 $ (0.26 ) $5.93 $5.93 NC Loss from operations $(1.9) $(1.3) $(1.9) NC $(2.5) $(6.9) +$4.4 Adjusted EBITDA $(1.2) $(0.6) $(1.3) +$0.1 $(1.8) $(4.6) +$2.8
Take-Aways:
- In 4Q23, the 42% increase in BOSS Money transactions included a 47% increase in retail transactions driven by expansion of the BOSS Money retail agent network and enhancements to the retailer portal. Digital transactions increased 41%. In FY2023, transactions increased 39% including a 41% increase in retail transactions and a 38% increase in digital transactions.
- BOSS Money revenue increased 36% in 4Q23 and 38% in FY2023 driven primarily by cross-marketing within the larger BOSS ecosystem and expansion of the retail agent network.
Traditional Communications
During 4Q23 and 4Q22, the Traditional Communications segment contributed 79.0% and 83.6% of IDT’s consolidated revenue, respectively. For FY2023 and FY2022, the corresponding contributions were 81.0% and 87.2%, respectively.
Traditional Communications($ in millions) 4Q233Q234Q224Q23-4Q22 (% Δ)FY2023FY2022 FY2023-FY2022
(% Δ) Revenue IDT Digital Payments $100.8 $101.0 $112.6 (10)% $417.1 $473.2 (12)%BOSS Revolution Calling $75.4 $77.6 $90.2 (16)% $322.1 $387.9 (17)%IDT Global $55.6 $54.5 $62.9 (12)% $230.3 $292.4 (21)%Other $8.2 $7.9 $8.8 (7)% $33.2 $36.5 (9)%Total Revenue$240.0$241.0$274.6(13)%$1,002.7$1,190.0(16)% Income from operations $14.1 $12.9 $18.0 (22%) $61.3 $75.8 (19%)Adjusted EBITDA $18.6 $19.7 $20.5 (9)% $77.5 $85.5 (9)%
Take-Aways:
As in recent prior quarters, the year-over-year decrease in IDT Digital Payments revenue was due to the deterioration of a key international mobile top-up corridor.Although BOSS Revolution Calling and IDT Global’s revenues were relatively unchanged sequentially, the industry-wide decline in the paid minute calling markets will continue to impact revenues and cash flows for the segment in the coming quarters.NOTES ON FINANCIAL STATEMENTS
Consolidated results for all periods presented include corporate overhead. Corporate G&A expense in 4Q23 increased to $2.6 million from $1.7 million in 4Q22 reflecting an increase in audit and accounting fees and higher employee compensation expense. For FY2023, those same factors as well as increased non-cash stock-based compensation expense drove an increase in corporate G&A to $9.3 million from $7.8 million in FY2022.
As of July 31, 2023, IDT held $152.2 million in cash, cash equivalents, debt securities, and current equity investments. Current assets totaled $387.1 million and current liabilities totaled $294.1 million. IDT had no outstanding debt at the fiscal year-end.
Net cash provided by operating activities during 4Q23 was $25.4 million compared to $16.1 million during 4Q22. Exclusive of changes in customer deposit balances at IDT’s Gibraltar-based bank, net cash provided by operating activities during 4Q23 was $27.1 million compared to $22.2 million during 4Q22. The increase in net cash provided by operating activities was primarily due to the timing of operating cash receipts and payments.
Net cash provided by operating activities during FY2023 was $54.1 million compared to $29.4 million in FY2022. Exclusive of changes in customer deposit balances at IDT’s Gibraltar-based bank, net cash provided by operating activities during FY2023 was $58.3 million compared to $45.4 million during FY 2022.
Capital expenditures decreased to $5.9 million in 4Q23 from $8.1 million in 4Q22 and increased to $22.0 million in FY2023 from $21.9 million in FY2022.
IDT EARNINGS ANNOUNCEMENT AND SUPPLEMENTAL INFORMATION
This release is available for download in the “Investors & Media” section of the IDT Corporation website (https://www.idt.net/investors-and-media) and has been filed on a current report (Form 8-K) with the SEC.
IDT will host an earnings conference call beginning at 5:30 PM Eastern today with management’s discussion of results followed by Q&A with investors. To listen to the call and participate in the Q&A, dial 1-888-506-0062 (toll-free from the US) or 1-973-528-0011 (international) and request the IDT Corporation call (participant access code: 300767).
A replay of the conference call will be available approximately three hours after the call concludes through October 24, 2023. To access the call replay, dial 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and provide this replay passcode: 49120. The replay will also be accessible via streaming audio at the IDT investor relations website.
ABOUT IDT CORPORATION
IDT Corporation (: IDT) is a global provider of fintech and communications services through a portfolio of synergistic businesses: National Retail Solutions (NRS), through its point-of-sale (POS) platform, enables independent retailers to operate more effectively while providing advertisers and marketers with unprecedented reach into underserved consumer markets; net2phone provides enterprises and organizations with intelligently integrated cloud communications and contact center services across channels and devices; Our fintech and neo-banking services include BOSS Money, our popular international remittance business, as well as other services that make saving, spending, and sharing money easy and secure; IDT Digital Payments and BOSS Revolution Calling make sharing prepaid products and services and speaking with friends and family around the world convenient and reliable; and, IDT Global and IDT Express enable communications services to provision and manage international voice and SMS messaging.
All statements above 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 Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.
CONTACT
IDT Corporation Investor Relations
Bill Ulrey
[email protected]
973-438-3838
IDT CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) 2023
Unaudited 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents$103,637 $98,352 Restricted cash and cash equivalents95,186 91,210 Debt securities42,414 22,303 Equity investments6,198 17,091 Trade accounts receivable, net of allowance for doubtful accounts of $5,642 and $5,328 at July 31, 2023 and 2022, respectively32,092 39,525 Settlement assets, net of reserve of $1,143 and $554 at July 31, 2023 and 2022, respectively32,396 31,938 Disbursement prefunding30,113 21,057 Prepaid expenses16,638 17,526 Other current assets28,394 23,625 TOTAL CURRENT ASSETS387,068 362,627 Property, plant, and equipment, net38,655 36,866 Goodwill26,457 26,380 Other intangibles, net8,196 9,609 Equity investments9,874 7,426 Operating lease right-of-use assets5,540 7,210 Deferred income tax assets, net24,101 36,701 Other assets10,919 10,275 TOTAL ASSETS$510,810 $497,094 LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY CURRENT LIABILITIES: Trade accounts payable$22,231 $28,543 Accrued expenses110,796 117,109 Deferred revenue35,343 36,531 Customer deposits86,481 85,764 Settlement liabilities21,495 17,659 Other current liabilities17,761 19,466 TOTAL CURRENT LIABILITIES294,107 305,072 Operating lease liabilities2,881 4,606 Other liabilities3,354 6,588 TOTAL LIABILITIES300,342 316,266 Commitments and contingencies Redeemable noncontrolling interest10,472 10,191 EQUITY: IDT Corporation stockholders’ equity: Preferred stock, $.01 par value; authorized shares—10,000; no shares issued— — Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and 1,574 shares outstanding at July 31, 2023 and 202233 33 Class B common stock, $.01 par value; authorized shares—200,000; 27,851 and 27,725 shares issued and 23,699 and 24,112 shares outstanding at July 31, 2023 and 2022, respectively279 277 Additional paid-in capital301,408 296,005 Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,152 and 3,613 shares of Class B common stock at July 31, 2023 and 2022, respectively(115,461) (101,565)Accumulated other comprehensive loss(17,192) (11,305)Retained earnings (accumulated deficit)24,662 (15,830)Total IDT Corporation stockholders’ equity193,729 167,615 Noncontrolling interests6,267 3,022 TOTAL EQUITY199,996 170,637 TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY$510,810 $497,094
IDT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Year ended July 31(in thousands, except per share data) 2023
Unaudited 2022 2021 REVENUES$1,238,854 $1,364,057 $1,446,990 COSTS AND EXPENSES: Direct cost of revenues (exclusive of depreciation and amortization)875,734 1,034,430 1,154,048 Selling, general and administrative (i)276,891 250,481 218,467 Depreciation and amortization20,136 18,115 17,764 Severance935 116 452 TOTAL COSTS AND EXPENSES1,173,696 1,303,142 1,390,731 Other operating (expense) gain, net(4,415) (826) 731 Income from operations60,743 60,089 56,990 Interest income, net3,147 146 318 Other (expense) income, net(3,083) (25,352) 7,916 Income before income taxes60,807 34,883 65,224 (Provision for) benefit from income taxes(16,441) (5,878) 31,667 NET INCOME44,366 29,005 96,891 Net income attributable to noncontrolling interests(3,874) (1,977) (416)NET INCOME ATTRIBUTABLE TO IDT CORPORATION$40,492 $27,028 $96,475 Earnings per share attributable to IDT Corporation common stockholders: Basic$1.59 $1.05 $3.78 Diluted$1.58 $1.03 $3.70 Weighted-average number of shares used in calculation of earnings per share: Basic25,517 25,791 25,495 Diluted25,577 26,356 26,053 (i) Stock-based compensation included in selling, general and administrative expenses$4,518 $1,930 $1,490
IDT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) 2023
Unaudited 2022 2021 OPERATING ACTIVITIES Net income$44,366 $29,005 $96,891 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization20,136 18,115 17,764 Deferred income taxes12,601 4,801 (32,793)Provision for doubtful accounts receivable and reserve for settlement assets2,198 2,330 1,782 Net unrealized loss (gain) from marketable securities3,368 18,960 (3,262)Stock-based compensation4,518 1,930 1,490 Other3,175 3,379 (4,096)Changes in assets and liabilities: Trade accounts receivable4,726 (8,279) 977 Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets(17,503) (21,046) (6,952)Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities(17,216) (1,110) (264)Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)(4,200) (15,966) (6,906)Deferred revenue(2,029) (2,712) 1,989 Net cash provided by operating activities54,140 29,407 66,620 INVESTING ACTIVITIES Capital expenditures(21,958) (21,879) (16,765)Payments for acquisitions, net of cash acquired— (7,552) (3,673)Cash acquired from acquisition of interest in variable interest entity— — 3,336 Purchase of Rafael Holdings, Inc. Class B common stock and warrant— — (5,000)Exercise of warrant to purchase shares of Rafael Holdings, Inc. Class B common stock— — (1,000)Purchase of convertible preferred stock in equity method investment(840) (1,051) (4,000)Purchases of debt securities and equity investments(59,872) (24,454) (43,187)Proceeds from maturities and sales of debt securities and redemption of equity investments49,211 21,157 26,230 Net cash used in investing activities(33,459) (33,779) (44,059)FINANCING ACTIVITIES Distributions to noncontrolling interests(348) (514) (848)Payment for acquisition of warrant in variable interest entity— — (791)Proceeds from other liabilities300 2,301 729 Repayment of other liabilities(2,037) (1,319) (108)Proceeds from sale of redeemable equity in subsidiary— 10,000 — Proceeds from borrowings under revolving credit facility27,383 2,566 — Repayments of borrowings under revolving credit facility(27,383) (2,566) — Proceeds from exercise of stock options172 137 687 Repurchases of Class B common stock(13,896) (26,222) (4,192)Net cash used in financing activities(15,809) (15,617) (4,523)Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents4,389 (17,365) 7,656 Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents9,261 (37,354) 25,694 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of year189,562 226,916 201,222 Cash, cash equivalents, and restricted cash and cash equivalents at end of year$198,823 $189,562 $226,916 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash payments made for interest$536 $461 $486 Cash payments made for income taxes$777 $109 $193 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Conversion of equity method investment’s secured promissory notes into convertible preferred stock$4,038 $— $— Stock issued to certain executive officers for bonus payments$615 $— $— Liabilities incurred for acquisitions$— $7,849 $628 Shares of the Company’s Class B common stock issued for acquisition$100 $1,000 $— Cashless exercise of stock options in exchange for shares of the Company’s Class B common stock$— $14,930 $— Stock issued for matching contributions to the 401(k) Plan$— $— $1,042
Reconciliation of Non-GAAP Financial Measures for the
Fourth Quarter and Full Fiscal Years 2023 and 2022
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), IDT also disclosed for 4Q23, 3Q23, 4Q22, and the full fiscal years 2023 and 2022, Adjusted EBITDA and non-GAAP earnings per diluted share (EPS), both of which are non-GAAP measures.
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 comparable measure calculated and presented in accordance with GAAP.
IDT’s measure of non-GAAP EPS is calculated by dividing non-GAAP net income by the diluted weighted-average shares. IDT’s measure of non-GAAP net income starts with net income attributable to IDT in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expense, and deducts other operating gains. These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2023 and fiscal 2022 periods.
Management believes that IDT’s Adjusted EBITDA and non-GAAP EPS are measures which provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of IDT’s or the relevant segment’s core operating results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses Adjusted EBITDA and non-GAAP EPS to evaluate operating performance in relation to IDT’s competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, IDT has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting.
Management refers to Adjusted EBITDA, as well as the GAAP measures income (loss) from operations and net income, on a segment and/or consolidated level to facilitate internal and external comparisons to the segments’ and IDT’s historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.
While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or capitalized in prior periods. IDT’s Adjusted EBITDA, which is exclusive of depreciation and amortization, is a useful indicator of its current perf
