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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 1-16371

 

 

 

IDT CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   22-3415036

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification Number)

 

520 Broad Street, Newark, New Jersey   07102
(Address of principal executive offices)   (Zip Code)

 

(973) 438-1000

(Registrant’s telephone number, including area code)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Name of each exchange on which registered
Class B common stock, par value $.01 per share   New York Stock Exchange

 

Trading symbol: IDT

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☒
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

 

As of December 7, 2023, the registrant had the following shares outstanding:

 

Class A common stock, $.01 par value: 1,574,326 shares outstanding (excluding 1,698,000 treasury shares)
Class B common stock, $.01 par value: 23,586,304 shares outstanding (excluding 4,278,712 treasury shares)

 

 

 

 
 

 

IDT CORPORATION

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION 3
     
Item 1. Financial Statements (Unaudited) 3
     
  Consolidated Balance Sheets 3
     
  Consolidated Statements of Income 4
     
  Consolidated Statements of Comprehensive Income 5
     
  Consolidated Statements of Equity 6
     
  Consolidated Statements of Cash Flows 7
     
  Notes to Consolidated Financial Statements 8
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24
     
Item 3. Quantitative and Qualitative Disclosures About Market Risks 33
     
Item 4. Controls and Procedures 33
     
PART II. OTHER INFORMATION 34
     
Item 1. Legal Proceedings 34
     
Item 1A. Risk Factors 34
     
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 34
     
Item 3. Defaults Upon Senior Securities 34
     
Item 4. Mine Safety Disclosures 34
     
Item 5. Other Information 34
     
Item 6. Exhibits 35
     
SIGNATURES 36

 

2
 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements (Unaudited)

 

IDT CORPORATION

 

CONSOLIDATED BALANCE SHEETS

 

  

October 31,
2023

  

July 31,
2023

 
   (Unaudited)   (Note 1) 
   (in thousands, except per share data) 
Assets        
Current assets:          
Cash and cash equivalents  $121,668   $103,637 
Restricted cash and cash equivalents   86,785    95,186 
Debt securities   33,242    42,414 
Equity investments   4,761    6,198 
Trade accounts receivable, net of allowance for credit losses of $5,909 at October 31, 2023 and allowance for doubtful accounts of $5,642 at July 31, 2023   35,328    32,092 
Settlement assets, net of reserve of $1,469 at October 31, 2023 and $1,143 at July 31, 2023   18,122    32,396 
Disbursement prefunding   35,733    30,113 
Prepaid expenses   19,502    16,638 
Other current assets   27,034    28,394 
           
Total current assets   382,175    387,068 
Property, plant, and equipment, net   38,802    38,655 
Goodwill   26,311    26,457 
Other intangibles, net   7,215    8,196 
Equity investments   8,150    9,874 
Operating lease right-of-use assets   4,910    5,540 
Deferred income tax assets, net   20,539    24,101 
Other assets   10,944    10,919 
           
Total assets  $499,046   $510,810 
           
Liabilities, redeemable noncontrolling interest, and equity          
Current liabilities:          
Trade accounts payable  $24,469   $22,231 
Accrued expenses   100,107    110,796 
Deferred revenue   34,042    35,343 
Customer deposits   79,541    86,481 
Settlement liabilities   19,268    21,495 
Other current liabilities   18,507    17,761 
           
Total current liabilities   275,934    294,107 
Operating lease liabilities   2,346    2,881 
Other liabilities   3,220    3,354 
           
Total liabilities   281,500    300,342 
Commitments and contingencies   -    - 
Redeemable noncontrolling interest   10,579    10,472 
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 October 31, 2023 and July 31, 2023   33    33 
Class B common stock, $.01 par value; authorized shares—200,000; 27,865 and 27,851 shares issued and 23,586 and 23,699 shares outstanding at October 31, 2023 and July 31, 2023, respectively   279    279 
Additional paid-in capital   302,351    301,408 
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,279 and 4,152 shares of Class B common stock at October 31, 2023 and July 31, 2023, respectively   (118,312)   (115,461)
Accumulated other comprehensive loss   (16,627)   (17,192)
Retained earnings   32,321    24,662 
           
Total IDT Corporation stockholders’ equity   200,045    193,729 
Noncontrolling interests   6,922    6,267 
           
Total equity   206,967    199,996 
           
Total liabilities, redeemable noncontrolling interest, and equity  $499,046   $510,810 

 

See accompanying notes to consolidated financial statements.

 

3
 

 

IDT CORPORATION

 

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands, except per share data) 
         
Revenues  $301,205   $321,816 
Direct cost of revenues   206,777    232,670 
Gross profit   

94,428

    

89,146

 
Operating expenses (gains):          
Selling, general and administrative (i)   77,222    69,620 
Severance   525    100 

Other operating gain, net (see Note 10)

   

(484

)   

(800

)
           
Total operating expenses   77,263    68,920 
           
Income from operations   17,165    20,226 
Interest income, net   844    509 
Other expense, net   (5,586)   (3,842)
           
Income before income taxes   12,423    16,893 
Provision for income taxes   (3,947)   (4,338)
           
Net income   8,476    12,555 
Net income attributable to noncontrolling interests   (817)   (1,553)
           
Net income attributable to IDT Corporation  $7,659   $11,002 
           
Earnings per share attributable to IDT Corporation common stockholders:          
Basic  $0.30   $0.43 
           
Diluted  $0.30   $0.43 
           
Weighted-average number of shares used in calculation of earnings per share:          
Basic   25,178    25,603 
           
Diluted   25,277    25,616 
           
(i) Stock-based compensation included in selling, general and administrative expense  $771   $572 

 

(i) Stock-based compensation included in selling, general and administrative expense

See accompanying notes to consolidated financial statements.

 

4
 

 

IDT CORPORATION

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

(Unaudited)

 

  

2023

  

2022

 
  

Three Months Ended
October 31,

 
  

2023

  

2022

 
   (in thousands) 
Net income   $8,476   $12,555 
Other comprehensive (loss) income:          
Change in unrealized loss on available-for-sale securities   (66)   (222)
Foreign currency translation adjustments   631    (145)
           
Other comprehensive income (loss)   565    (367)
           
Comprehensive income   9,041    12,188 
Comprehensive income attributable to noncontrolling interests   (817)   (1,553)
           
Comprehensive income attributable to IDT Corporation  $

8,224

   $10,635 

 

See accompanying notes to consolidated financial statements.

 

5
 

 

IDT CORPORATION

 

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

 

                                 
   Three Months Ended October 31, 2023
(in thousands)		 
   IDT Corporation Stockholders   
   Class A Common Stock   Class B Common Stock   Additional Paid-In Capital   Treasury Stock   Accumulated Other Comprehensive Loss   Retained Earnings   Noncontrolling Interests   Total Equity 
                                 
BALANCE AT JULY 31, 2023  $      33   $279   $301,408   $(115,461)  $(17,192)  $24,662   $6,267   $199,996 
Exercise of stock options   —    —    172    —    —    —    —    172 
Repurchases of Class B common stock through repurchase program   —    —    —    (2,836)   —    —    —    (2,836)
Restricted Class B common stock purchased from employees   —    —    —    (15)   —    —    —    (15)
Stock-based compensation   —    —    771    —    —    —    —    771 
Distributions to noncontrolling interests   —    —    —    —    —    —    (55)   (55)
Other comprehensive income   —    —    —    —    565    —    —    565 
Net income   —    —    —    —    —    7,659    710    8,369 
BALANCE AT OCTOBER 31, 2023  $33   $279   $302,351   $(118,312)  $(16,627)  $32,321   $6,922   $206,967 

 

                                 
   Three Months Ended October 31, 2022
(in thousands)		 
   IDT Corporation Stockholders   
   Class A Common Stock   Class B Common Stock   Additional Paid-In Capital   Treasury Stock   Accumulated Other Comprehensive Loss   Accumulated Deficit   Noncontrolling Interests   Total Equity 
                                 
BALANCE AT JULY 31, 2022  $33   $277   $296,005   $(101,565)  $(11,305)  $(15,830)  $3,022   $170,637 
Repurchases of Class B common stock through repurchase program   —    —    —    (5,006)   —    —    —    (5,006)
Restricted Class B common stock purchased from employees   —    —    —    (335)   —    —    —    (335)
Stock issued to certain executive officers for bonus payments   —    —    615    —    —    —    —    615 
Stock-based compensation   —    1    571    —    —    —    —    572 
Distributions to noncontrolling interests   —    —    —    —    —    —    (99)   (99)
Other comprehensive loss   —    —    —    —    (367)   —    —    (367)
Net income   —    —    —    —    —    11,002    1,420    12,422 
BALANCE AT OCTOBER 31, 2022  $      33   $278   $297,191   $(106,906)  $(11,672)  $(4,828)  $4,343   $178,439 

 

See accompanying notes to consolidated financial statements.

 

6
 

 

IDT CORPORATION

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Operating activities          
Net income   $8,476   $12,555 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   5,047    4,790 
Deferred income taxes   3,561    3,672 
Provision for credit losses, doubtful accounts receivable, and reserve for settlement assets   759    430 
Net unrealized loss from marketable securities   1,528    1,846 
Stock-based compensation   771    572 
Other   897    756 
Changes in assets and liabilities:          
Trade accounts receivable   (4,572)   2,442 
Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets   8,250    (4,380)
Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities   (7,061)   (6,970)
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank)   (2,326)   2,865 
Deferred revenue   (540)   (394)
           
Net cash provided by operating activities   14,790    18,184 
Investing activities          
Capital expenditures   (4,322)   (5,172)
Purchase of convertible preferred stock in equity method investment   (672)   — 
Purchases of debt securities and equity investments   (7,750)   (2,058)
Proceeds from maturities and sales of debt securities and equity investments   17,067    11,472 
           
Net cash provided by investing activities   4,323    4,242 
Financing activities          
Distributions to noncontrolling interests   (55)   (99)
Proceeds from other liabilities   100    300 
Repayment of other liabilities   (15)   (1,916)
Proceeds from borrowings under revolving credit facility   30,315    — 
Repayment of borrowings under revolving credit facility   (30,315)   — 
Proceeds from exercise of stock options   

172

    

—

 
Repurchases of Class B common stock   (2,851)   (5,341)
           
Net cash used in financing activities   (2,649)   (7,056)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents   (6,834)   (6,157)
           
Net increase in cash, cash equivalents, and restricted cash and cash equivalents   9,630    9,213 
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period   198,823    189,562 
           
Cash, cash equivalents, and restricted cash and cash equivalents at end of period  $208,453   $198,775 
           
Supplemental Schedule of Non-Cash Financing Activities          
Stock issued to certain executive officers for bonus payments  $—   $615 

 

See accompanying notes to consolidated financial statements.

 

7
 

 

IDT CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 1—Basis of Presentation

 

The accompanying unaudited consolidated financial statements of IDT Corporation and its subsidiaries (the “Company” or “IDT”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2024. The balance sheet at July 31, 2023 has been derived from the Company’s audited financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

 

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2024 refers to the fiscal year ending July 31, 2024).

 

As of October 31, 2023, the Company owned 90.0% of the outstanding shares of its subsidiary, net2phone 2.0, Inc. (“net2phone 2.0”), which owns and operates the net2phone segment, and 80.0% of the outstanding shares of National Retail Solutions (“NRS”), and, on a fully diluted basis assuming all the vesting criteria related to various rights granted have been met and other assumptions, the Company would own 85.8% of net2phone 2.0 and 77.7% of NRS.

 

Reclassifications

 

As of August 1, 2023, the Company includes depreciation and amortization in “Direct cost of revenues” and “Selling, general and administrative” expense and is reporting gross profit in the consolidated statements of income. Prior to August 1, 2023, depreciation and amortization was a separate caption in the consolidated statements of income. Depreciation and amortization expense of $4.8 million in the three months ended October 31, 2022 was reclassified to conform to the current year’s presentation as follows: $1.0 million was reclassified to “Direct cost of revenues” and $3.8 million was reclassified to “Selling, general and administrative” expense.

 

In the consolidated statements of cash flows, cash provided by “Trade accounts receivable” in the three months ended October 31, 2022 of $2.7 million was reclassified to “Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets” to conform to the current year’s presentation.

 

Recently Adopted Accounting Standard

 

On August 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, that changed the impairment model for most financial assets and certain other instruments. For receivables, entities are required to use a new forward-looking current expected credit loss model to determine its allowance for credit losses, which replaced the allowance for doubtful accounts. When determining the allowance for credit losses for its trade accounts receivable, the Company considers the probability of recoverability of accounts receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates. The Company also considers future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks will be assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Account balances are written off against the allowance when it is determined that the receivable will not be recovered. For available-for-sale debt securities with unrealized losses, the concept of “other-than-temporary” impairment was replaced by a determination whether any impairment is a result of a credit loss or other factors. The portion of the unrealized loss that is the result of a credit loss is recognized as an allowance and a corresponding expense recorded in “Other expense, net” in the consolidated statements of income. Unrealized loss that is not the result of a credit loss is recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements, and it was not necessary to record a cumulative-effect adjustment to retained earnings as of August 1, 2023.

 

Note 2—Business Segment Information

 

The Company has four reportable business segments, NRS, Fintech, net2phone, and Traditional Communications.

 

The NRS segment is an operator of a nationwide point-of-sale (“POS”) network providing independent retailers with store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.

 

8
 

 

The Fintech segment is comprised of BOSS Money, a provider of international money remittance and related value/payment transfer services, as well as other, significantly smaller, financial services businesses, including Leaf Global Fintech Corporation (“Leaf”), a provider of digital wallet services in emerging markets, a variable interest entity that operates money transfer businesses, and IDT Financial Services Limited (“IDT Financial Services”), the Company’s Gibraltar-based bank.

 

The net2phone segment is comprised of net2phone’s cloud communications and contact center offerings.

 

The Traditional Communications segment includes IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts, BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada, and IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

 

The Company’s reportable segments are distinguished by types of service, customers, and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. There are no significant asymmetrical allocations to segments. The Company evaluates the performance of its business segments based primarily on income (loss) from operations.

 

Corporate costs mainly include compensation, consulting fees, treasury, tax and accounting services, human resources, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.

 

Operating results for the business segments of the Company were as follows:

 

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Corporate   Total 
Three Months Ended October 31, 2023                              
Revenues  $23,995   $26,563   $19,927   $230,720   $—   $301,205 
Income (loss) from operations   5,460    (1,383)   (7)   15,406    (2,311)   17,165 
Depreciation and amortization:                              
Included in “Direct cost of revenues”   

450

    22    600    184    

—

    

1,256

 
Included in “Selling, general and administrative expense”   

285

    

671

    

840

    

1,964

    31    

3,791

 
                               
Three Months Ended October 31, 2022                              
Revenues  $19,313   $19,887   $16,950   $265,666   $—   $321,816 
Income (loss) from operations   5,231    1,512    (1,056)   17,263    (2,724)   20,226 
Depreciation and amortization:                              
Included in “Direct cost of revenues”   

320

    

23

    

498

    

193

    

—

    1,034 
Included in “Selling, general and administrative expense”   

158

    

598

    

854

    

2,128

    

18

    

3,756

 

 

Note 3—Revenue Recognition

 

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications and payment offerings as well as wholesale international voice and SMS termination. BOSS Money, NRS, and net2phone are technology-driven, synergistic businesses that leverage the Company’s core assets. BOSS Money’s and NRS’ revenues are primarily recognized at a point in time, and net2phone’s revenue is mainly recognized over time. Traditional Communications are mostly minute-based, paid-voice communications services, and revenue is primarily recognized at a point in time. The Company’s most significant revenue streams are from IDT Digital Payments, BOSS Revolution Calling, and IDT Global. IDT Digital Payments and BOSS Revolution Calling are sold direct-to-consumer and through distributors and retailers.

 

Disaggregated Revenues

 

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
National Retail Solutions  $23,995   $19,313 
           
BOSS Money   24,239    17,554 
Other   2,324    2,333 
           
Total Fintech   26,563    19,887 
           
net2phone   19,927    16,950 
           
IDT Digital Payments   99,986    109,048 
BOSS Revolution Calling   71,222    86,253 
IDT Global   52,034    61,611 
Other   7,478    8,754 
           
Total Traditional Communications   230,720    265,666 
           
Total  $301,205   $321,816 

 

9
 

 

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location:

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Total 
Three Months Ended October 31, 2023                    
United States  $23,995   $25,834   $10,688   $162,998   $223,515 
Outside the United States:                         
United Kingdom   —    —    —    58,843    58,843 
Other   —    729    9,239    8,879    18,847 
                          
Total outside the United States   

—

    729    9,239    67,722    77,690 
                          
Total  $23,995   $26,563   $19,927   $230,720   $301,205 

 

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Total 
Three Months Ended October 31, 2022                    
United States  $19,313   $19,255   $8,802   $184,838   $232,208 
Outside the United States:                         
United Kingdom   —    —    —    68,940    68,940 
Other   —    632    8,148    11,888    20,668 
                          
Total outside the United States   —    632    8,148    80,828    89,608 
                          
Total  $19,313   $19,887   $16,950   $265,666   $321,816 

 

Remaining Performance Obligations

 

The following table includes revenue by business segment expected to be recognized in the future from performance obligations that were unsatisfied or partially unsatisfied as of October 31, 2023. The table excludes contracts that had an original expected duration of one year or less.

  Schedule of Estimated Revenue by Business Segment

(in thousands)  National Retail Solutions   net2phone   Total 
Twelve-month period ending October 31:            
2024  $5,740   $38,430   $44,170 
2025   4,767    19,092    23,859 
Thereafter   4,682    6,718    11,400 
                
Total  $15,189   $64,240   $79,429 

 

Accounts Receivable and Contract Balances

 

The timing of revenue recognition may differ from the time of billing to the Company’s customers. Trade accounts receivable in the Company’s consolidated balance sheets represent unconditional rights to consideration. The Company would record a contract asset when revenue is recognized in advance of its right to bill and receive consideration. The Company has not currently identified any contract assets.

 

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The Company’s contract liability balance is primarily payments received for prepaid BOSS Revolution Calling. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company’s consolidated balance sheets as “Deferred revenue”.

 

10
 

 

The following table presents information about the Company’s contract liability balance:

 

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period  $16,089   $17,906 

 

Deferred Customer Contract Acquisition and Fulfillment Costs

 

The Company recognizes as an asset its incremental costs of obtaining a contract with a customer that it expects to recover. The Company’s incremental costs of obtaining a contract with a customer are sales commissions paid to employees and third parties on sales to end users. If the amortization period were one year or less for the asset that would be recognized from deferring these costs, the Company applies the practical expedient whereby the Company charges these costs to expense when incurred. For net2phone sales, the Company defers these costs and amortizes them over the expected customer relationship period when it is expected to exceed one year.

 

The Company’s costs to fulfill its contracts do not meet the criteria to be recognized as an asset, therefore these costs are charged to expense as incurred.

 

The Company’s deferred customer contract acquisition costs were as follows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Deferred customer contract acquisition costs included in “Other current assets”  $4,180   $4,460 
Deferred customer contract acquisition costs included in “Other assets”   3,744    3,734 
           
Total  $7,924   $8,194 

 

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Amortization of deferred customer contract acquisition costs  $1,215   $1,176 

 

Note 4—Leases

 

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from less than one year to five years. net2phone also has operating leases for office equipment. Certain of these leases contain renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise any of these options.

 

net2phone is the lessee under equipment leases that are classified as finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

 

11
 

 

Supplemental disclosures related to the Company’s operating leases were as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Operating lease cost  $758   $767 
Short-term lease cost   326    269 
           
Total lease cost  $1,084   $1,036 
           
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows from operating leases  $791   $764 

 

 

  

October 31,
2023

  

July 31,
2023

 
Weighted-average remaining lease term-operating leases   2.1 years     2.3 years 
           
Weighted-average discount rate-operating leases   3.9%   3.7%

 

In the three months ended October 31, 2023 and 2022, the Company obtained right-of-use assets of $0.1 million and $0.4 million, respectively, in exchange for new operating lease liabilities.

 

The Company’s aggregate operating lease liability was as follows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Operating lease liabilities included in “Other current liabilities”  $2,732   $2,861 
Operating lease liabilities included in noncurrent liabilities   2,346    2,881 
           
Total  $5,078   $5,742 

 

Future minimum maturities of operating lease liabilities were as follows:

 

(in thousands)     
Twelve-month period ending October 31:     
2024  $2,883 
2025   1,713 
2026   478 
2027   220 
2028   12 
Thereafter   — 
      
Total lease payments   5,306 
Less imputed interest   (228)
      
Total operating lease liabilities  $5,078 

 

Note 5—Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported in the consolidated balance sheets that equals the total of the same amounts reported in the consolidated statements of cash flows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Cash and cash equivalents  $121,668   $103,637 
Restricted cash and cash equivalents   86,785    95,186 
           
Total cash, cash equivalents, and restricted cash and cash equivalents  $208,453   $198,823 

 

At October 31, 2023 and July 31, 2023, restricted cash and cash equivalents included $80.1 million and $87.3 million, respectively, in restricted cash and cash equivalents for customer deposits held by IDT Financial Services. Certain of the electronic money financial services regulations in Gibraltar require IDT Financial Services to safeguard cash held for customer deposits, segregate cash held for customer deposits from any other cash that IDT Financial Services holds and utilize the cash only for the intended payment transaction.

 

12
 

 

Company Restricted Cash and Cash Equivalents

 

The Company treats unrestricted cash and cash equivalents held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC, which provide the Company’s international money transfer services in the United States, as substantially restricted and unavailable for other purposes. At October 31, 2023 and July 31, 2023, “Cash and cash equivalents” in the Company’s consolidated balance sheets included an aggregate of $35.1 million and $20.6 million, respectively, held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC, that was unavailable for other purposes.

 

Note 6—Debt Securities

 

The following is a summary of available-for-sale debt securities:

  

  

Amortized Cost

  

Gross Unrealized Gains

  

Gross Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:                
Certificates of deposit*  $1,920   $—   $(3)  $1,917 
U.S. Treasury bills and notes   25,085    —    (141)   24,944 
Government sponsored enterprise notes   3,047    —    (3)   3,044 
Corporate bonds   3,901    —    (564)   3,337 
                     
Total  $33,953   $—   $(711)  $33,242 
                     
July 31, 2023:                    
Certificates of deposit*  $4,080   $—   $(4)  $4,076 
U.S. Treasury bills and notes   31,186    —    (148)   31,038 
Government sponsored enterprise notes   3,881    —    (8)   3,873 
Corporate bonds   3,912    —    (485)   3,427 
                     
Total  $43,059   $—   $(645)  $42,414 

 

*Each of the Company’s certificates of deposit has a CUSIP, was purchased in the secondary market through a broker and may be sold in the secondary market.

 

The gross unrealized losses in the table above are recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. As of October 31, 2023, the Company determined that the unrealized losses were due to changes in interest rates or market liquidity and were not due to credit losses. In addition, the Company does not intend to sell any of the securities with unrealized losses, and it is not more likely than not that the Company will be required to sell any of the securities with unrealized losses.

 

Proceeds from maturities and sales of debt securities and redemptions of equity investments were $17.1 million and $11.5 million in the three months ended October 31, 2023 and 2022, respectively. There were no realized gains or realized losses from sales of debt securities in the three months ended October 31, 2023 and 2022. The Company uses the specific identification method in computing the realized gains and realized losses on the sales of debt securities.

 

The contractual maturities of the Company’s available-for-sale debt securities at October 31, 2023 were as follows:

 

  

Fair Value

 
    (in thousands) 
Within one year  $26,185 
After one year through five years   5,904 
After five years through ten years   1,110 
After ten years   43 
      
Total  $33,242 

 

13
 

 

The following available-for-sale debt securities were in an unrealized loss position for which other-than-temporary impairments were not recognized:

  

  

Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:        
Certificates of deposit  $3   $1,917 
U.S. Treasury bills and notes   141    24,944 
Government sponsored enterprise notes   3    3,044 
Corporate bonds   564    3,337 
           
Total  $711   $33,242 
           
July 31, 2023:          
Certificates of deposit  $4   $3,356 
U.S. Treasury bills and notes   148    31,038 
Government sponsored enterprise notes   8    3,873 
Corporate bonds   485    3,368 
           
Total  $645   $41,635 

 

The following available-for-sale debt securities included in the table above were in a continuous unrealized loss position for 12 months or longer:

 

  

Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:        
U.S. Treasury bills and notes  $66   $639 
Corporate bonds   556    3,216 
           
Total  $622   $3,855 
           
July 31, 2023:          
U.S. Treasury bills and notes  $86   $816 
Corporate bonds   484    3,299 
           
Total  $570   $4,115 

 

At October 31, 2023 and July 31, 2023, the Company did not intend to sell any of the debt securities included in the table above, and it is not more likely than not that the Company will be required to sell any of these securities before recovery of the unrealized losses, which may be at maturity.

 

Note 7—Equity Investments

 

Equity investments consist of the following:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Zedge, Inc. Class B common stock, 42,282 shares at October 31, 2023 and July 31, 2023  $81   $89 
Rafael Holdings, Inc. Class B common stock, 278,810 shares at October 31, 2023 and July 31, 2023   496    558 
Other marketable equity securities   281    1,497 
Fixed income mutual funds   3,903    4,054 
           
Current equity investments  $4,761   $6,198 
           
Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”)  $1,249   $1,263 
Convertible preferred stock—equity method investment   2,444    2,784 
Hedge funds   3,002    3,002 
Other   1,455    2,825 
           
Noncurrent equity investments  $8,150   $9,874 

 

Howard S. Jonas, the Chairman of the Company (an executive officer position) and the Chairman of the Company’s Board of Directors, is also the Vice-Chairman of the Board of Directors of Zedge, Inc. and the Chairman of the Board of Directors and Executive Chairman of Rafael Holdings, Inc.

 

14
 

 

The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Balance, beginning of period  $1,632   $1,501 
Adjustment for observable transactions involving a similar investment from the same issuer   (14)   (27)
Upward adjustment   

129

    

—

 
Impairments   —    — 
           
Balance, end of the period  $1,747   $1,474 

 

The Company decreased the carrying value of the shares of Visa Series C Preferred it held based on the fair value of Visa Class A common stock, including a discount for lack of current marketability, which is classified as “Adjustment for observable transactions involving a similar investment from the same issuer” in the table above. In addition, in connection with the acquisition of Regal Bancorp by SR Bancorp in September 2023, the Company adjusted the carrying value of its shares of Regal Bancorp common stock.

 

Unrealized losses for all equity investments measured at fair value included the following:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Net losses recognized during the period on equity investments  $(917)  $(1,941)
Plus: net losses recognized during the period on equity investments sold during the period   —    4 
           
Unrealized losses recognized during the period on equity investments still held at the reporting date  $(917)  $(1,937)

 

The unrealized gains and losses for all equity investments measured at fair value in the table above included the following:

 

         
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Unrealized losses recognized during the period on equity investments:        
         
Rafael Class B common stock  $(62)  $(72)
           
           
Zedge Class B common stock  $(8)  $(27)

 

Equity Method Investment

 

The Company has an investment in shares of convertible preferred stock of a communications company (the equity method investee, or “EMI”). As of both October 31, 2023 and July 31, 2023, the Company’s ownership was 33.3% of the EMI’s outstanding shares on an as converted basis. The Company accounts for this investment using the equity method since the Company can exercise significant influence over the operating and financial policies of the EMI but does not have a controlling interest.

 

The Company determined that on the dates of the acquisitions of the EMI’s shares, there were differences between its investment in the EMI and its proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to the Company’s interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. In the accompanying consolidated statements of income, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other expense, net” (see Note 17).

 

15
 

 

The following table summarizes the change in the balance of the Company’s equity method investment:

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Balance, beginning of period  $2,784   $1,001 
Purchase of convertible preferred stock   672    — 
Equity in the net loss of investee   (670)   (470)
Amortization of equity method basis difference   (342)   (182)
           
Balance, end of period  $2,444   $349 

 

Summarized financial information of the EMI was as follows:

   

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Revenues  $2,551   $1,873 
Costs and expenses:          
Direct cost of revenues   2,193    1,694 
Selling, general and administrative   2,093    1,636 
Total costs and expenses   4,286    3,330 
Loss from operations   (1,735)   (1,457)
Other expense, net   (104)   (344)
Net loss  $(1,839)  $(1,801)

 

Note 8—Fair Value Measurements

 

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

 

   Level 1 (1)   Level 2 (2)   Level 3 (3)   Total 
   (in thousands) 
October 31, 2023                    
Debt securities  $24,944   $8,298   $—   $33,242 
Equity investments included in current assets   4,761    —    —    4,761 
Equity investments included in noncurrent assets   —    1,230    1,249    2,479 
                     
Total  $29,705   $9,528   $1,249   $40,482 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(1,834)  $(1,834)
Other noncurrent liabilities   —    —    (2,754)   (2,754)
                     
Total  $—   $—   $(4,588)  $(4,588)
                     
July 31, 2023                    
Debt securities  $31,038   $11,376   $—   $42,414 
Equity investments included in current assets   6,198    —    —    6,198 
Equity investments included in noncurrent assets   —    2,500    1,263    3,763 
                     
Total  $37,236   $13,876   $1,263   $52,375 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(2,032)  $(2,032)
Other noncurrent liabilities   —    —    (2,773)   (2,773)
                     
Total  $—   $—   $(4,805)  $(4,805)

 

(1)– quoted prices in active markets for identical assets or liabilities

 

(2)– observable inputs other than quoted prices in active markets for identical assets and liabilities

 

(3)– no observable pricing inputs in the market

 

16
 

 

At both October 31, 2023 and July 31, 2023, the Company had $3.0 million in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method, therefore they were not measured at fair value.

 

The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands)     
Balance, beginning of period  $1,263   $1,132 
Total losses included in “Other expense, net”   (14)   (27)
           
Balance, end of period  $1,249   $1,105 
           
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period  $—   $— 

 

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Balance, beginning of period  $4,805   $8,546 
Payments   (214)   (375)
Total gain included in:          
“Other operating gain, net”   —    (1,565)
“Foreign currency translation adjustment”   (3)   (3)
           
Balance, end of period  $4,588   $6,603 
           
Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period  $—   $— 

 

In the three months ended October 31, 2023, the Company paid an aggregate of $0.2 million in contingent consideration related to a prior acquisition. In the three months ended October 31, 2022, the Company paid an aggregate of $0.4 million in contingent consideration related to prior acquisitions. In addition, in September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the acquisition of Leaf would not be met. The Company recorded a gain of $1.6 million on the write-off of this contingent consideration payment obligation, which was included in “Other operating gain, net” in the accompanying consolidated statements of income.

 

Fair Value of Other Financial Instruments

 

  The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

 

  Cash and cash equivalents, restricted cash and cash equivalents, settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities. At October 31, 2023 and July 31, 2023, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash, cash equivalents, and restricted cash and cash equivalents were classified as Level 1 and settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities were classified as Level 2 of the fair value hierarchy.

 

  Other assets and other liabilities. At October 31, 2023 and July 31, 2023, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.

 

17
 

 

Note 9—Variable Interest Entity

 

The Company is the primary beneficiary of a variable interest entity (“VIE”) that operates money transfer businesses. The Company determined that, effective May 31, 2021, it had the power to direct the activities of the VIE that most significantly impact its economic performance, and the Company has the obligation to absorb losses of and the right to receive benefits from the VIE that could potentially be significant to it. As a result, the Company consolidates the VIE. The Company does not currently own any interest in the VIE and thus the net income incurred by the VIE was attributed to noncontrolling interests in the accompanying consolidated statements of income.

 

The VIE’s net income and aggregate funding provided by the Company were as follows:

           
   Three Months Ended
October 31,		 
   2023   2022 
   (in thousands) 
Net income of the VIE  $81   $140 
           
Aggregate funding provided by the Company, net  $114   $97 

 

18
 

 

The VIE’s summarized consolidated balance sheet amounts are as follows:

           
   October 31,
2023		   July 31,
2023		 
   (in thousands) 
Assets:          
Cash and equivalents  $1,881   $1,596 
Restricted cash   6,578    7,848 
Trade accounts receivable, net   23    62 
Disbursement prefunding   1,037    585 
Prepaid expenses   294    197 
Other current assets   383    317 
Property, plant, and equipment, net   219    272 
Other intangibles, net   699    737 
           
Total assets  $11,114   $11,614 
           
Liabilities and noncontrolling interests:          
Trade accounts payable  $—   $— 
Accrued expenses   86    70 
Settlement liabilities   6,882    7,573 
Due to the Company   140    26 
Accumulated other comprehensive income   1    21 
Noncontrolling interests   4,005    3,924 
           
Total liabilities and noncontrolling interests  $11,114   $11,614 

 

The VIE’s assets may only be used to settle the VIE’s obligations and may not be used for other consolidated entities. The VIE’s liabilities are non-recourse to the general credit of the Company’s other consolidated entities.

 

Note 10—Other Operating Gain, Net

 

The following table summarizes the other operating gain, net by business segment:

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Corporate—Straight Path Communications Inc. class action legal fees  $(212)  $(2,512)
Corporate—Straight Path Communications Inc. class action insurance claims   684    1,725 
Corporate—other   12    — 
Fintech—write-off of contingent consideration liability   —    1,565 
Fintech—government grants   —    33 
Traditional Communications—cable telephony customer indemnification claim   —    (11)
           
Total  $484   $800 

 

Straight Path Communications Inc. Class Action

 

As discussed in Note 16, the Company (as well as other defendants) was named in a class action on behalf of the stockholders of the Company’s former subsidiary, Straight Path Communications Inc. (“Straight Path”). The Company incurred legal fees and recorded offsetting gains from insurance claims related to this action in the three months ended October 31, 2023 and 2022. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

 

Write-off of Contingent Consideration Liability

 

In September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the Leaf acquisition would not be met. The Company recognized a gain on the write-off of this contingent consideration payment obligation.

 

19
 

 

Government Grants

 

In the three months ended October 31, 2022, Leaf received payments from government grants for the development and commercialization of blockchain-backed financial technologies.

 

Indemnification Claim

 

Beginning in June 2019, as part of a commercial resolution, the Company indemnified a cable telephony customer related to patent infringement claims brought against the customer. On May 8, 2023, the Company and the customer agreed to release the Company from the indemnification agreement in exchange for $3.9 million, which was recorded as an expense in the third quarter of fiscal 2023.

 

Note 11—Revolving Credit Facility

 

The Company’s subsidiary, IDT Telecom, Inc. (“IDT Telecom”), entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. As of July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At October 31, 2023 and July 31, 2023, there were no amounts outstanding under this facility. In the three months ended October 31, 2023 and 2022, IDT Telecom borrowed and repaid an aggregate of $30.3 million and nil, respectively, under the facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the secured overnight financing rate published by the Federal Reserve Bank of New York plus 10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, 2026. IDT Telecom pays a quarterly unused commitment fee on the average daily balance of the unused portion of the $25.0 million commitment of 30 to 85 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of October 31, 2023 and July 31, 2023, IDT Telecom was in compliance with all of the covenants.

 

Note 12—Equity

 

2024 Equity Incentive Plan

 

On October 26, 2023, the Company’s Board of Directors adopted the Company’s 2024 Equity Incentive Plan (the “2024 Plan”), which is intended to provide incentives to officers, employees, directors, and consultants of the Company, including stock options, stock appreciation rights, deferred stock units (“DSUs”), and restricted stock. The number of shares of the Company’s Class B common stock available for the grant of awards under the 2024 Plan will be 250,000 shares. The 2024 Plan is subject to approval by the Company’s stockholders at its annual meeting of stockholders on December 13, 2023. The Company’s current equity incentive plan, the 2015 Stock Option and Incentive Plan (the “2015 Plan”), is scheduled to expire on September 16, 2024.

 

2015 Stock Option and Incentive Plan

 

On October 11, 2023, the Company’s Board of Directors amended the Company’s 2015 Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 250,000 shares. The amendment is subject to approval by the Company’s stockholders at its annual meeting of stockholders on December 13, 2023.

 

In the three months ended October 31, 2023, the Company received cash from the exercise of stock options of $0.2 million for which the Company issued 12,500 shares of its Class B common stock. There were no stock option exercises in the three months ended October 31, 2022.

 

Stock Repurchases

 

The Company has an existing stock repurchase program authorized by its Board of Directors for the repurchase of shares of the Company’s Class B common stock. The Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the three months ended October 31, 2023, the Company repurchased 125,470 shares of its Class B common stock for an aggregate purchase price of $2.8 million. In the three months ended October 31, 2022, the Company repurchased 203,436 shares of its Class B common stock for an aggregate purchase price of $5.0 million. At October 31, 2023, 4.6 million shares remained available for repurchase under the stock repurchase program.

 

In the three months ended October 31, 2023 and 2022, the Company paid $15,000 and $0.3 million, respectively, to repurchase 654 and 13,403 shares, respectively, of the Company’s Class B common stock that were tendered by employees of the Company to satisfy the employees’ tax withholding obligations in connection with the vesting of DSUs, the lapsing of restrictions on restricted stock, and shares issued for bonus payments. Such shares were repurchased by the Company based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

 

20
 

 

Note 13—Redeemable Noncontrolling Interest

 

On September 29, 2021, NRS sold shares of its Class B common stock representing 2.5% of its outstanding capital stock on a fully diluted basis to Alta Fox Opportunities Fund LP (“Alta Fox”) for cash of $10 million. Alta Fox has the right to request that NRS redeem all or any portion of the NRS common shares that it purchased at the per share purchase price during a period of 182 days following the fifth anniversary of this transaction. The redemption right shall terminate upon the consummation of (i) a sale of NRS or its assets for cash or securities that are listed on a national securities exchange, (ii) a public offering of NRS’ securities, or (iii) a distribution of NRS’ capital stock following which NRS’ common shares are listed on a national securities exchange.

 

The shares of NRS’ Class B common stock sold to Alta Fox have been classified as mezzanine equity in the accompanying consolidated balance sheets because they may be redeemed at the option of Alta Fox, although the shares are not mandatorily redeemable. The carrying amount of the shares includes the noncontrolling interest in the net income of NRS. The net income attributable to the mezzanine equity’s noncontrolling interest during the periods were as follows:

  

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Net income of NRS attributable to the mezzanine equity’s noncontrolling interest  $107   $133 

 

Note 14— Earnings Per Share

 

Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

 

The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

  

           
    

Three Months Ended

October 31,

 
    2023    2022 
    (in thousands) 
Basic weighted-average number of shares   25,178    25,603 
Effect of dilutive securities:          
Stock options   3    12 
Non-vested restricted Class B common stock   96    1 
           
Diluted weighted-average number of shares   25,277    25,616 

 

There were no shares excluded from the calculation of diluted earnings per share in the three months ended October 31, 2023 and 2022.

 

21
 

 

Note 15—Accumulated Other Comprehensive Loss

 

The accumulated balances for each classification of other comprehensive income were as follows:

   

   Unrealized Loss on Available-for-Sale Securities   Foreign Currency Translation   Accumulated Other Comprehensive Loss 
   (in thousands) 
Balance, July 31, 2023  $ (645)  $(16,547)  $(17,192)
Other comprehensive (loss) income attributable to IDT Corporation   (66)   631    565 
                
Balance, October 31, 2023  $(711)  $(15,916)  $(16,627)

 

Note 16—Commitments and Contingencies

 

COVID-19

 

In May 2023, the World Health Organization declared an end to COVID-19 as a public health emergency. As of the date of this Quarterly Report, the Company continues to monitor the situation. The Company cannot predict with certainty the potential impact of COVID-19 if it re-invigorates on the Company’s results of operations, financial condition, or cash flows.

Legal Proceedings

 

On July 5, 2017, plaintiff JDS1, LLC, on behalf of itself and all other similarly situated stockholders of Straight Path, and derivatively on behalf of Straight Path as nominal defendant, filed a putative class action and derivative complaint in the Court of Chancery of the State of Delaware against the Company, The Patrick Henry Trust (a trust formed by Howard S. Jonas that held record and beneficial ownership of certain shares of Straight Path he formerly held), Howard S. Jonas, and each of Straight Path’s directors. The complaint alleged that the Company aided and abetted Straight Path Chairman of the Board and Chief Executive Officer Davidi Jonas, and Howard S. Jonas in his capacity as controlling stockholder of Straight Path, in breaching their fiduciary duties to Straight Path in connection with the settlement of claims between Straight Path and the Company related to potential indemnification claims concerning Straight Path’s obligations under the Consent Decree it entered into with the Federal Communications Commission (“FCC”), as well as the sale of Straight Path’s subsidiary Straight Path IP Group, Inc. to the Company in connection with that settlement. That action was consolidated with a similar action that was initiated by The Arbitrage Fund. The Plaintiffs sought, among other things, (i) a declaration that the action may be maintained as a class action or in the alternative, that demand on the Straight Path Board is excused; (ii) that the term sheet is invalid; (iii) awarding damages for the unfair price stockholders received in the merger between Straight Path and Verizon Communications Inc. for their shares of Straight Path’s Class B common stock; and (iv) ordering Howard S. Jonas, Davidi Jonas, and the Company to disgorge any profits for the benefit of the class Plaintiffs. On August 28, 2017, the Plaintiffs filed an amended complaint. The trial was held in August and December 2022, and closing arguments were presented on May 3, 2023. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

 

In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, the Company believes that none of the other legal proceedings to which the Company is a party will have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

 

Sales Tax Contingency

 

On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. It is possible that one or more jurisdictions may assert that the Company has liability for periods for which it has not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect the Company’s business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to the Company’s operations, and if such changes were made it could materially and adversely affect the Company’s business, financial position, and operating results.

 

Regulatory Fees Audit

 

  The Company’s 2017 FCC Form 499-A, which reports its calendar year 2016 revenue, was audited by the Universal Service Administrative Company (“USAC”). The USAC’s final decision imposed a $2.9 million charge on the Company for the Federal Telecommunications Relay Service (“TRS”) Fund. The Company has appealed the USAC’s final decision to the FCC and does not intend to remit payment for the TRS Fund fees unless and until a negative decision on its appeal has been issued. The Company has made certain changes to its filing policies and procedures for years that remain potentially under audit. At October 31, 2023 and July 31, 2023, the Company’s accrued expenses included $23.9 million and $26.8 million, respectively, for FCC-related regulatory fees for the year covered by the audit, as well as prior and subsequent years.

 

22
 

 

Purchase Commitments

 

At October 31, 2023, the Company had purchase commitments of $18.6 million primarily for equipment and services.

Performance Bonds

 

The Company has performance bonds issued through third parties for the benefit of various states in order to comply with the states’ financial requirements for money remittance licenses and telecommunications resellers. At October 31, 2023, the Company had aggregate performance bonds of $29.0 million outstanding.

 

Note 17—Other Expense, Net

 

Other expense, net consists of the following:

  

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Foreign currency transaction losses  $(3,499)  $(1,030)
Equity in net loss of investee   (1,012)   (652)
Losses on investments   (917)   (1,941)
Other   (158)   (219)
           
Total  $(5,586)  $(3,842)

 

Note 18—Income Taxes

 

The Company’s income tax expense in the three months ended October 31, 2023 was based on an effective tax rate of 31.8% compared to 27.0% for fiscal 2023. The change in the estimated effective tax rate was mainly due to differences in the amount of taxable income earned in the various taxing jurisdictions.

 

Note 19—Recently Issued Accounting Standards Not Yet Adopted

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2024 applied retrospectively to all prior periods presented. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.

 

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, that clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU also requires specific disclosures related to equity securities that are subject to contractual sales restrictions. The Company will adopt the amendments in this ASU prospectively on August 1, 2024. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.

 

23
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended July 31, 2023, as filed with the U.S. Securities and Exchange Commission (or SEC).

 

As used below, unless the context otherwise requires, the terms “the Company,” “IDT,” “we,” “us,” and “our” refer to IDT Corporation, a Delaware corporation, its predecessor, International Discount Telecommunications, Corp., a New York corporation, and their subsidiaries, collectively.

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks, and uncertainties that could result in those differences include, but are not limited to, those discussed under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended July 31, 2023. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the fiscal year ended July 31, 2023.

 

Recently Issued Accounting Standards Not Yet Adopted

 

In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker, or CODM, and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2024 applied retrospectively to all prior periods presented. We are evaluating the impact that this ASU will have on our consolidated financial statements.

 

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, that clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU also requires specific disclosures related to equity securities that are subject to contractual sales restrictions. We will adopt the amendments in this ASU prospectively on August 1, 2024. We are evaluating the impact that this ASU will have on our consolidated financial statements.

 

Results of Operations

 

We evaluate the performance of our business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

 

As of October 31, 2023, we owned 90.0% of the outstanding shares of our subsidiary, net2phone 2.0, Inc., or net2phone 2.0, which owns and operates the net2phone segment, and 80.0% of the outstanding shares of National Retail Solutions, or NRS, and, on a fully diluted basis assuming all the vesting criteria related to various rights granted have been met and other assumptions, we would own 85.8% of net2phone 2.0 and 77.7% of NRS.

 

As of August 1, 2023, we include depreciation and amortization in “Direct cost of revenues” and “Selling, general and administrative” expense. Prior to August 1, 2023, depreciation and amortization was a separate caption in the consolidated statements of income. In addition, as of August 1, 2023, we are reporting gross profit and gross margin percentage in our “Results of Operations.” Depreciation and amortization expense of $4.8 million in the three months ended October 31, 2022 was reclassified to conform to the current year’s presentation as follows: $1.0 million was reclassified to “Direct cost of revenues” and $3.8 million was reclassified to “Selling, general and administrative” expense. Depreciation and amortization expense included in our business segments was as follows:

 

(in millions)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Corporate   Total 
Three Months Ended October 31, 2023                        
Depreciation and amortization:                              
Included in “Direct cost of revenues”  $0.5   $—   $0.6   $0.2   $—   $1.3 
Included in “Selling, general and administrative expense”   0.3    0.7    0.8    2.0    —    3.8 
                               
Three Months Ended October 31, 2022                              
Depreciation and amortization:                              
Included in “Direct cost of revenues”  $0.3   $—   $0.5   $0.2   $—   $1.0 
Included in “Selling, general and administrative expense”   0.2    0.6    0.9    2.1    —    3.8 

 

COVID-19

 

In May 2023, the World Health Organization declared an end to COVID-19 as a public health emergency. As of the date of this Quarterly Report, we continue to monitor the situation. We cannot predict with certainty the potential impact of COVID-19 if it re-invigorates on our results of operations, financial condition, or cash flows.

 

Explanation of Performance Metrics

 

Our results of operations discussion include the following performance metrics:

 

  ● for NRS, active point-of-sale, or POS, terminals, payment processing accounts, and recurring revenue,
  ● for net2phone, seats and subscription revenue, and
  ● for Traditional Communications, minutes of use.

 

24
 

 

NRS uses two key metrics, among others, to measure the size of its customer base: active POS terminals and payment processing accounts. Active POS terminals are the number of POS terminals that have completed at least one transaction in the calendar month. It excludes POS terminals that have not been fully installed by the end of the month. Payment processing accounts are NRS PAY accounts that can generate revenue. It excludes accounts that have been approved but not activated. NRS’ recurring revenue is NRS’ revenue in accordance with U.S. GAAP excluding its revenue from POS terminal sales.

 

net2phone’s cloud communications offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. net2phone’s subscription revenue is its revenue in accordance with U.S. GAAP excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil.

 

The trends and comparisons between periods for the number of active POS terminals, NRS PAY accounts, seats served, recurring revenue, and subscription revenue are used in the analysis of NRS’ or net2phone’s revenues and direct cost of revenues and are strong indications of the top-line growth and performance of the business.

 

Minutes of use is a nonfinancial metric that measures aggregate customer usage during a reporting period. Minutes of use is an important factor in BOSS Revolution Calling’s and IDT Global’s revenue recognition since satisfaction of our performance obligation occurs when the customer uses our service. Minutes of use trends and comparisons between periods are used in the analysis of revenues and direct cost of revenues.

 

Three Months Ended October 31, 2023 Compared to Three Months Ended October 31, 2022

 

National Retail Solutions Segment

 

NRS, which represented 8.0% and 6.0% of our total revenues in the three months ended October 31, 2023 and 2022, respectively, is an operator of a nationwide POS network providing independent retailers with store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.

 

  

Three months ended

October 31,

   Change 
   2023   2022   $/#   % 
   (in millions) 
Revenues:                    
Recurring  $22.4   $17.8   $4.6    24.2%
Other   1.6    1.5    0.1    1.4 
                     
Total revenues   24.0    19.3    4.7    24.2 
Direct cost of revenues   (3.1)   (2.3)   0.8    35.1 
Gross profit   20.9    17.0    3.9    22.8 
Selling, general and administrative   (15.4)   (11.8)   3.6    30.9 
                     
Income from operations  $5.5   $5.2   $0.3    4.4%
Gross margin percentage   87.1%   88.1%   (1.0)%     

 

   October 31,   Change 
   2023   2022   #   % 
   (in thousands) 
Active POS terminals   27.2    20.8    6.4    31%
Payment processing accounts   17.1    11.3    5.8    51%

 

Revenues. Revenues increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 driven primarily by revenue growth from NRS’ merchant services, as well as the expansion of NRS’ POS network.

 

Direct Cost of Revenues. Direct cost of revenues increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to the increase in the direct costs of NRS’ POS terminal sales.

 

  Selling, General and Administrative. Selling, general and administrative expense increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to increases in sales commissions and employee compensation. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense increased to 64.3% from 61.0% in the three months ended October 31, 2023 and 2022, respectively.

   

25
 

 

Fintech Segment

 

Fintech, which represented 8.8% and 6.2% of our total revenues in the three months ended October 31, 2023 and 2022, respectively, is comprised of BOSS Money, a provider of international money remittance and related value/payment transfer services, as well as other, significantly smaller, financial services businesses, including Leaf Global Fintech Corporation, or Leaf, a provider of digital wallet services in emerging markets, a variable interest entity, or VIE, that operates money transfer businesses, and IDT Financial Services Limited, or IDT Financial Services, our Gibraltar-based bank.

 

  

Three months ended

October 31,

   Change 
   2023   2022   $/#   % 
   (in millions) 
Revenues:                    
BOSS Money  $24.3   $17.6   $6.7    38.1%
Other   2.3    2.3    —    (0.4)
                     
Total revenues   26.6    19.9    6.7    33.6 
Direct cost of revenues   (11.8)   (8.3)   3.5    41.2 
Gross profit   14.8    11.6    3.2    28.1 
Selling, general and administrative   (16.2)   (11.7)   4.5    39.0 
Other operating gain   —    1.6    (1.6)   (100.0)
                     
(Loss) income from operations  $(1.4)  $1.5   $(2.9)   (191.5)%
Gross margin percentage   55.9%   58.2%   (2.3)%     

 

Revenues. Revenues from BOSS Money increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily because of increased transaction volume in BOSS Money’s retail and digital channels. BOSS Money continues to benefit from the ongoing expansion of its retail agent network and cross-marketing to BOSS Revolution Calling customers.

 

Direct Cost of Revenues. Direct cost of revenues increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to an increase BOSS Money’s direct cost of revenues, which reflected the increase in BOSS Money’s revenue.

 

Selling, General and Administrative. Selling, general and administrative expense increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to increases in debit and credit card processing charges, employee compensation, and bank fees. The increase in card processing charges was the result of increased credit and debit card transactions through our BOSS Money app and other digital channels. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense increased to 61.1% from 58.7% in the three months ended October 31, 2023 and 2022, respectively.

 

Other Operating Gain. In September 2022, we determined that the requirements for a portion of the contingent consideration payments related to the Leaf acquisition would not be met. We recognized a gain of $1.6 million on the write-off of this contingent consideration payment obligation.

 

26
 

 

net2phone Segment

 

The net2phone segment, which represented 6.6% and 5.3% of our total revenues in the three months ended October 31, 2023 and 2022, respectively, is comprised of net2phone’s cloud communications and contact center offerings.

 

  

Three months ended

October 31,

   Change 
   2023   2022   $/#   % 
   (in millions) 
Revenues:                    
Subscription  $18.5   $15.5   $3.0    19.0%
Other   1.4    1.4    —    1.6 
                     
Total revenues   19.9    16.9    3.0    17.6 
Direct cost of revenues   (3.8)   (3.3)   0.5    13.8 
Gross profit   16.1    13.6    2.5    18.5 
Selling, general and administrative   (16.1)   (14.7)   1.4    10.0 
                     
Loss from operations  $—   $(1.1)  $1.1    99.3%
Gross margin percentage   80.9%   80.3%   0.6%     

 

   October 31,   Change 
   2023   2022   #   % 
    (in thousands)  
Seats served   364   309    55    18%

 

Revenues. net2phone’s revenues increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 driven primarily by the growth in subscription revenue in the U.S. and Latin American markets, which reflected the increase in seats served at October 31, 2023 compared to October 31, 2022.

 

Direct Cost of Revenues. Direct cost of revenues increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to the increase in revenues, with the largest increase in the U.S. markets. net2phone’s focus on mid-sized businesses, multi-channel strategies, and localized offerings generated revenue growth that exceeded the increase in direct cost of revenues.

 

Selling, General and Administrative. Selling, general and administrative expense increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to increases in sales commissions, employee compensation, and consulting expense. As a percentage of net2phone’s revenues, net2phone’s selling, general and administrative expense decreased to 81.0% from 86.5% in the three months ended October 31, 2023 and 2022, respectively.

 

net2phone derives a significant portion of its revenues from existing customers. Attracting new customers usually involves additional costs compared to retention of existing customers. If existing customers’ subscriptions and related usage decrease or are terminated, net2phone will need to spend more money to acquire new customers and still may not be able to maintain its existing level of revenues or profitability. In addition, net2phone needs to acquire new customers to increase its revenues. net2phone incurs significant sales and marketing expenses to acquire new customers. It is therefore expected that selling, general and administrative expense will remain a significant percentage of net2phone’s revenues for the foreseeable future.

 

Traditional Communications Segment

 

The Traditional Communications segment, which represented 76.6% and 82.5% of our total revenues in the three months ended October 31, 2023 and 2022, respectively, includes IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts, BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada, and IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

 

27
 

 

Traditional Communications’ most significant revenue streams are from IDT Digital Payments, BOSS Revolution Calling, and IDT Global. IDT Digital Payments and BOSS Revolution Calling are sold directly to consumers and through distributors and retailers. We receive payments for BOSS Revolution Calling, traditional calling cards, and IDT Digital Payments prior to providing the services. We recognize the revenue when services are provided to the customer. Traditional Communications’ revenues tend to be somewhat seasonal, with the second fiscal quarter (which contains Christmas and New Year’s Day) and the fourth fiscal quarter (which contains Mother’s Day and Father’s Day) typically showing higher minute volumes.

 

  

Three months ended

October 31,

   Change 
  

2023

  

2022

  

$/#

  

%

 
   (in millions) 
Revenues:                    
IDT Digital Payments  $100.0   $109.0   $(9.0)   (8.3)%
BOSS Revolution Calling   71.2    86.3    (15.1)   (17.4)
IDT Global   52.0    61.6    (9.6)   (15.5)
Other   7.5    8.8    (1.3)   (14.6)
                     
Total revenues   230.7    265.7    (35.0)   (13.2)
Direct cost of revenues   (188.1)   (218.8)   (30.7)   (14.0)
Gross profit   42.6    46.9    (4.3)   (9.3)
Selling, general and administrative   (26.7)   (29.5)   (2.8)   (9.9)
Severance   (0.5)   (0.1)   0.4    423.5 
                     
Income from operations  $15.4   $17.3   $(1.9)   (10.8)%
                     
Gross margin percentage   18.4%   17.7%   0.7%     
                     
Minutes of use:                    
BOSS Revolution Calling   496    626    (130)   (21)%
IDT Global   1,401    1,706    (305)   (18)%

 

Revenues. Revenues from IDT Digital Payments decreased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily from the deterioration of a key international corridor that was particularly impactful to revenues in the wholesale channel.

 

Revenues and minutes of use from BOSS Revolution Calling decreased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023. BOSS Revolution Calling continues to be impacted by persistent, market-wide trends, including the proliferation of unlimited calling plans offered by wireless carriers and mobile virtual network operators, and the increasing penetration of free and paid over-the-top voice, video conferencing, and messaging services.

 

Revenues and minutes of use from IDT Global decreased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 as communications globally continued to transition away from international voice calling. This trend was accelerated by the impact of COVID-19 as business communications shifted from calling to video conferencing and other collaboration platforms. We expect that IDT Global will continue to be adversely impacted by these trends, and minutes of use and revenues will likely continue to decline from quarter-to-quarter, as we seek to maximize economics rather than necessarily sustain minutes of use or revenues.

 

Direct Cost of Revenues. Direct cost of revenues decreased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to the decreases in minutes of use and revenues.

 

Selling, General and Administrative. Selling, general and administrative expense decreased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily due to decreases in employee compensation, sales commissions, marketing expense, and debit and credit card processing charges. As a percentage of Traditional Communications’ revenue, Traditional Communications’ selling, general and administrative expense increased to 11.5% from 11.1% in the three months ended October 31, 2023 and 2022, respectively.

 

Severance Expense. In the three months ended October 31, 2023 and 2022, Traditional Communications incurred severance expense of $0.5 million and $0.1 million, respectively.

 

28
 

 

Corporate

 

  

Three months ended

October 31,

   Change 
   2023   2022   $   % 
   (in millions) 
General and administrative  $(2.8)  $(1.9)  $0.9    44.3%
Other operating gain (expense), net   0.5    (0.8)   (1.3)   (161.4)
                     
Loss from operations  $(2.3)  $(2.7)  $0.4    15.2%

 

Corporate costs mainly include compensation, consulting fees, treasury, tax and accounting services, human resources, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.

 

General and Administrative. Corporate general and administrative expense increased in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 primarily because of increases in audit and accounting fees and employee compensation. As a percentage of our consolidated revenues, Corporate general and administrative expense was 0.9% and 0.6% in the three months ended October 31, 2023 and 2022, respectively.

 

  Other Operating Expense, net. As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path Communications Inc., or Straight Path. We incurred legal fees of $0.2 million and $2.5 million in the three months ended October 31, 2023 and 2022, respectively, related to this action. Also, we recorded offsetting gains from insurance claims for this matter of $0.7 million and $1.7 million in the three months ended October 31, 2023 and 2022, respectively. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

   

Consolidated

 

The following is a discussion of our consolidated stock-based compensation expense, and our consolidated income and expense line items below income from operations.

 

Stock-Based Compensation Expense. Stock-based compensation expense included in consolidated selling, general and administrative expense was $0.8 million and $0.6 million in the three months ended October 31, 2023 and 2022, respectively. The increase in stock-based compensation expense was primarily due to the grant in fiscal 2023 of deferred stock units, or DSUs, that, upon vesting, will entitle the grantees to receive shares of our Class B common stock. We estimated that the fair value of the DSUs on the date of grants was an aggregate of $5.4 million, which is being recognized on a graded vesting basis over the requisite service periods ending in February 2025. At October 31, 2023, there was $1.6 million of total unrecognized compensation cost related to non-vested DSUs.

 

Effective as of June 30, 2022, restricted shares of NRS’ Class B common stock were granted to certain NRS employees. The restrictions on the shares will lapse in three installments on each of June 1, 2024, 2026, and 2027. The estimated fair value of the restricted shares on the grant date was $3.3 million, which is being recognized over the vesting period. At October 31, 2023, unrecognized compensation cost related to NRS’ non-vested Class B common stock was an aggregate of $2.4 million. The unrecognized compensation cost is expected to be recognized over the remaining vesting period that ends in fiscal 2027.

 

  

Three months ended

October 31,

   Change 
   2023   2022   $   % 
   (in millions) 
Income from operations  $17.2   $20.2   $(3.0)   (15.1)%
Interest income, net   0.8    0.5    0.3    65.8 
Other expense, net   (5.6)   (3.8)   (1.8)   (45.4)
Provision for income taxes   (3.9)   (4.3)   0.4    9.0 
                     
Net income   8.5    12.6    (4.1)   (32.5)
Net income attributable to noncontrolling interests   (0.8)   (1.6)   0.8    47.4 
                     
Net income attributable to IDT Corporation  $7.7   $11.0   $(3.3)   (30.4)%

 

29
 

    

Other Expense, net. Other expense, net consists of the following:

 

  

Three months ended

October 31,

 
   2023   2022 
   (in millions) 
Foreign currency transaction losses  $(3.5)  $(1.0)
Equity in the net loss of investee   (1.0)   (0.7)
Losses on investments   (0.9)   (1.9)
Other   (0.2)   (0.2)
           
Total  $(5.6)  $(3.8)

 

We have an investment in shares of convertible preferred stock of a communications company (the equity method investee, or EMI). As of October 31, 2023 and 2022, our ownership was 33.3% and 26.57%, respectively, of the EMI’s outstanding shares on an as converted basis. We account for this investment using the equity method since we can exercise significant influence over the operating and financial policies of the EMI but do not have a controlling interest. We determined that on the dates of the acquisitions of the EMI’s shares, there were differences between our investment in the EMI and our proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to our interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. “Equity in the net loss of investee” includes the amortization of equity method basis difference.

 

Provision for Income Taxes. The change in income tax expense in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 was primarily due to differences in the amount of taxable income earned in the various taxing jurisdictions.

 

Net Income Attributable to Noncontrolling Interests. The change in the net income attributable to noncontrolling interests in the three months ended October 31, 2023 compared to the similar period in fiscal 2023 was primarily due to changes in amounts attributable to the noncontrolling interests in NRS, net2phone 2.0, and the VIE.

 

Liquidity and Capital Resources

 

  As of the date of this Quarterly Report, we expect our cash flow from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on October 31, 2023 will be sufficient to meet our currently anticipated working capital and capital expenditure requirements during the twelve-month period ending October 31, 2024.

   

At October 31, 2023, we had cash, cash equivalents, debt securities, and current equity investments of $159.7 million and working capital (current assets in excess of current liabilities) of $106.2 million.

 

We treat unrestricted cash and cash equivalents held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC as substantially restricted and unavailable for other purposes. At October 31, 2023, “Cash and cash equivalents” in our consolidated balance sheet included an aggregate of $35.1 million held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC that was unavailable for other purposes.

 

Contractual Obligations and Commitments

 

  The following table includes our anticipated material cash requirements from contractual obligations and other commitments at October 31, 2023:

   

Payments Due by Period (in millions)  Total  

Less than

1 year

   1–3 years   4–5 years  

After

5 years

 
Purchase commitments  $18.6   $18.6   $—   $—   $— 
Connectivity obligations under service agreements   0.7    0.6    0.1    —    — 
Operating leases including short-term leases   6.5    3.7    2.6    0.2    — 
                          
Total (1)  $25.8   $22.9   $2.7   $0.2   $— 

 

  (1) The above table does not include up to $10 million for the potential redemption of shares of NRS’ Class B common stock, an aggregate of $29.0 million in performance bonds, and up to $8.8 million for other potential payments including contingent consideration related to business acquisitions, due to the uncertainty of the amount and/or timing of any such payments.

 

30
 

 

Consolidated Financial Condition

 

  

Three months ended

October 31,

 
   2023   2022 
   (in millions) 
Cash flows provided by (used in):          
Operating activities  $14.8   $18.2 
Investing activities   4.3    4.2 
Financing activities   (2.6)   (7.1)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents   (6.9)   (6.1)
Increase in cash, cash equivalents, and restricted cash and cash equivalents  $9.6   $9.2 

 

Operating Activities

 

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable.

 

Gross trade accounts receivable increased to $41.2 million at October 31, 2023 from $37.7 million at July 31, 2023 primarily due to amounts billed in the three months ended October 31, 2023 that were greater than collections during the period.

 

Deferred revenue arises from sales of prepaid products and varies from period to period depending on the mix and the timing of revenues. Deferred revenue decreased to $34.0 million at October 31, 2023 from $35.3 million at July 31, 2023 primarily due to decreases in the BOSS Revolution Calling and IDT Digital Payments deferred revenue balances.

 

Customer deposit liabilities at IDT Financial Services decreased to $79.5 million at October 31, 2023 from $86.5 million at July 31, 2023. Our restricted cash and cash equivalents included $80.1 million and $87.3 million at October 31, 2023 and July 31, 2023, respectively, held by the bank.

 

In September 2017, we and certain of our subsidiaries were certified by the New Jersey Economic Development Authority, or NJEDA, as having met the requirements of the Grow New Jersey Assistance Act Tax Credit Program. The program provides for credits against a corporation’s New Jersey corporate business tax liability for maintaining a minimum number of employees in New Jersey, and that tax credits may be sold subject to certain conditions. On June 5, 2023, we received a 2019 tax credit certificate for $1.8 million from the NJEDA. In August 2023, we sold the certificate for cash of $1.6 million.

 

On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect our business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to our operations, and if such changes were made it could materially and adversely affect our business, financial position, and operating results.

 

As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

 

31
 

 

Investing Activities

 

Our capital expenditures were $4.3 million and $5.2 million in the three months ended October 31, 2023 and 2022, respectively. We currently anticipate that total capital expenditures in the twelve-month period ending October 31, 2024 will be $21 million to $23 million. We expect to fund our capital expenditures with our net cash provided by operating activities and cash, cash equivalents, debt securities, and current equity investments on hand.

 

As of July 27, 2023, the EMI’s shareholders including us agreed to purchase additional shares of the EMI’s convertible preferred stock. We subscribed to purchase additional shares for an aggregate of $1.0 million. In the three months ended October 31, 2023, we paid $0.7 million to purchase a portion of the shares.

 

Purchases of debt securities and equity investments were $7.8 million and $2.1 million in the three months ended October 31, 2023 and 2022, respectively. Proceeds from maturities and sales of debt securities and redemptions of equity investments were $17.1 million and $11.5 million in the three months ended October 31, 2023 and 2022, respectively.

 

Financing Activities

 

We distributed cash of $0.1 million in both the three months ended October 31, 2023 and 2022 to the noncontrolling interests in certain of our subsidiaries.

 

In the three months ended October 31, 2023 and 2022, we received proceeds from financing-related other liabilities of $0.1 million and $0.3 million, respectively.

 

In the three months ended October 31, 2023 and 2022, we repaid financing-related other liabilities of $15,000 and $1.9 million, respectively.

 

Our subsidiary, IDT Telecom, Inc., or IDT Telecom, entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. As of July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At October 31, 2023 and July 31, 2023, there were no amounts outstanding under this facility. In the three months ended October 31, 2023 and 2022, IDT Telecom borrowed and repaid an aggregate of $30.3 million and nil, respectively, under the facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the secured overnight financing rate published by the Federal Reserve Bank of New York plus 10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, 2026. IDT Telecom pays a quarterly unused commitment fee on the average daily balance of the unused portion of the $25.0 million commitment of 30 to 85 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of October 31, 2023, IDT Telecom was in compliance with all of the covenants.

 

In the three months ended October 31, 2023, we received cash from the exercise of stock options of $0.2 million for which we issued 12,500 shares of our Class B common stock. There were no stock option exercises in the three months ended October 31, 2022.

 

We have an existing stock repurchase program authorized by our Board of Directors for the repurchase of shares of our Class B common stock. The Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the three months ended October 31, 2023, we repurchased 125,470 shares of Class B common stock for an aggregate purchase price of $2.8 million. In the three months ended October 31, 2022, we repurchased 203,436 shares of Class B common stock for an aggregate purchase price of $5.0 million. At October 31, 2023, 4.6 million shares remained available for repurchase under the stock repurchase program.

 

In the three months ended October 31, 2023 and 2022, we paid $15,000 and $0.3 million, respectively, to repurchase 654 and 13,403 shares, respectively, of our Class B common stock that were tendered by employees of ours to satisfy the employees’ tax withholding obligations in connection with the vesting of DSUs, the lapsing of restrictions on restricted stock, and shares issued for bonus payments. Such shares were repurchased by us based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

 

Other Sources and Uses of Resources

 

We are considering spin-offs and other potential dispositions of certain of our subsidiaries. Some of the transactions under consideration are in early stages and others are more advanced. A spin-off may include the contribution of a significant amount of cash, cash equivalents, debt securities, and/or equity securities to the subsidiary prior to the spin-off, which would reduce our capital resources. There is no assurance that any of these transactions will be completed.

 

We intend to, where appropriate, make strategic investments and acquisitions to complement, expand, and/or enter into new businesses. In considering acquisitions and investments, we search for opportunities to profitably grow our existing businesses and/or to add qualitatively to the range and diversification of businesses in our portfolio. We cannot guarantee that we will be presented with acquisition opportunities that meet our return-on-investment criteria, or that our efforts to make acquisitions that meet our criteria will be successful.

 

32
 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risks

 

Foreign Currency Risk

 

Revenues from our international operations were 26% and 28% of our consolidated revenues in the three months ended October 31, 2023 and 2022, respectively. A significant portion of our revenues is in currencies other than the U.S. Dollar. Our foreign currency exchange risk is somewhat mitigated by our ability to offset a portion of these non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign currency exchange rate changes at the end of each reporting period is generally not material.

 

Investment Risk

 

We hold a portion of our assets in debt and equity securities, including hedge funds, for strategic and speculative purposes. At October 31, 2023 and July 31, 2023, the value of our debt and equity security holdings was an aggregate of $46.2 million and $58.5 million, respectively, which represented 9% and 11% of our total assets at October 31, 2023 and July 31, 2023, respectively. Investments in debt and equity securities carry a degree of risk and depend to a great extent on correct assessments of the future course of price movements of securities and other instruments. There can be no assurance that our investment managers will be able to accurately predict these price movements. The securities markets have in recent years been characterized by great volatility and unpredictability. Accordingly, the value of our investments may go down as well as up and we may not receive the amounts originally invested upon redemption.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of October 31, 2023.

 

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the fiscal quarter ended October 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

33
 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Legal proceedings in which we are involved are described in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report.

 

Item 1A. Risk Factors

 

There are no material changes from the risk factors previously disclosed in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

The following table provides information with respect to purchases by us of our shares during the first quarter of fiscal 2024:

 

   Total Number of Shares Purchased   Average Price per Share   Total Number of Shares Purchased as part of Publicly Announced Plans or Programs   Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) 
August 1-31, 2023   32,772   $22.95    32,772    4,669,435 
September 1–30, 2023 (2)   61,178   $22.61    60,524    4,608,911 
October 1–31, 2023   32,174   $22.12    32,174    4,576,737 
                     
Total   126,124   $22.57    125,470      

 

(1)On January 22, 2016, our Board of Directors approved a stock repurchase program to purchase up to 8.0 million shares of our Class B common stock.
   
(2)Total number of shares purchased includes 654 shares of our Class B common stock that were tendered by an employee of ours to satisfy the employee’s tax withholding obligations in connection with the lapsing of restrictions on deferred stock units. Such shares were repurchased by us based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable

 

Item 5. Other Information

 

None

 

34
 

 

Item 6. Exhibits

 

Exhibit Number   Description
     
31.1*   Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
     
31.2*   Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
     
32.1*   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
     
32.2*   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
     
101.SCH*   Inline XBRL Taxonomy Extension Schema Document
     
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document
     
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

 

* Filed herewith.

 

35
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  IDT CORPORATION
     
December 11, 2023 By: /s/ SHMUEL JONAS
   

Shmuel Jonas

Chief Executive Officer

     
December 11, 2023 By: /s/ MARCELO FISCHER
   

Marcelo Fischer

Chief Financial Officer

 

36

 

 

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Shmuel Jonas, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of IDT Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: December 11, 2023

 

  /s/ SHMUEL JONAS
  Shmuel Jonas
  Chief Executive Officer

 

 

 

 

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Marcelo Fischer, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of IDT Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: December 11, 2023

 

  /s/ MARCELO FISCHER
  Marcelo Fischer
  Chief Financial Officer

 

 

 

 

EXHIBIT 32.1

 

Certification Pursuant to

18 U.S.C. Section 1350

(as Adopted Pursuant to Section 906 of

the Sarbanes-Oxley Act Of 2002)

 

In connection with the Quarterly Report of IDT Corporation (the “Company”) on Form 10-Q for the quarter ended October 31, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, Shmuel Jonas, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 11, 2023

 

  /s/ SHMUEL JONAS
  Shmuel Jonas
  Chief Executive Officer

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to IDT Corporation and will be retained by IDT Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

EXHIBIT 32.2

 

Certification Pursuant to

18 U.S.C. Section 1350

(as Adopted Pursuant to Section 906 of

the Sarbanes-Oxley Act Of 2002)

 

In connection with the Quarterly Report of IDT Corporation (the “Company”) on Form 10-Q for the quarter ended October 31, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, Marcelo Fischer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 11, 2023

 

  /s/ MARCELO FISCHER
  Marcelo Fischer
  Chief Financial Officer

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to IDT Corporation and will be retained by IDT Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

v3.23.3
Cover - shares
 3 Months Ended
Oct. 31, 2023
Dec. 07, 2023
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Oct. 31, 2023  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --07-31  
Entity File Number 1-16371  
Entity Registrant Name IDT CORPORATION  
Entity Central Index Key 0001005731  
Entity Tax Identification Number 22-3415036  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 520 Broad Street  
Entity Address, City or Town Newark  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 07102  
City Area Code (973)  
Local Phone Number 438-1000  
Title of 12(b) Security Class B common stock, par value $.01 per share  
Trading Symbol IDT  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Common Class A [Member]    
Entity Common Stock, Shares Outstanding   1,574,326
Common Class B [Member]    
Entity Common Stock, Shares Outstanding   23,586,304
v3.23.3
Consolidated Balance Sheets - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Current assets:    
Cash and cash equivalents $ 121,668 $ 103,637
Restricted cash and cash equivalents 86,785 95,186
Debt securities 33,242 42,414
Equity investments 4,761 6,198
Trade accounts receivable, net of allowance for credit losses of $5,909 at October 31, 2023 and allowance for doubtful accounts of $5,642 at July 31, 2023 35,328 32,092
Settlement assets, net of reserve of $1,469 at October 31, 2023 and $1,143 at July 31, 2023 18,122 32,396
Disbursement prefunding 35,733 30,113
Prepaid expenses 19,502 16,638
Other current assets 27,034 28,394
Total current assets 382,175 387,068
Property, plant, and equipment, net 38,802 38,655
Goodwill 26,311 26,457
Other intangibles, net 7,215 8,196
Equity investments 8,150 9,874
Operating lease right-of-use assets 4,910 5,540
Deferred income tax assets, net 20,539 24,101
Other assets 10,944 10,919
Total assets 499,046 510,810
Current liabilities:    
Trade accounts payable 24,469 22,231
Accrued expenses 100,107 110,796
Deferred revenue 34,042 35,343
Customer deposits 79,541 86,481
Settlement liabilities 19,268 21,495
Other current liabilities 18,507 17,761
Total current liabilities 275,934 294,107
Operating lease liabilities 2,346 2,881
Other liabilities 3,220 3,354
Total liabilities 281,500 300,342
Commitments and contingencies
Redeemable noncontrolling interest 10,579 10,472
IDT Corporation stockholders’ equity:    
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued
Additional paid-in capital 302,351 301,408
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,279 and 4,152 shares of Class B common stock at October 31, 2023 and July 31, 2023, respectively (118,312) (115,461)
Accumulated other comprehensive loss (16,627) (17,192)
Retained earnings 32,321 24,662
Total IDT Corporation stockholders’ equity 200,045 193,729
Noncontrolling interests 6,922 6,267
Total equity 206,967 199,996
Total liabilities, redeemable noncontrolling interest, and equity 499,046 510,810
Common Class A [Member]    
IDT Corporation stockholders’ equity:    
Common stock, value 33 33
Common Class B [Member]    
IDT Corporation stockholders’ equity:    
Common stock, value $ 279 $ 279
v3.23.3
Consolidated Balance Sheets (Parenthetical) - USD ($)
shares in Thousands, $ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Allowance for doubtful accounts receivable current $ 5,909 $ 5,642
Settlement assets, net of reserve $ 1,469 $ 1,143
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 10,000 10,000
Preferred stock, shares issued 0 0
Common Class A [Member]    
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 35,000 35,000
Common stock, shares issued 3,272 3,272
Common stock, shares outstanding 1,574 1,574
Treasury stock shares 1,698 1,698
Common Class B [Member]    
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 200,000 200,000
Common stock, shares issued 27,865 27,851
Common stock, shares outstanding 23,586 23,699
Treasury stock shares 4,279 4,152
v3.23.3
Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Income Statement [Abstract]    
Revenues $ 301,205 $ 321,816
Direct cost of revenues 206,777 232,670
Gross profit 94,428 89,146
Operating expenses (gains):    
Selling, general and administrative [1] 77,222 69,620
Severance 525 100
Other operating gain, net (see Note 10) (484) (800)
Total operating expenses 77,263 68,920
Income from operations 17,165 20,226
Interest income, net 844 509
Other expense, net (5,586) (3,842)
Income before income taxes 12,423 16,893
Provision for income taxes (3,947) (4,338)
Net income 8,476 12,555
Net income attributable to noncontrolling interests (817) (1,553)
Net income attributable to IDT Corporation $ 7,659 $ 11,002
Earnings per share attributable to IDT Corporation common stockholders:    
Basic $ 0.30 $ 0.43
Diluted $ 0.30 $ 0.43
Weighted-average number of shares used in calculation of earnings per share:    
Basic 25,178 25,603
Diluted 25,277 25,616
[1] Stock-based compensation included in selling, general and administrative expense
v3.23.3
Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Income Statement [Abstract]    
Share based compensation [1] $ 771 $ 572
[1] Stock-based compensation included in selling, general and administrative expense
v3.23.3
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Income Statement [Abstract]    
Net income $ 8,476 $ 12,555
Change in unrealized loss on available-for-sale securities (66) (222)
Foreign currency translation adjustments 631 (145)
Other comprehensive income (loss) 565 (367)
Comprehensive income 9,041 12,188
Comprehensive income attributable to noncontrolling interests (817) (1,553)
Comprehensive income attributable to IDT Corporation $ 8,224 $ 10,635
v3.23.3
Consolidated Statements of Equity (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock [Member]
Common Class A [Member]
Common Stock [Member]
Common Class B [Member]
Additional Paid-in Capital [Member]
Treasury Stock, Common [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Noncontrolling Interest [Member]
BALANCE at Jul. 31, 2022 $ 170,637 $ 33 $ 277 $ 296,005 $ (101,565) $ (11,305) $ (15,830) $ 3,022
Repurchases of Class B common stock through repurchase program (5,006) (5,006)
Restricted Class B common stock purchased from employees (335) (335)
Stock-based compensation 572 1 571
Distributions to noncontrolling interests (99) (99)
Other comprehensive loss (367) (367)
Stock issued to certain executive officers for bonus payments 615 615
Net income 12,422 11,002 1,420
BALANCE at Oct. 31, 2022 178,439 33 278 297,191 (106,906) (11,672) (4,828) 4,343
BALANCE at Jul. 31, 2023 199,996 33 279 301,408 (115,461) (17,192) 24,662 6,267
Exercise of stock options 172 172
Repurchases of Class B common stock through repurchase program (2,836) (2,836)
Restricted Class B common stock purchased from employees (15) (15)
Stock-based compensation 771 771
Distributions to noncontrolling interests (55) (55)
Other comprehensive loss 565 565
Stock issued to certain executive officers for bonus payments              
Net income 8,369 7,659 710
BALANCE at Oct. 31, 2023 $ 206,967 $ 33 $ 279 $ 302,351 $ (118,312) $ (16,627) $ 32,321 $ 6,922
v3.23.3
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Operating activities    
Net income  $ 8,476 $ 12,555
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 5,047 4,790
Deferred income taxes 3,561 3,672
Provision for credit losses, doubtful accounts receivable, and reserve for settlement assets 759 430
Net unrealized loss from marketable securities 1,528 1,846
Stock-based compensation [1] 771 572
Other 897 756
Changes in assets and liabilities:    
Trade accounts receivable (4,572) 2,442
Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets 8,250 (4,380)
Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities (7,061) (6,970)
Customer deposits at IDT Financial Services Limited (Gibraltar-based bank) (2,326) 2,865
Deferred revenue (540) (394)
Net cash provided by operating activities 14,790 18,184
Investing activities    
Capital expenditures (4,322) (5,172)
Purchase of convertible preferred stock in equity method investment (672)
Purchases of debt securities and equity investments (7,750) (2,058)
Proceeds from maturities and sales of debt securities and equity investments 17,067 11,472
Net cash provided by investing activities 4,323 4,242
Financing activities    
Distributions to noncontrolling interests (55) (99)
Proceeds from other liabilities 100 300
Repayment of other liabilities (15) (1,916)
Proceeds from borrowings under revolving credit facility 30,315
Repayment of borrowings under revolving credit facility (30,315)
Proceeds from exercise of stock options 172
Repurchases of Class B common stock (2,851) (5,341)
Net cash used in financing activities (2,649) (7,056)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents (6,834) (6,157)
Net increase in cash, cash equivalents, and restricted cash and cash equivalents 9,630 9,213
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 198,823 189,562
Cash, cash equivalents, and restricted cash and cash equivalents at end of period 208,453 198,775
Supplemental Schedule of Non-Cash Financing Activities    
Stock issued to certain executive officers for bonus payments $ 615
[1] Stock-based compensation included in selling, general and administrative expense
v3.23.3
Basis of Presentation
 3 Months Ended
Oct. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation

Note 1—Basis of Presentation

 

The accompanying unaudited consolidated financial statements of IDT Corporation and its subsidiaries (the “Company” or “IDT”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2024. The balance sheet at July 31, 2023 has been derived from the Company’s audited financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

 

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2024 refers to the fiscal year ending July 31, 2024).

 

As of October 31, 2023, the Company owned 90.0% of the outstanding shares of its subsidiary, net2phone 2.0, Inc. (“net2phone 2.0”), which owns and operates the net2phone segment, and 80.0% of the outstanding shares of National Retail Solutions (“NRS”), and, on a fully diluted basis assuming all the vesting criteria related to various rights granted have been met and other assumptions, the Company would own 85.8% of net2phone 2.0 and 77.7% of NRS.

 

Reclassifications

 

As of August 1, 2023, the Company includes depreciation and amortization in “Direct cost of revenues” and “Selling, general and administrative” expense and is reporting gross profit in the consolidated statements of income. Prior to August 1, 2023, depreciation and amortization was a separate caption in the consolidated statements of income. Depreciation and amortization expense of $4.8 million in the three months ended October 31, 2022 was reclassified to conform to the current year’s presentation as follows: $1.0 million was reclassified to “Direct cost of revenues” and $3.8 million was reclassified to “Selling, general and administrative” expense.

 

In the consolidated statements of cash flows, cash provided by “Trade accounts receivable” in the three months ended October 31, 2022 of $2.7 million was reclassified to “Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets” to conform to the current year’s presentation.

 

Recently Adopted Accounting Standard

 

On August 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, that changed the impairment model for most financial assets and certain other instruments. For receivables, entities are required to use a new forward-looking current expected credit loss model to determine its allowance for credit losses, which replaced the allowance for doubtful accounts. When determining the allowance for credit losses for its trade accounts receivable, the Company considers the probability of recoverability of accounts receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates. The Company also considers future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks will be assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Account balances are written off against the allowance when it is determined that the receivable will not be recovered. For available-for-sale debt securities with unrealized losses, the concept of “other-than-temporary” impairment was replaced by a determination whether any impairment is a result of a credit loss or other factors. The portion of the unrealized loss that is the result of a credit loss is recognized as an allowance and a corresponding expense recorded in “Other expense, net” in the consolidated statements of income. Unrealized loss that is not the result of a credit loss is recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements, and it was not necessary to record a cumulative-effect adjustment to retained earnings as of August 1, 2023.

 
v3.23.3
Business Segment Information
 3 Months Ended
Oct. 31, 2023
Segment Reporting [Abstract]  
Business Segment Information

Note 2—Business Segment Information

 

The Company has four reportable business segments, NRS, Fintech, net2phone, and Traditional Communications.

 

The NRS segment is an operator of a nationwide point-of-sale (“POS”) network providing independent retailers with store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.

 

 

The Fintech segment is comprised of BOSS Money, a provider of international money remittance and related value/payment transfer services, as well as other, significantly smaller, financial services businesses, including Leaf Global Fintech Corporation (“Leaf”), a provider of digital wallet services in emerging markets, a variable interest entity that operates money transfer businesses, and IDT Financial Services Limited (“IDT Financial Services”), the Company’s Gibraltar-based bank.

 

The net2phone segment is comprised of net2phone’s cloud communications and contact center offerings.

 

The Traditional Communications segment includes IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts, BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada, and IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

 

The Company’s reportable segments are distinguished by types of service, customers, and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. There are no significant asymmetrical allocations to segments. The Company evaluates the performance of its business segments based primarily on income (loss) from operations.

 

Corporate costs mainly include compensation, consulting fees, treasury, tax and accounting services, human resources, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.

 

Operating results for the business segments of the Company were as follows:

 

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Corporate   Total 
Three Months Ended October 31, 2023                              
Revenues  $23,995   $26,563   $19,927   $230,720   $—   $301,205 
Income (loss) from operations   5,460    (1,383)   (7)   15,406    (2,311)   17,165 
Depreciation and amortization:                              
Included in “Direct cost of revenues”   

450

    22    600    184    

—

    

1,256

 
Included in “Selling, general and administrative expense”   

285

    

671

    

840

    

1,964

    31    

3,791

 
                               
Three Months Ended October 31, 2022                              
Revenues  $19,313   $19,887   $16,950   $265,666   $—   $321,816 
Income (loss) from operations   5,231    1,512    (1,056)   17,263    (2,724)   20,226 
Depreciation and amortization:                              
Included in “Direct cost of revenues”   

320

    

23

    

498

    

193

    

—

    1,034 
Included in “Selling, general and administrative expense”   

158

    

598

    

854

    

2,128

    

18

    

3,756

 

 
v3.23.3
Revenue Recognition
 3 Months Ended
Oct. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition

Note 3—Revenue Recognition

 

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications and payment offerings as well as wholesale international voice and SMS termination. BOSS Money, NRS, and net2phone are technology-driven, synergistic businesses that leverage the Company’s core assets. BOSS Money’s and NRS’ revenues are primarily recognized at a point in time, and net2phone’s revenue is mainly recognized over time. Traditional Communications are mostly minute-based, paid-voice communications services, and revenue is primarily recognized at a point in time. The Company’s most significant revenue streams are from IDT Digital Payments, BOSS Revolution Calling, and IDT Global. IDT Digital Payments and BOSS Revolution Calling are sold direct-to-consumer and through distributors and retailers.

 

Disaggregated Revenues

 

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
National Retail Solutions  $23,995   $19,313 
           
BOSS Money   24,239    17,554 
Other   2,324    2,333 
           
Total Fintech   26,563    19,887 
           
net2phone   19,927    16,950 
           
IDT Digital Payments   99,986    109,048 
BOSS Revolution Calling   71,222    86,253 
IDT Global   52,034    61,611 
Other   7,478    8,754 
           
Total Traditional Communications   230,720    265,666 
           
Total  $301,205   $321,816 

 

 

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location:

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Total 
Three Months Ended October 31, 2023                    
United States  $23,995   $25,834   $10,688   $162,998   $223,515 
Outside the United States:                         
United Kingdom   —    —    —    58,843    58,843 
Other   —    729    9,239    8,879    18,847 
                          
Total outside the United States   

—

    729    9,239    67,722    77,690 
                          
Total  $23,995   $26,563   $19,927   $230,720   $301,205 

 

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Total 
Three Months Ended October 31, 2022                    
United States  $19,313   $19,255   $8,802   $184,838   $232,208 
Outside the United States:                         
United Kingdom   —    —    —    68,940    68,940 
Other   —    632    8,148    11,888    20,668 
                          
Total outside the United States   —    632    8,148    80,828    89,608 
                          
Total  $19,313   $19,887   $16,950   $265,666   $321,816 

 

Remaining Performance Obligations

 

The following table includes revenue by business segment expected to be recognized in the future from performance obligations that were unsatisfied or partially unsatisfied as of October 31, 2023. The table excludes contracts that had an original expected duration of one year or less.

  Schedule of Estimated Revenue by Business Segment

(in thousands)  National Retail Solutions   net2phone   Total 
Twelve-month period ending October 31:            
2024  $5,740   $38,430   $44,170 
2025   4,767    19,092    23,859 
Thereafter   4,682    6,718    11,400 
                
Total  $15,189   $64,240   $79,429 

 

Accounts Receivable and Contract Balances

 

The timing of revenue recognition may differ from the time of billing to the Company’s customers. Trade accounts receivable in the Company’s consolidated balance sheets represent unconditional rights to consideration. The Company would record a contract asset when revenue is recognized in advance of its right to bill and receive consideration. The Company has not currently identified any contract assets.

 

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The Company’s contract liability balance is primarily payments received for prepaid BOSS Revolution Calling. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company’s consolidated balance sheets as “Deferred revenue”.

 

 

The following table presents information about the Company’s contract liability balance:

 

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period  $16,089   $17,906 

 

Deferred Customer Contract Acquisition and Fulfillment Costs

 

The Company recognizes as an asset its incremental costs of obtaining a contract with a customer that it expects to recover. The Company’s incremental costs of obtaining a contract with a customer are sales commissions paid to employees and third parties on sales to end users. If the amortization period were one year or less for the asset that would be recognized from deferring these costs, the Company applies the practical expedient whereby the Company charges these costs to expense when incurred. For net2phone sales, the Company defers these costs and amortizes them over the expected customer relationship period when it is expected to exceed one year.

 

The Company’s costs to fulfill its contracts do not meet the criteria to be recognized as an asset, therefore these costs are charged to expense as incurred.

 

The Company’s deferred customer contract acquisition costs were as follows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Deferred customer contract acquisition costs included in “Other current assets”  $4,180   $4,460 
Deferred customer contract acquisition costs included in “Other assets”   3,744    3,734 
           
Total  $7,924   $8,194 

 

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Amortization of deferred customer contract acquisition costs  $1,215   $1,176 

 

v3.23.3
Leases
 3 Months Ended
Oct. 31, 2023
Leases  
Leases

Note 4—Leases

 

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from less than one year to five years. net2phone also has operating leases for office equipment. Certain of these leases contain renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise any of these options.

 

net2phone is the lessee under equipment leases that are classified as finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

 

 

Supplemental disclosures related to the Company’s operating leases were as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Operating lease cost  $758   $767 
Short-term lease cost   326    269 
           
Total lease cost  $1,084   $1,036 
           
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows from operating leases  $791   $764 

 

 

  

October 31,
2023

  

July 31,
2023

 
Weighted-average remaining lease term-operating leases   2.1 years     2.3 years 
           
Weighted-average discount rate-operating leases   3.9%   3.7%

 

In the three months ended October 31, 2023 and 2022, the Company obtained right-of-use assets of $0.1 million and $0.4 million, respectively, in exchange for new operating lease liabilities.

 

The Company’s aggregate operating lease liability was as follows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Operating lease liabilities included in “Other current liabilities”  $2,732   $2,861 
Operating lease liabilities included in noncurrent liabilities   2,346    2,881 
           
Total  $5,078   $5,742 

 

Future minimum maturities of operating lease liabilities were as follows:

 

(in thousands)     
Twelve-month period ending October 31:     
2024  $2,883 
2025   1,713 
2026   478 
2027   220 
2028   12 
Thereafter   — 
      
Total lease payments   5,306 
Less imputed interest   (228)
      
Total operating lease liabilities  $5,078 

 
v3.23.3
Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents
 3 Months Ended
Oct. 31, 2023
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

Note 5—Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported in the consolidated balance sheets that equals the total of the same amounts reported in the consolidated statements of cash flows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Cash and cash equivalents  $121,668   $103,637 
Restricted cash and cash equivalents   86,785    95,186 
           
Total cash, cash equivalents, and restricted cash and cash equivalents  $208,453   $198,823 

 

At October 31, 2023 and July 31, 2023, restricted cash and cash equivalents included $80.1 million and $87.3 million, respectively, in restricted cash and cash equivalents for customer deposits held by IDT Financial Services. Certain of the electronic money financial services regulations in Gibraltar require IDT Financial Services to safeguard cash held for customer deposits, segregate cash held for customer deposits from any other cash that IDT Financial Services holds and utilize the cash only for the intended payment transaction.

 

 

Company Restricted Cash and Cash Equivalents

 

The Company treats unrestricted cash and cash equivalents held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC, which provide the Company’s international money transfer services in the United States, as substantially restricted and unavailable for other purposes. At October 31, 2023 and July 31, 2023, “Cash and cash equivalents” in the Company’s consolidated balance sheets included an aggregate of $35.1 million and $20.6 million, respectively, held by IDT Payment Services, Inc. and IDT Payment Services of New York, LLC, that was unavailable for other purposes.

 
v3.23.3
Debt Securities
 3 Months Ended
Oct. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Debt Securities

Note 6—Debt Securities

 

The following is a summary of available-for-sale debt securities:

  

  

Amortized Cost

  

Gross Unrealized Gains

  

Gross Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:                
Certificates of deposit*  $1,920   $—   $(3)  $1,917 
U.S. Treasury bills and notes   25,085    —    (141)   24,944 
Government sponsored enterprise notes   3,047    —    (3)   3,044 
Corporate bonds   3,901    —    (564)   3,337 
                     
Total  $33,953   $—   $(711)  $33,242 
                     
July 31, 2023:                    
Certificates of deposit*  $4,080   $—   $(4)  $4,076 
U.S. Treasury bills and notes   31,186    —    (148)   31,038 
Government sponsored enterprise notes   3,881    —    (8)   3,873 
Corporate bonds   3,912    —    (485)   3,427 
                     
Total  $43,059   $—   $(645)  $42,414 

 

*Each of the Company’s certificates of deposit has a CUSIP, was purchased in the secondary market through a broker and may be sold in the secondary market.

 

The gross unrealized losses in the table above are recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. As of October 31, 2023, the Company determined that the unrealized losses were due to changes in interest rates or market liquidity and were not due to credit losses. In addition, the Company does not intend to sell any of the securities with unrealized losses, and it is not more likely than not that the Company will be required to sell any of the securities with unrealized losses.

 

Proceeds from maturities and sales of debt securities and redemptions of equity investments were $17.1 million and $11.5 million in the three months ended October 31, 2023 and 2022, respectively. There were no realized gains or realized losses from sales of debt securities in the three months ended October 31, 2023 and 2022. The Company uses the specific identification method in computing the realized gains and realized losses on the sales of debt securities.

 

The contractual maturities of the Company’s available-for-sale debt securities at October 31, 2023 were as follows:

 

  

Fair Value

 
    (in thousands) 
Within one year  $26,185 
After one year through five years   5,904 
After five years through ten years   1,110 
After ten years   43 
      
Total  $33,242 

 

 

The following available-for-sale debt securities were in an unrealized loss position for which other-than-temporary impairments were not recognized:

  

  

Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:        
Certificates of deposit  $3   $1,917 
U.S. Treasury bills and notes   141    24,944 
Government sponsored enterprise notes   3    3,044 
Corporate bonds   564    3,337 
           
Total  $711   $33,242 
           
July 31, 2023:          
Certificates of deposit  $4   $3,356 
U.S. Treasury bills and notes   148    31,038 
Government sponsored enterprise notes   8    3,873 
Corporate bonds   485    3,368 
           
Total  $645   $41,635 

 

The following available-for-sale debt securities included in the table above were in a continuous unrealized loss position for 12 months or longer:

 

  

Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:        
U.S. Treasury bills and notes  $66   $639 
Corporate bonds   556    3,216 
           
Total  $622   $3,855 
           
July 31, 2023:          
U.S. Treasury bills and notes  $86   $816 
Corporate bonds   484    3,299 
           
Total  $570   $4,115 

 

At October 31, 2023 and July 31, 2023, the Company did not intend to sell any of the debt securities included in the table above, and it is not more likely than not that the Company will be required to sell any of these securities before recovery of the unrealized losses, which may be at maturity.

 
v3.23.3
Equity Investments
 3 Months Ended
Oct. 31, 2023
Cash and Cash Equivalents [Abstract]  
Equity Investments

Note 7—Equity Investments

 

Equity investments consist of the following:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Zedge, Inc. Class B common stock, 42,282 shares at October 31, 2023 and July 31, 2023  $81   $89 
Rafael Holdings, Inc. Class B common stock, 278,810 shares at October 31, 2023 and July 31, 2023   496    558 
Other marketable equity securities   281    1,497 
Fixed income mutual funds   3,903    4,054 
           
Current equity investments  $4,761   $6,198 
           
Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”)  $1,249   $1,263 
Convertible preferred stock—equity method investment   2,444    2,784 
Hedge funds   3,002    3,002 
Other   1,455    2,825 
           
Noncurrent equity investments  $8,150   $9,874 

 

Howard S. Jonas, the Chairman of the Company (an executive officer position) and the Chairman of the Company’s Board of Directors, is also the Vice-Chairman of the Board of Directors of Zedge, Inc. and the Chairman of the Board of Directors and Executive Chairman of Rafael Holdings, Inc.

 

 

The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Balance, beginning of period  $1,632   $1,501 
Adjustment for observable transactions involving a similar investment from the same issuer   (14)   (27)
Upward adjustment   

129

    

—

 
Impairments   —    — 
           
Balance, end of the period  $1,747   $1,474 

 

The Company decreased the carrying value of the shares of Visa Series C Preferred it held based on the fair value of Visa Class A common stock, including a discount for lack of current marketability, which is classified as “Adjustment for observable transactions involving a similar investment from the same issuer” in the table above. In addition, in connection with the acquisition of Regal Bancorp by SR Bancorp in September 2023, the Company adjusted the carrying value of its shares of Regal Bancorp common stock.

 

Unrealized losses for all equity investments measured at fair value included the following:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Net losses recognized during the period on equity investments  $(917)  $(1,941)
Plus: net losses recognized during the period on equity investments sold during the period   —    4 
           
Unrealized losses recognized during the period on equity investments still held at the reporting date  $(917)  $(1,937)

 

The unrealized gains and losses for all equity investments measured at fair value in the table above included the following:

 

         
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Unrealized losses recognized during the period on equity investments:        
         
Rafael Class B common stock  $(62)  $(72)
           
           
Zedge Class B common stock  $(8)  $(27)

 

Equity Method Investment

 

The Company has an investment in shares of convertible preferred stock of a communications company (the equity method investee, or “EMI”). As of both October 31, 2023 and July 31, 2023, the Company’s ownership was 33.3% of the EMI’s outstanding shares on an as converted basis. The Company accounts for this investment using the equity method since the Company can exercise significant influence over the operating and financial policies of the EMI but does not have a controlling interest.

 

The Company determined that on the dates of the acquisitions of the EMI’s shares, there were differences between its investment in the EMI and its proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to the Company’s interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. In the accompanying consolidated statements of income, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other expense, net” (see Note 17).

 

 

The following table summarizes the change in the balance of the Company’s equity method investment:

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Balance, beginning of period  $2,784   $1,001 
Purchase of convertible preferred stock   672    — 
Equity in the net loss of investee   (670)   (470)
Amortization of equity method basis difference   (342)   (182)
           
Balance, end of period  $2,444   $349 

 

Summarized financial information of the EMI was as follows:

   

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Revenues  $2,551   $1,873 
Costs and expenses:          
Direct cost of revenues   2,193    1,694 
Selling, general and administrative   2,093    1,636 
Total costs and expenses   4,286    3,330 
Loss from operations   (1,735)   (1,457)
Other expense, net   (104)   (344)
Net loss  $(1,839)  $(1,801)

 
v3.23.3
Fair Value Measurements
 3 Months Ended
Oct. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 8—Fair Value Measurements

 

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

 

   Level 1 (1)   Level 2 (2)   Level 3 (3)   Total 
   (in thousands) 
October 31, 2023                    
Debt securities  $24,944   $8,298   $—   $33,242 
Equity investments included in current assets   4,761    —    —    4,761 
Equity investments included in noncurrent assets   —    1,230    1,249    2,479 
                     
Total  $29,705   $9,528   $1,249   $40,482 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(1,834)  $(1,834)
Other noncurrent liabilities   —    —    (2,754)   (2,754)
                     
Total  $—   $—   $(4,588)  $(4,588)
                     
July 31, 2023                    
Debt securities  $31,038   $11,376   $—   $42,414 
Equity investments included in current assets   6,198    —    —    6,198 
Equity investments included in noncurrent assets   —    2,500    1,263    3,763 
                     
Total  $37,236   $13,876   $1,263   $52,375 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(2,032)  $(2,032)
Other noncurrent liabilities   —    —    (2,773)   (2,773)
                     
Total  $—   $—   $(4,805)  $(4,805)

 

(1)– quoted prices in active markets for identical assets or liabilities

 

(2)– observable inputs other than quoted prices in active markets for identical assets and liabilities

 

(3)– no observable pricing inputs in the market

 

 

At both October 31, 2023 and July 31, 2023, the Company had $3.0 million in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method, therefore they were not measured at fair value.

 

The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands)     
Balance, beginning of period  $1,263   $1,132 
Total losses included in “Other expense, net”   (14)   (27)
           
Balance, end of period  $1,249   $1,105 
           
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period  $—   $— 

 

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Balance, beginning of period  $4,805   $8,546 
Payments   (214)   (375)
Total gain included in:          
“Other operating gain, net”   —    (1,565)
“Foreign currency translation adjustment”   (3)   (3)
           
Balance, end of period  $4,588   $6,603 
           
Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period  $—   $— 

 

In the three months ended October 31, 2023, the Company paid an aggregate of $0.2 million in contingent consideration related to a prior acquisition. In the three months ended October 31, 2022, the Company paid an aggregate of $0.4 million in contingent consideration related to prior acquisitions. In addition, in September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the acquisition of Leaf would not be met. The Company recorded a gain of $1.6 million on the write-off of this contingent consideration payment obligation, which was included in “Other operating gain, net” in the accompanying consolidated statements of income.

 

Fair Value of Other Financial Instruments

 

  The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

 

  Cash and cash equivalents, restricted cash and cash equivalents, settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities. At October 31, 2023 and July 31, 2023, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash, cash equivalents, and restricted cash and cash equivalents were classified as Level 1 and settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities were classified as Level 2 of the fair value hierarchy.

 

  Other assets and other liabilities. At October 31, 2023 and July 31, 2023, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.

 

 
v3.23.3
Variable Interest Entity
 3 Months Ended
Oct. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entity

Note 9—Variable Interest Entity

 

The Company is the primary beneficiary of a variable interest entity (“VIE”) that operates money transfer businesses. The Company determined that, effective May 31, 2021, it had the power to direct the activities of the VIE that most significantly impact its economic performance, and the Company has the obligation to absorb losses of and the right to receive benefits from the VIE that could potentially be significant to it. As a result, the Company consolidates the VIE. The Company does not currently own any interest in the VIE and thus the net income incurred by the VIE was attributed to noncontrolling interests in the accompanying consolidated statements of income.

 

The VIE’s net income and aggregate funding provided by the Company were as follows:

           
   Three Months Ended
October 31,		 
   2023   2022 
   (in thousands) 
Net income of the VIE  $81   $140 
           
Aggregate funding provided by the Company, net  $114   $97 

 

 

The VIE’s summarized consolidated balance sheet amounts are as follows:

           
   October 31,
2023		   July 31,
2023		 
   (in thousands) 
Assets:          
Cash and equivalents  $1,881   $1,596 
Restricted cash   6,578    7,848 
Trade accounts receivable, net   23    62 
Disbursement prefunding   1,037    585 
Prepaid expenses   294    197 
Other current assets   383    317 
Property, plant, and equipment, net   219    272 
Other intangibles, net   699    737 
           
Total assets  $11,114   $11,614 
           
Liabilities and noncontrolling interests:          
Trade accounts payable  $—   $— 
Accrued expenses   86    70 
Settlement liabilities   6,882    7,573 
Due to the Company   140    26 
Accumulated other comprehensive income   1    21 
Noncontrolling interests   4,005    3,924 
           
Total liabilities and noncontrolling interests  $11,114   $11,614 

 

The VIE’s assets may only be used to settle the VIE’s obligations and may not be used for other consolidated entities. The VIE’s liabilities are non-recourse to the general credit of the Company’s other consolidated entities.

 
v3.23.3
Other Operating Gain, Net
 3 Months Ended
Oct. 31, 2023
Other Income and Expenses [Abstract]  
Other Operating Gain, Net

Note 10—Other Operating Gain, Net

 

The following table summarizes the other operating gain, net by business segment:

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Corporate—Straight Path Communications Inc. class action legal fees  $(212)  $(2,512)
Corporate—Straight Path Communications Inc. class action insurance claims   684    1,725 
Corporate—other   12    — 
Fintech—write-off of contingent consideration liability   —    1,565 
Fintech—government grants   —    33 
Traditional Communications—cable telephony customer indemnification claim   —    (11)
           
Total  $484   $800 

 

Straight Path Communications Inc. Class Action

 

As discussed in Note 16, the Company (as well as other defendants) was named in a class action on behalf of the stockholders of the Company’s former subsidiary, Straight Path Communications Inc. (“Straight Path”). The Company incurred legal fees and recorded offsetting gains from insurance claims related to this action in the three months ended October 31, 2023 and 2022. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

 

Write-off of Contingent Consideration Liability

 

In September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the Leaf acquisition would not be met. The Company recognized a gain on the write-off of this contingent consideration payment obligation.

 

 

Government Grants

 

In the three months ended October 31, 2022, Leaf received payments from government grants for the development and commercialization of blockchain-backed financial technologies.

 

Indemnification Claim

 

Beginning in June 2019, as part of a commercial resolution, the Company indemnified a cable telephony customer related to patent infringement claims brought against the customer. On May 8, 2023, the Company and the customer agreed to release the Company from the indemnification agreement in exchange for $3.9 million, which was recorded as an expense in the third quarter of fiscal 2023.

 
v3.23.3
Revolving Credit Facility
 3 Months Ended
Oct. 31, 2023
Debt Disclosure [Abstract]  
Revolving Credit Facility

Note 11—Revolving Credit Facility

 

The Company’s subsidiary, IDT Telecom, Inc. (“IDT Telecom”), entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. As of July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At October 31, 2023 and July 31, 2023, there were no amounts outstanding under this facility. In the three months ended October 31, 2023 and 2022, IDT Telecom borrowed and repaid an aggregate of $30.3 million and nil, respectively, under the facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the secured overnight financing rate published by the Federal Reserve Bank of New York plus 10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, 2026. IDT Telecom pays a quarterly unused commitment fee on the average daily balance of the unused portion of the $25.0 million commitment of 30 to 85 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of October 31, 2023 and July 31, 2023, IDT Telecom was in compliance with all of the covenants.

 
v3.23.3
Equity
 3 Months Ended
Oct. 31, 2023
Equity:  
Equity

Note 12—Equity

 

2024 Equity Incentive Plan

 

On October 26, 2023, the Company’s Board of Directors adopted the Company’s 2024 Equity Incentive Plan (the “2024 Plan”), which is intended to provide incentives to officers, employees, directors, and consultants of the Company, including stock options, stock appreciation rights, deferred stock units (“DSUs”), and restricted stock. The number of shares of the Company’s Class B common stock available for the grant of awards under the 2024 Plan will be 250,000 shares. The 2024 Plan is subject to approval by the Company’s stockholders at its annual meeting of stockholders on December 13, 2023. The Company’s current equity incentive plan, the 2015 Stock Option and Incentive Plan (the “2015 Plan”), is scheduled to expire on September 16, 2024.

 

2015 Stock Option and Incentive Plan

 

On October 11, 2023, the Company’s Board of Directors amended the Company’s 2015 Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 250,000 shares. The amendment is subject to approval by the Company’s stockholders at its annual meeting of stockholders on December 13, 2023.

 

In the three months ended October 31, 2023, the Company received cash from the exercise of stock options of $0.2 million for which the Company issued 12,500 shares of its Class B common stock. There were no stock option exercises in the three months ended October 31, 2022.

 

Stock Repurchases

 

The Company has an existing stock repurchase program authorized by its Board of Directors for the repurchase of shares of the Company’s Class B common stock. The Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the three months ended October 31, 2023, the Company repurchased 125,470 shares of its Class B common stock for an aggregate purchase price of $2.8 million. In the three months ended October 31, 2022, the Company repurchased 203,436 shares of its Class B common stock for an aggregate purchase price of $5.0 million. At October 31, 2023, 4.6 million shares remained available for repurchase under the stock repurchase program.

 

In the three months ended October 31, 2023 and 2022, the Company paid $15,000 and $0.3 million, respectively, to repurchase 654 and 13,403 shares, respectively, of the Company’s Class B common stock that were tendered by employees of the Company to satisfy the employees’ tax withholding obligations in connection with the vesting of DSUs, the lapsing of restrictions on restricted stock, and shares issued for bonus payments. Such shares were repurchased by the Company based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

 

 
v3.23.3
Redeemable Noncontrolling Interest
 3 Months Ended
Oct. 31, 2023
Noncontrolling Interest [Abstract]  
Redeemable Noncontrolling Interest

Note 13—Redeemable Noncontrolling Interest

 

On September 29, 2021, NRS sold shares of its Class B common stock representing 2.5% of its outstanding capital stock on a fully diluted basis to Alta Fox Opportunities Fund LP (“Alta Fox”) for cash of $10 million. Alta Fox has the right to request that NRS redeem all or any portion of the NRS common shares that it purchased at the per share purchase price during a period of 182 days following the fifth anniversary of this transaction. The redemption right shall terminate upon the consummation of (i) a sale of NRS or its assets for cash or securities that are listed on a national securities exchange, (ii) a public offering of NRS’ securities, or (iii) a distribution of NRS’ capital stock following which NRS’ common shares are listed on a national securities exchange.

 

The shares of NRS’ Class B common stock sold to Alta Fox have been classified as mezzanine equity in the accompanying consolidated balance sheets because they may be redeemed at the option of Alta Fox, although the shares are not mandatorily redeemable. The carrying amount of the shares includes the noncontrolling interest in the net income of NRS. The net income attributable to the mezzanine equity’s noncontrolling interest during the periods were as follows:

  

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Net income of NRS attributable to the mezzanine equity’s noncontrolling interest  $107   $133 

 
v3.23.3
Earnings Per Share
 3 Months Ended
Oct. 31, 2023
Earnings per share attributable to IDT Corporation common stockholders:  
Earnings Per Share

Note 14— Earnings Per Share

 

Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

 

The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

  

           
    

Three Months Ended

October 31,

 
    2023    2022 
    (in thousands) 
Basic weighted-average number of shares   25,178    25,603 
Effect of dilutive securities:          
Stock options   3    12 
Non-vested restricted Class B common stock   96    1 
           
Diluted weighted-average number of shares   25,277    25,616 

 

There were no shares excluded from the calculation of diluted earnings per share in the three months ended October 31, 2023 and 2022.

 

 
v3.23.3
Accumulated Other Comprehensive Loss
 3 Months Ended
Oct. 31, 2023
Equity:  
Accumulated Other Comprehensive Loss

Note 15—Accumulated Other Comprehensive Loss

 

The accumulated balances for each classification of other comprehensive income were as follows:

   

   Unrealized Loss on Available-for-Sale Securities   Foreign Currency Translation   Accumulated Other Comprehensive Loss 
   (in thousands) 
Balance, July 31, 2023  $ (645)  $(16,547)  $(17,192)
Other comprehensive (loss) income attributable to IDT Corporation   (66)   631    565 
                
Balance, October 31, 2023  $(711)  $(15,916)  $(16,627)

 
v3.23.3
Commitments and Contingencies
 3 Months Ended
Oct. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 16—Commitments and Contingencies

 

COVID-19

 

In May 2023, the World Health Organization declared an end to COVID-19 as a public health emergency. As of the date of this Quarterly Report, the Company continues to monitor the situation. The Company cannot predict with certainty the potential impact of COVID-19 if it re-invigorates on the Company’s results of operations, financial condition, or cash flows.

Legal Proceedings

 

On July 5, 2017, plaintiff JDS1, LLC, on behalf of itself and all other similarly situated stockholders of Straight Path, and derivatively on behalf of Straight Path as nominal defendant, filed a putative class action and derivative complaint in the Court of Chancery of the State of Delaware against the Company, The Patrick Henry Trust (a trust formed by Howard S. Jonas that held record and beneficial ownership of certain shares of Straight Path he formerly held), Howard S. Jonas, and each of Straight Path’s directors. The complaint alleged that the Company aided and abetted Straight Path Chairman of the Board and Chief Executive Officer Davidi Jonas, and Howard S. Jonas in his capacity as controlling stockholder of Straight Path, in breaching their fiduciary duties to Straight Path in connection with the settlement of claims between Straight Path and the Company related to potential indemnification claims concerning Straight Path’s obligations under the Consent Decree it entered into with the Federal Communications Commission (“FCC”), as well as the sale of Straight Path’s subsidiary Straight Path IP Group, Inc. to the Company in connection with that settlement. That action was consolidated with a similar action that was initiated by The Arbitrage Fund. The Plaintiffs sought, among other things, (i) a declaration that the action may be maintained as a class action or in the alternative, that demand on the Straight Path Board is excused; (ii) that the term sheet is invalid; (iii) awarding damages for the unfair price stockholders received in the merger between Straight Path and Verizon Communications Inc. for their shares of Straight Path’s Class B common stock; and (iv) ordering Howard S. Jonas, Davidi Jonas, and the Company to disgorge any profits for the benefit of the class Plaintiffs. On August 28, 2017, the Plaintiffs filed an amended complaint. The trial was held in August and December 2022, and closing arguments were presented on May 3, 2023. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

 

In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, the Company believes that none of the other legal proceedings to which the Company is a party will have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

 

Sales Tax Contingency

 

On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. It is possible that one or more jurisdictions may assert that the Company has liability for periods for which it has not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect the Company’s business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to the Company’s operations, and if such changes were made it could materially and adversely affect the Company’s business, financial position, and operating results.

 

Regulatory Fees Audit

 

  The Company’s 2017 FCC Form 499-A, which reports its calendar year 2016 revenue, was audited by the Universal Service Administrative Company (“USAC”). The USAC’s final decision imposed a $2.9 million charge on the Company for the Federal Telecommunications Relay Service (“TRS”) Fund. The Company has appealed the USAC’s final decision to the FCC and does not intend to remit payment for the TRS Fund fees unless and until a negative decision on its appeal has been issued. The Company has made certain changes to its filing policies and procedures for years that remain potentially under audit. At October 31, 2023 and July 31, 2023, the Company’s accrued expenses included $23.9 million and $26.8 million, respectively, for FCC-related regulatory fees for the year covered by the audit, as well as prior and subsequent years.

 

 

Purchase Commitments

 

At October 31, 2023, the Company had purchase commitments of $18.6 million primarily for equipment and services.

Performance Bonds

 

The Company has performance bonds issued through third parties for the benefit of various states in order to comply with the states’ financial requirements for money remittance licenses and telecommunications resellers. At October 31, 2023, the Company had aggregate performance bonds of $29.0 million outstanding.

 
v3.23.3
Other Expense, Net
 3 Months Ended
Oct. 31, 2023
Other Income and Expenses [Abstract]  
Other Expense, Net

Note 17—Other Expense, Net

 

Other expense, net consists of the following:

  

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Foreign currency transaction losses  $(3,499)  $(1,030)
Equity in net loss of investee   (1,012)   (652)
Losses on investments   (917)   (1,941)
Other   (158)   (219)
           
Total  $(5,586)  $(3,842)

 
v3.23.3
Income Taxes
 3 Months Ended
Oct. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 18—Income Taxes

 

The Company’s income tax expense in the three months ended October 31, 2023 was based on an effective tax rate of 31.8% compared to 27.0% for fiscal 2023. The change in the estimated effective tax rate was mainly due to differences in the amount of taxable income earned in the various taxing jurisdictions.

 
v3.23.3
Recently Issued Accounting Standards Not Yet Adopted
 3 Months Ended
Oct. 31, 2023
Accounting Changes and Error Corrections [Abstract]  
Recently Issued Accounting Standards Not Yet Adopted

Note 19—Recently Issued Accounting Standards Not Yet Adopted

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2024 applied retrospectively to all prior periods presented. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.

 

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, that clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU also requires specific disclosures related to equity securities that are subject to contractual sales restrictions. The Company will adopt the amendments in this ASU prospectively on August 1, 2024. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.
v3.23.3
Basis of Presentation (Policies)
 3 Months Ended
Oct. 31, 2023
Accounting Policies [Abstract]  
Reclassifications

Reclassifications

 

As of August 1, 2023, the Company includes depreciation and amortization in “Direct cost of revenues” and “Selling, general and administrative” expense and is reporting gross profit in the consolidated statements of income. Prior to August 1, 2023, depreciation and amortization was a separate caption in the consolidated statements of income. Depreciation and amortization expense of $4.8 million in the three months ended October 31, 2022 was reclassified to conform to the current year’s presentation as follows: $1.0 million was reclassified to “Direct cost of revenues” and $3.8 million was reclassified to “Selling, general and administrative” expense.

 

In the consolidated statements of cash flows, cash provided by “Trade accounts receivable” in the three months ended October 31, 2022 of $2.7 million was reclassified to “Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets” to conform to the current year’s presentation.

 
Recently Adopted Accounting Standard

Recently Adopted Accounting Standard

 

On August 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, that changed the impairment model for most financial assets and certain other instruments. For receivables, entities are required to use a new forward-looking current expected credit loss model to determine its allowance for credit losses, which replaced the allowance for doubtful accounts. When determining the allowance for credit losses for its trade accounts receivable, the Company considers the probability of recoverability of accounts receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates. The Company also considers future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks will be assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Account balances are written off against the allowance when it is determined that the receivable will not be recovered. For available-for-sale debt securities with unrealized losses, the concept of “other-than-temporary” impairment was replaced by a determination whether any impairment is a result of a credit loss or other factors. The portion of the unrealized loss that is the result of a credit loss is recognized as an allowance and a corresponding expense recorded in “Other expense, net” in the consolidated statements of income. Unrealized loss that is not the result of a credit loss is recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements, and it was not necessary to record a cumulative-effect adjustment to retained earnings as of August 1, 2023.
v3.23.3
Business Segment Information (Tables)
 3 Months Ended
Oct. 31, 2023
Segment Reporting [Abstract]  
Schedule of Operating Results of Business Segments

Operating results for the business segments of the Company were as follows:

 

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Corporate   Total 
Three Months Ended October 31, 2023                              
Revenues  $23,995   $26,563   $19,927   $230,720   $—   $301,205 
Income (loss) from operations   5,460    (1,383)   (7)   15,406    (2,311)   17,165 
Depreciation and amortization:                              
Included in “Direct cost of revenues”   

450

    22    600    184    

—

    

1,256

 
Included in “Selling, general and administrative expense”   

285

    

671

    

840

    

1,964

    31    

3,791

 
                               
Three Months Ended October 31, 2022                              
Revenues  $19,313   $19,887   $16,950   $265,666   $—   $321,816 
Income (loss) from operations   5,231    1,512    (1,056)   17,263    (2,724)   20,226 
Depreciation and amortization:                              
Included in “Direct cost of revenues”   

320

    

23

    

498

    

193

    

—

    1,034 
Included in “Selling, general and administrative expense”   

158

    

598

    

854

    

2,128

    

18

    

3,756

 
v3.23.3
Revenue Recognition (Tables)
 3 Months Ended
Oct. 31, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of Revenues Disaggregated by Business Segment and Service Offered to Customers

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
National Retail Solutions  $23,995   $19,313 
           
BOSS Money   24,239    17,554 
Other   2,324    2,333 
           
Total Fintech   26,563    19,887 
           
net2phone   19,927    16,950 
           
IDT Digital Payments   99,986    109,048 
BOSS Revolution Calling   71,222    86,253 
IDT Global   52,034    61,611 
Other   7,478    8,754 
           
Total Traditional Communications   230,720    265,666 
           
Total  $301,205   $321,816 
Schedule of Revenues Disaggregated by Geographic Region

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location:

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Total 
Three Months Ended October 31, 2023                    
United States  $23,995   $25,834   $10,688   $162,998   $223,515 
Outside the United States:                         
United Kingdom   —    —    —    58,843    58,843 
Other   —    729    9,239    8,879    18,847 
                          
Total outside the United States   

—

    729    9,239    67,722    77,690 
                          
Total  $23,995   $26,563   $19,927   $230,720   $301,205 

 

(in thousands)  National Retail Solutions   Fintech   net2phone   Traditional Communications   Total 
Three Months Ended October 31, 2022                    
United States  $19,313   $19,255   $8,802   $184,838   $232,208 
Outside the United States:                         
United Kingdom   —    —    —    68,940    68,940 
Other   —    632    8,148    11,888    20,668 
                          
Total outside the United States   —    632    8,148    80,828    89,608 
                          
Total  $19,313   $19,887   $16,950   $265,666   $321,816 
Schedule of Estimated Revenue by Business Segment

  Schedule of Estimated Revenue by Business Segment

(in thousands)  National Retail Solutions   net2phone   Total 
Twelve-month period ending October 31:            
2024  $5,740   $38,430   $44,170 
2025   4,767    19,092    23,859 
Thereafter   4,682    6,718    11,400 
                
Total  $15,189   $64,240   $79,429 
Schedule of Information About Contract Liabilities

The following table presents information about the Company’s contract liability balance:

 

  

2023

  

2022

 
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period  $16,089   $17,906 
Schedule of Deferred Customer Contract Acquisition Costs

The Company’s deferred customer contract acquisition costs were as follows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Deferred customer contract acquisition costs included in “Other current assets”  $4,180   $4,460 
Deferred customer contract acquisition costs included in “Other assets”   3,744    3,734 
           
Total  $7,924   $8,194 
Schedule of Amortization of Deferred Customer Contract Acquisition Costs

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Amortization of deferred customer contract acquisition costs  $1,215   $1,176 
v3.23.3
Leases (Tables)
 3 Months Ended
Oct. 31, 2023
Leases  
Schedule of Supplemental Disclosures Related to the Company's Operating Leases

Supplemental disclosures related to the Company’s operating leases were as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Operating lease cost  $758   $767 
Short-term lease cost   326    269 
           
Total lease cost  $1,084   $1,036 
           
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows from operating leases  $791   $764 
Schedule of Supplemental Disclosures Related Weighted Average Operating Leases

 

  

October 31,
2023

  

July 31,
2023

 
Weighted-average remaining lease term-operating leases   2.1 years     2.3 years 
           
Weighted-average discount rate-operating leases   3.9%   3.7%
Schedule of Aggregate Operating Lease Liability

The Company’s aggregate operating lease liability was as follows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Operating lease liabilities included in “Other current liabilities”  $2,732   $2,861 
Operating lease liabilities included in noncurrent liabilities   2,346    2,881 
           
Total  $5,078   $5,742 
Schedule of Future Minimum Maturities of Operating Lease Liabilities

Future minimum maturities of operating lease liabilities were as follows:

 

(in thousands)     
Twelve-month period ending October 31:     
2024  $2,883 
2025   1,713 
2026   478 
2027   220 
2028   12 
Thereafter   — 
      
Total lease payments   5,306 
Less imputed interest   (228)
      
Total operating lease liabilities  $5,078 
v3.23.3
Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents (Tables)
 3 Months Ended
Oct. 31, 2023
Cash and Cash Equivalents [Abstract]  
Schedule of Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported in the consolidated balance sheets that equals the total of the same amounts reported in the consolidated statements of cash flows:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Cash and cash equivalents  $121,668   $103,637 
Restricted cash and cash equivalents   86,785    95,186 
           
Total cash, cash equivalents, and restricted cash and cash equivalents  $208,453   $198,823 
v3.23.3
Debt Securities (Tables)
 3 Months Ended
Oct. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Available-for-sale Securities

The following is a summary of available-for-sale debt securities:

  

  

Amortized Cost

  

Gross Unrealized Gains

  

Gross Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:                
Certificates of deposit*  $1,920   $—   $(3)  $1,917 
U.S. Treasury bills and notes   25,085    —    (141)   24,944 
Government sponsored enterprise notes   3,047    —    (3)   3,044 
Corporate bonds   3,901    —    (564)   3,337 
                     
Total  $33,953   $—   $(711)  $33,242 
                     
July 31, 2023:                    
Certificates of deposit*  $4,080   $—   $(4)  $4,076 
U.S. Treasury bills and notes   31,186    —    (148)   31,038 
Government sponsored enterprise notes   3,881    —    (8)   3,873 
Corporate bonds   3,912    —    (485)   3,427 
                     
Total  $43,059   $—   $(645)  $42,414 

 

*Each of the Company’s certificates of deposit has a CUSIP, was purchased in the secondary market through a broker and may be sold in the secondary market.
Schedule of Contractual Maturities of Available-for-sale Debt Securities

The contractual maturities of the Company’s available-for-sale debt securities at October 31, 2023 were as follows:

 

  

Fair Value

 
    (in thousands) 
Within one year  $26,185 
After one year through five years   5,904 
After five years through ten years   1,110 
After ten years   43 
      
Total  $33,242 
Schedule of Available-for-sale Securities, Unrealized Loss Position

The following available-for-sale debt securities were in an unrealized loss position for which other-than-temporary impairments were not recognized:

  

  

Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:        
Certificates of deposit  $3   $1,917 
U.S. Treasury bills and notes   141    24,944 
Government sponsored enterprise notes   3    3,044 
Corporate bonds   564    3,337 
           
Total  $711   $33,242 
           
July 31, 2023:          
Certificates of deposit  $4   $3,356 
U.S. Treasury bills and notes   148    31,038 
Government sponsored enterprise notes   8    3,873 
Corporate bonds   485    3,368 
           
Total  $645   $41,635 
Schedule of Continuous Unrealized Loss Position for 12 Months or Longer

The following available-for-sale debt securities included in the table above were in a continuous unrealized loss position for 12 months or longer:

 

  

Unrealized Losses

  

Fair Value

 
   (in thousands) 
October 31, 2023:        
U.S. Treasury bills and notes  $66   $639 
Corporate bonds   556    3,216 
           
Total  $622   $3,855 
           
July 31, 2023:          
U.S. Treasury bills and notes  $86   $816 
Corporate bonds   484    3,299 
           
Total  $570   $4,115 
v3.23.3
Equity Investments (Tables)
 3 Months Ended
Oct. 31, 2023
Cash and Cash Equivalents [Abstract]  
Schedule of Equity Investments

Equity investments consist of the following:

 

           
  

October 31,
2023

  

July 31,
2023

 
   (in thousands) 
Zedge, Inc. Class B common stock, 42,282 shares at October 31, 2023 and July 31, 2023  $81   $89 
Rafael Holdings, Inc. Class B common stock, 278,810 shares at October 31, 2023 and July 31, 2023   496    558 
Other marketable equity securities   281    1,497 
Fixed income mutual funds   3,903    4,054 
           
Current equity investments  $4,761   $6,198 
           
Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”)  $1,249   $1,263 
Convertible preferred stock—equity method investment   2,444    2,784 
Hedge funds   3,002    3,002 
Other   1,455    2,825 
           
Noncurrent equity investments  $8,150   $9,874 
Schedule of Carrying Value of Equity Investments

The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Balance, beginning of period  $1,632   $1,501 
Adjustment for observable transactions involving a similar investment from the same issuer   (14)   (27)
Upward adjustment   

129

    

—

 
Impairments   —    — 
           
Balance, end of the period  $1,747   $1,474 
Schedule of Unrealized (losses) Gains for All Equity Investments

Unrealized losses for all equity investments measured at fair value included the following:

 

           
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Net losses recognized during the period on equity investments  $(917)  $(1,941)
Plus: net losses recognized during the period on equity investments sold during the period   —    4 
           
Unrealized losses recognized during the period on equity investments still held at the reporting date  $(917)  $(1,937)

 

The unrealized gains and losses for all equity investments measured at fair value in the table above included the following:

 

         
   Three Months Ended
October 31,		 
  

2023

  

2022

 
   (in thousands) 
Unrealized losses recognized during the period on equity investments:        
         
Rafael Class B common stock  $(62)  $(72)
           
           
Zedge Class B common stock  $(8)  $(27)
Summary of Changes in Equity Method Investments

The following table summarizes the change in the balance of the Company’s equity method investment:

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Balance, beginning of period  $2,784   $1,001 
Purchase of convertible preferred stock   672    — 
Equity in the net loss of investee   (670)   (470)
Amortization of equity method basis difference   (342)   (182)
           
Balance, end of period  $2,444   $349 
Summary of Statements of Operations

Summarized financial information of the EMI was as follows:

   

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Revenues  $2,551   $1,873 
Costs and expenses:          
Direct cost of revenues   2,193    1,694 
Selling, general and administrative   2,093    1,636 
Total costs and expenses   4,286    3,330 
Loss from operations   (1,735)   (1,457)
Other expense, net   (104)   (344)
Net loss  $(1,839)  $(1,801)

 
v3.23.3
Fair Value Measurements (Tables)
 3 Months Ended
Oct. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Balance of Assets Measured at Fair Value on a Recurring Basis

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

 

   Level 1 (1)   Level 2 (2)   Level 3 (3)   Total 
   (in thousands) 
October 31, 2023                    
Debt securities  $24,944   $8,298   $—   $33,242 
Equity investments included in current assets   4,761    —    —    4,761 
Equity investments included in noncurrent assets   —    1,230    1,249    2,479 
                     
Total  $29,705   $9,528   $1,249   $40,482 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(1,834)  $(1,834)
Other noncurrent liabilities   —    —    (2,754)   (2,754)
                     
Total  $—   $—   $(4,588)  $(4,588)
                     
July 31, 2023                    
Debt securities  $31,038   $11,376   $—   $42,414 
Equity investments included in current assets   6,198    —    —    6,198 
Equity investments included in noncurrent assets   —    2,500    1,263    3,763 
                     
Total  $37,236   $13,876   $1,263   $52,375 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(2,032)  $(2,032)
Other noncurrent liabilities   —    —    (2,773)   (2,773)
                     
Total  $—   $—   $(4,805)  $(4,805)

 

(1)– quoted prices in active markets for identical assets or liabilities

 

(2)– observable inputs other than quoted prices in active markets for identical assets and liabilities

 

(3)– no observable pricing inputs in the market
Schedule of Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands)     
Balance, beginning of period  $1,263   $1,132 
Total losses included in “Other expense, net”   (14)   (27)
           
Balance, end of period  $1,249   $1,105 
           
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period  $—   $— 
Schedule of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Balance, beginning of period  $4,805   $8,546 
Payments   (214)   (375)
Total gain included in:          
“Other operating gain, net”   —    (1,565)
“Foreign currency translation adjustment”   (3)   (3)
           
Balance, end of period  $4,588   $6,603 
           
Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period  $—   $— 
v3.23.3
Variable Interest Entity (Tables)
 3 Months Ended
Oct. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Net Income and Aggregate Funding to the Company by VIE

The VIE’s net income and aggregate funding provided by the Company were as follows:

           
   Three Months Ended
October 31,		 
   2023   2022 
   (in thousands) 
Net income of the VIE  $81   $140 
           
Aggregate funding provided by the Company, net  $114   $97 
VIE’s Summarized Consolidated Balance Sheet

The VIE’s summarized consolidated balance sheet amounts are as follows:

           
   October 31,
2023		   July 31,
2023		 
   (in thousands) 
Assets:          
Cash and equivalents  $1,881   $1,596 
Restricted cash   6,578    7,848 
Trade accounts receivable, net   23    62 
Disbursement prefunding   1,037    585 
Prepaid expenses   294    197 
Other current assets   383    317 
Property, plant, and equipment, net   219    272 
Other intangibles, net   699    737 
           
Total assets  $11,114   $11,614 
           
Liabilities and noncontrolling interests:          
Trade accounts payable  $—   $— 
Accrued expenses   86    70 
Settlement liabilities   6,882    7,573 
Due to the Company   140    26 
Accumulated other comprehensive income   1    21 
Noncontrolling interests   4,005    3,924 
           
Total liabilities and noncontrolling interests  $11,114   $11,614 
v3.23.3
Other Operating Gain, Net (Tables)
 3 Months Ended
Oct. 31, 2023
Other Income and Expenses [Abstract]  
Schedule of Other Operating Gain, Net

The following table summarizes the other operating gain, net by business segment:

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Corporate—Straight Path Communications Inc. class action legal fees  $(212)  $(2,512)
Corporate—Straight Path Communications Inc. class action insurance claims   684    1,725 
Corporate—other   12    — 
Fintech—write-off of contingent consideration liability   —    1,565 
Fintech—government grants   —    33 
Traditional Communications—cable telephony customer indemnification claim   —    (11)
           
Total  $484   $800 
v3.23.3
Redeemable Noncontrolling Interest (Tables)
 3 Months Ended
Oct. 31, 2023
Noncontrolling Interest [Abstract]  
Schedule of Net Income Attributable to Mezzanine Equity’s Noncontrolling Interest

  

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Net income of NRS attributable to the mezzanine equity’s noncontrolling interest  $107   $133 
v3.23.3
Earnings Per Share (Tables)
 3 Months Ended
Oct. 31, 2023
Earnings per share attributable to IDT Corporation common stockholders:  
Schedule of Weighted-average Number of Shares Used in the Calculation of Basic and Diluted Earnings Per Share

The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

  

           
    

Three Months Ended

October 31,

 
    2023    2022 
    (in thousands) 
Basic weighted-average number of shares   25,178    25,603 
Effect of dilutive securities:          
Stock options   3    12 
Non-vested restricted Class B common stock   96    1 
           
Diluted weighted-average number of shares   25,277    25,616 
v3.23.3
Accumulated Other Comprehensive Loss (Tables)
 3 Months Ended
Oct. 31, 2023
Equity:  
Schedule of Accumulated Balances for Each Classification of Other Comprehensive Loss

The accumulated balances for each classification of other comprehensive income were as follows:

   

   Unrealized Loss on Available-for-Sale Securities   Foreign Currency Translation   Accumulated Other Comprehensive Loss 
   (in thousands) 
Balance, July 31, 2023  $ (645)  $(16,547)  $(17,192)
Other comprehensive (loss) income attributable to IDT Corporation   (66)   631    565 
                
Balance, October 31, 2023  $(711)  $(15,916)  $(16,627)
v3.23.3
Other Expense, Net (Tables)
 3 Months Ended
Oct. 31, 2023
Other Income and Expenses [Abstract]  
Schedule of Other (Expense) Income, Net

Other expense, net consists of the following:

  

           
  

Three Months Ended

October 31,

 
   2023   2022 
   (in thousands) 
Foreign currency transaction losses  $(3,499)  $(1,030)
Equity in net loss of investee   (1,012)   (652)
Losses on investments   (917)   (1,941)
Other   (158)   (219)
           
Total  $(5,586)  $(3,842)
v3.23.3
Basis of Presentation (Details Narrative) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Depreciation and amortization $ 5,047 $ 4,790
Trade accounts receivable 4,572 (2,442)
Direct Cost of Revenues [Member]    
Depreciation and amortization 1,256 1,034
Selling, General and Administrative Expenses [Member]    
Depreciation and amortization $ 3,791 3,756
Previously Reported [Member]    
Trade accounts receivable   2,700
Previously Reported [Member] | Direct Cost of Revenues [Member]    
Depreciation and amortization   1,000
Previously Reported [Member] | Selling, General and Administrative Expenses [Member]    
Depreciation and amortization   $ 3,800
net2phone 2.0, Inc. [Member]    
Ownership percentage 90.00%  
Fully diluted basis assuming vesting, percentage 85.80%  
National Retail Solutions [Member]    
Ownership percentage 80.00%  
Fully diluted basis assuming vesting, percentage 77.70%  
v3.23.3
Schedule of Operating Results of Business Segments (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Segment Reporting Information [Line Items]    
Revenues $ 301,205 $ 321,816
Income (loss) from operations 17,165 20,226
Depreciation and amortization:    
Total depreciation and amortization 5,047 4,790
Direct Cost of Revenues [Member]    
Depreciation and amortization:    
Total depreciation and amortization 1,256 1,034
Selling, General and Administrative Expenses [Member]    
Depreciation and amortization:    
Total depreciation and amortization 3,791 3,756
National Retail Solutions [Member]    
Segment Reporting Information [Line Items]    
Revenues 23,995 19,313
Income (loss) from operations 5,460 5,231
National Retail Solutions [Member] | Direct Cost of Revenues [Member]    
Depreciation and amortization:    
Total depreciation and amortization 450 320
National Retail Solutions [Member] | Selling, General and Administrative Expenses [Member]    
Depreciation and amortization:    
Total depreciation and amortization 285 158
Fintech [Member]    
Segment Reporting Information [Line Items]    
Revenues 26,563 19,887
Income (loss) from operations (1,383) 1,512
Fintech [Member] | Direct Cost of Revenues [Member]    
Depreciation and amortization:    
Total depreciation and amortization 22 23
Fintech [Member] | Selling, General and Administrative Expenses [Member]    
Depreciation and amortization:    
Total depreciation and amortization 671 598
net2 phone [Member]    
Segment Reporting Information [Line Items]    
Revenues 19,927 16,950
Income (loss) from operations (7) (1,056)
net2 phone [Member] | Direct Cost of Revenues [Member]    
Depreciation and amortization:    
Total depreciation and amortization 600 498
net2 phone [Member] | Selling, General and Administrative Expenses [Member]    
Depreciation and amortization:    
Total depreciation and amortization 840 854
Traditional Communications [Member]    
Segment Reporting Information [Line Items]    
Revenues 230,720 265,666
Income (loss) from operations 15,406 17,263
Traditional Communications [Member] | Direct Cost of Revenues [Member]    
Depreciation and amortization:    
Total depreciation and amortization 184 193
Traditional Communications [Member] | Selling, General and Administrative Expenses [Member]    
Depreciation and amortization:    
Total depreciation and amortization 1,964 2,128
Corporate Segment [Member]    
Segment Reporting Information [Line Items]    
Revenues
Income (loss) from operations (2,311) (2,724)
Corporate Segment [Member] | Direct Cost of Revenues [Member]    
Depreciation and amortization:    
Total depreciation and amortization
Corporate Segment [Member] | Selling, General and Administrative Expenses [Member]    
Depreciation and amortization:    
Total depreciation and amortization $ 31 $ 18
v3.23.3
Business Segment Information (Details Narrative)
 3 Months Ended
Oct. 31, 2023
Segments
Segment Reporting [Abstract]  
Number of reportable segments 4
v3.23.3
Schedule of Revenues Disaggregated by Business Segment and Service Offered to Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Disaggregation of Revenue [Line Items]    
Revenues $ 301,205 $ 321,816
National Retail Solutions [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 23,995 19,313
Fintech [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 26,563 19,887
Fintech [Member] | BOSS Revolution Money Transfer [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 24,239 17,554
Fintech [Member] | Other [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 2,324 2,333
net2 phone [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 19,927 16,950
Traditional Communications [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 230,720 265,666
Traditional Communications [Member] | Other [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 7,478 8,754
Traditional Communications [Member] | IDT Digital Payments [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 99,986 109,048
Traditional Communications [Member] | BOSS Revolution Calling [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 71,222 86,253
Traditional Communications [Member] | IDT Global [Member]    
Disaggregation of Revenue [Line Items]    
Revenues $ 52,034 $ 61,611
v3.23.3
Schedule of Revenues Disaggregated by Geographic Region (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Disaggregation of Revenue [Line Items]    
Revenues $ 301,205 $ 321,816
National Retail Solutions [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 23,995 19,313
Fintech [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 26,563 19,887
net2 phone [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 19,927 16,950
Traditional Communications [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 230,720 265,666
UNITED STATES    
Disaggregation of Revenue [Line Items]    
Revenues 223,515 232,208
UNITED STATES | National Retail Solutions [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 23,995 19,313
UNITED STATES | Fintech [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 25,834 19,255
UNITED STATES | net2 phone [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 10,688 8,802
UNITED STATES | Traditional Communications [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 162,998 184,838
UNITED KINGDOM    
Disaggregation of Revenue [Line Items]    
Revenues 58,843 68,940
UNITED KINGDOM | National Retail Solutions [Member]    
Disaggregation of Revenue [Line Items]    
Revenues
UNITED KINGDOM | Fintech [Member]    
Disaggregation of Revenue [Line Items]    
Revenues
UNITED KINGDOM | net2 phone [Member]    
Disaggregation of Revenue [Line Items]    
Revenues
UNITED KINGDOM | Traditional Communications [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 58,843 68,940
Others [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 18,847 20,668
Others [Member] | National Retail Solutions [Member]    
Disaggregation of Revenue [Line Items]    
Revenues
Others [Member] | Fintech [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 729 632
Others [Member] | net2 phone [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 9,239 8,148
Others [Member] | Traditional Communications [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 8,879 11,888
Non-US [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 77,690 89,608
Non-US [Member] | National Retail Solutions [Member]    
Disaggregation of Revenue [Line Items]    
Revenues
Non-US [Member] | Fintech [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 729 632
Non-US [Member] | net2 phone [Member]    
Disaggregation of Revenue [Line Items]    
Revenues 9,239 8,148
Non-US [Member] | Traditional Communications [Member]    
Disaggregation of Revenue [Line Items]    
Revenues $ 67,722 $ 80,828
v3.23.3
Schedule of Estimated Revenue by Business Segment (Details)
$ in Thousands
Oct. 31, 2023
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-31  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total $ 79,429
Remaining Performance Obligations, Years 0 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total $ 44,170
Remaining Performance Obligations, Years 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total $ 23,859
Remaining Performance Obligations, Years 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total $ 11,400
Remaining Performance Obligations, Years 0 years
National Retail Solutions [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-31  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total $ 15,189
National Retail Solutions [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total 5,740
National Retail Solutions [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total 4,767
National Retail Solutions [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total 4,682
net2 phone [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-31  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total 64,240
net2 phone [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total 38,430
net2 phone [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total 19,092
net2 phone [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-08-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Total $ 6,718
v3.23.3
Schedule of Information About Contract Liabilities (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Revenue from Contract with Customer [Abstract]    
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period $ 16,089 $ 17,906
v3.23.3
Schedule of Deferred Customer Contract Acquisition Costs (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Revenue from Contract with Customer [Abstract]    
Deferred customer contract acquisition costs included in “Other current assets” $ 4,180 $ 4,460
Deferred customer contract acquisition costs included in “Other assets” 3,744 3,734
Total $ 7,924 $ 8,194
v3.23.3
Schedule of Amortization of Deferred Customer Contract Acquisition Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Revenue from Contract with Customer [Abstract]    
Amortization of deferred customer contract acquisition costs $ 1,215 $ 1,176
v3.23.3
Schedule of Supplemental Disclosures Related to the Company's Operating Leases (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Leases    
Operating lease cost $ 758 $ 767
Short-term lease cost 326 269
Total lease cost 1,084 1,036
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 791 $ 764
v3.23.3
Schedule of Supplemental Disclosures Related Weighted Average Operating Leases (Details)
Oct. 31, 2023
Jul. 31, 2023
Leases    
Operating lease, weighted average remaining lease term 2 years 1 month 6 days 2 years 3 months 18 days
Operating lease, weighted average discount rate, percent 3.90% 3.70%
v3.23.3
Schedule of Aggregate Operating Lease Liability (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Leases    
Operating lease liabilities included in “Other current liabilities” $ 2,732 $ 2,861
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities Other current liabilities
Operating lease liabilities included in noncurrent liabilities $ 2,346 $ 2,881
Total $ 5,078 $ 5,742
v3.23.3
Schedule of Future Minimum Maturities of Operating Lease Liabilities (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Leases    
2024 $ 2,883  
2025 1,713  
2026 478  
2027 220  
2028 12  
Thereafter  
Total lease payments 5,306  
Less imputed interest (228)  
Total operating lease liabilities $ 5,078 $ 5,742
v3.23.3
Leases (Details Narrative) - USD ($)
$ in Millions
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Right of use assets obtained in exchange for new operating lease liabilities $ 0.1 $ 0.4
Minimum [Member]    
Lessee, operating lease, term of contract 1 year  
Maximum [Member]    
Lessee, operating lease, term of contract 5 years  
v3.23.3
Schedule of Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Oct. 31, 2022
Jul. 31, 2022
Cash and Cash Equivalents [Abstract]        
Cash and cash equivalents $ 121,668 $ 103,637    
Restricted cash and cash equivalents 86,785 95,186    
Total cash, cash equivalents, and restricted cash and cash equivalents $ 208,453 $ 198,823 $ 198,775 $ 189,562
v3.23.3
Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents (Details Narrative) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Restricted cash and cash equivalents, current $ 86,785 $ 95,186
Cash and cash equivalents, at carrying value 121,668 103,637
IDT Financial Services Limited [Member]    
Restricted cash and cash equivalents, current 80,100 87,300
IDT Payment Services [Member]    
Cash and cash equivalents, at carrying value $ 35,100 $ 20,600
v3.23.3
Schedule of Available-for-sale Securities (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Debt Securities, Available-for-Sale, Amortized Cost $ 33,953 $ 43,059
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Gain, before Tax
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax (711) (645)
Debt Securities, Available-for-Sale 33,242 42,414
Certificates of Deposit [Member]    
Debt Securities, Available-for-Sale, Amortized Cost [1] 1,920 4,080
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Gain, before Tax [1]
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax [1] (3) (4)
Debt Securities, Available-for-Sale [1] 1,917 4,076
US Treasury Bill Securities [Member]    
Debt Securities, Available-for-Sale, Amortized Cost 25,085 31,186
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Gain, before Tax
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax (141) (148)
Debt Securities, Available-for-Sale 24,944 31,038
US Government-sponsored Enterprises Debt Securities [Member]    
Debt Securities, Available-for-Sale, Amortized Cost 3,047 3,881
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Gain, before Tax
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax (3) (8)
Debt Securities, Available-for-Sale 3,044 3,873
Corporate Bond Securities [Member]    
Debt Securities, Available-for-Sale, Amortized Cost 3,901 3,912
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Gain, before Tax
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax (564) (485)
Debt Securities, Available-for-Sale $ 3,337 $ 3,427
[1] Each of the Company’s certificates of deposit has a CUSIP, was purchased in the secondary market through a broker and may be sold in the secondary market.
v3.23.3
Schedule of Contractual Maturities of Available-for-sale Debt Securities (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Investments, Debt and Equity Securities [Abstract]    
Within one year $ 26,185  
After one year through five years 5,904  
After five years through ten years 1,110  
After ten years 43  
Total $ 33,242 $ 42,414
v3.23.3
Schedule of Available-for-sale Securities, Unrealized Loss Position (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss $ 711 $ 645
Debt Securities, Available-for-Sale, Unrealized Loss Position 33,242 41,635
Certificates of Deposit [Member]    
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss 3 4
Debt Securities, Available-for-Sale, Unrealized Loss Position 1,917 3,356
US Treasury Bill Securities [Member]    
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss 141 148
Debt Securities, Available-for-Sale, Unrealized Loss Position 24,944 31,038
US Government-sponsored Enterprises Debt Securities [Member]    
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss 3 8
Debt Securities, Available-for-Sale, Unrealized Loss Position 3,044 3,873
Corporate Bond Securities [Member]    
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss 564 485
Debt Securities, Available-for-Sale, Unrealized Loss Position $ 3,337 $ 3,368
v3.23.3
Schedule of Continuous Unrealized Loss Position for 12 Months or Longer (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss $ 622 $ 570
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer 3,855 4,115
US Treasury Bill Securities [Member]    
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss 66 86
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer 639 816
Corporate Bond Securities [Member]    
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss 556 484
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer $ 3,216 $ 3,299
v3.23.3
Debt Securities (Details Narrative) - USD ($)
$ in Millions
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Investments, Debt and Equity Securities [Abstract]    
Proceeds from sale and maturity of debt securities, available-for-sale $ 17.1 $ 11.5
v3.23.3
Schedule of Equity Investments (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Current equity investments $ 4,761 $ 6,198
Noncurrent equity investments 8,150 9,874
Other Marketable Equity Securities [Member]    
Current equity investments 281 1,497
Mutual Fund [Member]    
Current equity investments 3,903 4,054
Convertible Preferred Stock [Member]    
Noncurrent equity investments 2,444 2,784
Hedge Funds [Member]    
Noncurrent equity investments 3,002 3,002
Other Investments [Member]    
Noncurrent equity investments 1,455 2,825
Common Class B [Member] | Zedge Inc [Member]    
Current equity investments 81 89
Common Class B [Member] | Rafael Holdings Inc [Member]    
Current equity investments 496 558
Series C Convertible Preferred Stock [Member] | Visa Inc [Member]    
Noncurrent equity investments $ 1,249 $ 1,263
v3.23.3
Schedule of Equity Investments (Details) (Parenthetical) - Common Class B [Member] - shares
 3 Months Ended 12 Months Ended
Oct. 31, 2023
Jul. 31, 2023
Zedge Inc [Member]    
Number of related party shares received 42,282 42,282
Rafael Holdings Inc [Member]    
Number of related party shares received 278,810 278,810
v3.23.3
Schedule of Carrying Value of Equity Investments (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Cash and Cash Equivalents [Abstract]    
Balance, beginning of period $ 1,632 $ 1,501
Adjustment for observable transactions involving a similar investment from the same issuer (14) (27)
Upward adjustment 129
Impairments
Balance, end of the period $ 1,747 $ 1,474
v3.23.3
Schedule of Unrealized (losses) Gains for All Equity Investments (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Net losses recognized during the period on equity investments $ (917) $ (1,941)
Plus: net losses recognized during the period on equity investments sold during the period 4
Unrealized losses recognized during the period on equity investments still held at the reporting date (917) (1,937)
Rafael Class B Common Stock [Member]    
Unrealized losses recognized during the period on equity investments still held at the reporting date (62) (72)
Zedge Class B Common Stock [Member]    
Unrealized losses recognized during the period on equity investments still held at the reporting date $ (8) $ (27)
v3.23.3
Summary of Changes in Equity Method Investments (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Defined Benefit Plan Disclosure [Line Items]    
Purchase of convertible preferred stock $ 672
Equity in the net loss of investee (1,012) (652)
Equity Method Investee [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Balance, beginning of period 2,784 1,001
Purchase of convertible preferred stock 672
Equity in the net loss of investee (670) (470)
Amortization of equity method basis difference (342) (182)
Balance, end of period $ 2,444 $ 349
v3.23.3
Summary of Statements of Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Defined Benefit Plan Disclosure [Line Items]    
Revenues $ 301,205 $ 321,816
Selling, general and administrative [1] 77,222 69,620
Total costs and expenses 77,263 68,920
Loss from operations 17,165 20,226
Other expense, net (5,586) (3,842)
Net loss 8,476 12,555
Equity Method Investee [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Revenues 2,551 1,873
Direct cost of revenues 2,193 1,694
Selling, general and administrative 2,093 1,636
Total costs and expenses 4,286 3,330
Loss from operations (1,735) (1,457)
Other expense, net (104) (344)
Net loss $ (1,839) $ (1,801)
[1] Stock-based compensation included in selling, general and administrative expense
v3.23.3
Equity Investments (Details Narrative) - USD ($)
$ in Millions
 3 Months Ended
Oct. 31, 2023
Jul. 31, 2023
Equity method investment, aggregate cost $ 8.2  
Equity method investment, description These basis differences are being amortized over the 6-year estimated life of the customer list.  
Equity Method Investee [Member]    
Equity Method Investment, Ownership Percentage 33.30% 33.30%
v3.23.3
Schedule of Balance of Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities $ 33,242 $ 42,414
Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities 33,242 42,414
Equity investments included in current assets 4,761 6,198
Equity investments included in noncurrent assets 2,479 3,763
Total 40,482 52,375
Acquisition consideration included in other current liabilities (1,834) (2,032)
Acquisition consideration included in other noncurrent liabilities (2,754) (2,773)
Acquisition consideration included in other liabilities (4,588) (4,805)
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities [1] 24,944 31,038
Equity investments included in current assets [1] 4,761 6,198
Equity investments included in noncurrent assets [1]
Total [1] 29,705 37,236
Acquisition consideration included in other current liabilities [1]
Acquisition consideration included in other noncurrent liabilities [1]
Acquisition consideration included in other liabilities [1]
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities [2] 8,298 11,376
Equity investments included in current assets [2]
Equity investments included in noncurrent assets [2] 1,230 2,500
Total [2] 9,528 13,876
Acquisition consideration included in other current liabilities [2]
Acquisition consideration included in other noncurrent liabilities [2]
Acquisition consideration included in other liabilities [2]
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities [3]
Equity investments included in current assets [3]
Equity investments included in noncurrent assets [3] 1,249 1,263
Total [3] 1,249 1,263
Acquisition consideration included in other current liabilities [3] (1,834) (2,032)
Acquisition consideration included in other noncurrent liabilities [3] (2,754) (2,773)
Acquisition consideration included in other liabilities [3] $ (4,588) $ (4,805)
[1] – quoted prices in active markets for identical assets or liabilities
[2] – observable inputs other than quoted prices in active markets for identical assets and liabilities
[3] – no observable pricing inputs in the market
v3.23.3
Schedule of Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Fair Value Disclosures [Abstract]    
Balance, beginning of period $ 1,263 $ 1,132
Total losses included in “Other expense, net” $ (14) (27)
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Other expense, net  
Balance, end of period $ 1,249 1,105
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period
v3.23.3
Schedule of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Fair Value Disclosures [Abstract]    
Balance, beginning of period $ 4,805 $ 8,546
Payments (214) (375)
“Other operating gain, net” $ (1,565)
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Other Operating Income (Expense), Net Other Operating Income (Expense), Net
“Foreign currency translation adjustment” $ (3) $ (3)
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] Foreign currency translation adjustments Foreign currency translation adjustments
Balance, end of period $ 4,588 $ 6,603
Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period
v3.23.3
Fair Value Measurements (Details Narrative) - USD ($)
$ in Millions
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Jul. 31, 2023
Fair Value, Option, Quantitative Disclosures [Line Items]      
Investment in hedge funds $ 3.0   $ 3.0
Payment for contingent consideration $ 0.2 $ 0.4  
Other Operating Income (Expense) [Member]      
Fair Value, Option, Quantitative Disclosures [Line Items]      
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability   $ 1.6  
v3.23.3
Schedule of Net Income and Aggregate Funding to the Company by VIE (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Net income of the VIE $ 81 $ 140
Aggregate funding provided by the Company, net $ 114 $ 97
v3.23.3
VIE’s Summarized Consolidated Balance Sheet (Details) - USD ($)
$ in Thousands
Oct. 31, 2023
Jul. 31, 2023
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
Cash and equivalents $ 121,668 $ 103,637
Trade accounts receivable, net 35,328 32,092
Disbursement prefunding 35,733 30,113
Prepaid expenses 19,502 16,638
Other current assets 27,034 28,394
Property, plant, and equipment, net 38,802 38,655
Other intangibles, net 7,215 8,196
Total assets 499,046 510,810
Trade accounts payable 24,469 22,231
Accrued expenses 100,107 110,796
Settlement liabilities 19,268 21,495
Due to the Company 3,220 3,354
Accumulated other comprehensive income (16,627) (17,192)
Noncontrolling interests 6,922 6,267
Total liabilities and noncontrolling interests 499,046 510,810
Variable Interest Entity, Primary Beneficiary [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
Cash and equivalents 1,881 1,596
Restricted cash 6,578 7,848
Trade accounts receivable, net 23 62
Disbursement prefunding 1,037 585
Prepaid expenses 294 197
Other current assets 383 317
Property, plant, and equipment, net 219 272
Other intangibles, net 699 737
Total assets 11,114 11,614
Trade accounts payable
Accrued expenses 86 70
Settlement liabilities 6,882 7,573
Accumulated other comprehensive income 1 21
Noncontrolling interests 4,005 3,924
Total liabilities and noncontrolling interests 11,114 11,614
Variable Interest Entity, Primary Beneficiary [Member] | Related Party [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
Due to the Company $ 140 $ 26
v3.23.3
Schedule of Other Operating Gain, Net (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Restructuring Cost and Reserve [Line Items]    
Corporate—Straight Path Communications Inc. class action legal fees $ (212) $ (2,512)
Corporate—Straight Path Communications Inc. class action insurance claims 684 1,725
Corporate—other 12
Fintech—government grants 33
Traditional Communications—cable telephony customer indemnification claim (11)
Total 484 800
Fintech [Member]    
Restructuring Cost and Reserve [Line Items]    
Fintech—write-off of contingent consideration liability $ 1,565
v3.23.3
Other Operating Gain, Net (Details Narrative) - USD ($)
$ in Thousands
 3 Months Ended
May 08, 2023
Oct. 31, 2023
Oct. 31, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]      
Traditional communications cable telephony customer indemnification claim   $ (11)
Indemnification Agreement [Member]      
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]      
Traditional communications cable telephony customer indemnification claim $ 3,900    
v3.23.3
Revolving Credit Facility (Details Narrative) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Jul. 31, 2023
May 17, 2021
Line of Credit Facility [Line Items]        
Borrowing lines of credit $ 30,315    
Repayments of lines of credit 30,315    
IDT Telecom [Member]        
Line of Credit Facility [Line Items]        
Borrowing lines of credit 30,300    
Repayments of lines of credit 30,300    
Revolving Credit Facility [Member] | TD Bank [Member]        
Line of Credit Facility [Line Items]        
Line of credit facility, maximum borrowing capacity       $ 25,000
Revolving credit amount outstanding $ 0   $ 0  
Credit facility, description The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the secured overnight financing rate published by the Federal Reserve Bank of New York plus 10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, 2026. IDT Telecom pays a quarterly unused commitment fee on the average daily balance of the unused portion of the $25.0 million commitment of 30 to 85 basis points, depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter.      
Debt instrument maturity date May 16, 2026      
Revolving credit, unused portion amount       $ 25,000
v3.23.3
Equity (Details Narrative) - USD ($)
 3 Months Ended
Oct. 11, 2023
Oct. 31, 2023
Oct. 31, 2022
Oct. 26, 2023
Class of Stock [Line Items]        
Proceeds from exercise of stock options   $ 172,000  
Stock repurchase program, remaining number of shares authorized to be repurchased   4,600,000    
Common Class B [Member] | 2024 Equity Incentive Plan [Member]        
Class of Stock [Line Items]        
Number of shares, grant       250,000
Common Class B [Member] | 2015 Stock Option and Incentive Plan [Member]        
Class of Stock [Line Items]        
Additional number of shares authorized 250,000      
Proceeds from exercise of stock options   $ 200,000    
Exercise of stock options, shares   12,500    
Class B Common Stock [Member]        
Class of Stock [Line Items]        
Aggregate repurchased shares   8,000,000.0    
Class B common stock shares repurchased   125,470 203,436  
Aggregate purchase price of shares repurchased   $ 2,800,000 $ 5,000,000.0  
Class B Common Stock [Member] | Employees [Member]        
Class of Stock [Line Items]        
Class B common stock shares repurchased   654 13,403  
Aggregate purchase price of shares repurchased   $ 15,000 $ 300,000  
v3.23.3
Schedule of Net Income Attributable to Mezzanine Equity’s Noncontrolling Interest (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Common Class B [Member] | National Retail Solutions [Member]    
Noncontrolling Interest [Line Items]    
Net income of NRS attributable to the mezzanine equity’s noncontrolling interest $ 107 $ 133
v3.23.3
Redeemable Noncontrolling Interest (Details Narrative) - Common Class B [Member] - National Retail Solutions [Member]
$ in Millions
Sep. 29, 2021
USD ($)
Noncontrolling Interest [Line Items]  
Capital stock outstanding percentage 2.50%
Sale of stock, consideration received on transaction $ 10
v3.23.3
Schedule of Weighted-average Number of Shares Used in the Calculation of Basic and Diluted Earnings Per Share (Details) - shares
shares in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Earnings per share attributable to IDT Corporation common stockholders:    
Basic weighted-average number of shares 25,178 25,603
Stock options 3 12
Non-vested restricted Class B common stock 96 1
Diluted weighted-average number of shares 25,277 25,616
v3.23.3
Schedule of Accumulated Balances for Each Classification of Other Comprehensive Loss (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Accumulated Other Comprehensive Income (Loss), Net of Tax $ (17,192)  
Other Comprehensive Income (Loss), Net of Tax 565 $ (367)
Ending balance (16,627)  
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Parent [Member]    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Accumulated Other Comprehensive Income (Loss), Net of Tax (645)  
Other Comprehensive Income (Loss), Net of Tax (66)  
Ending balance (711)  
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Accumulated Other Comprehensive Income (Loss), Net of Tax (16,547)  
Other Comprehensive Income (Loss), Net of Tax 631  
Ending balance $ (15,916)  
v3.23.3
Commitments and Contingencies (Details Narrative) - USD ($)
$ in Millions
Oct. 31, 2023
Jul. 31, 2023
Product Liability Contingency [Line Items]    
Accrued liabilities $ 23.9 $ 26.8
Purchase obligation 18.6  
Performance bonds outstanding $ 29.0  
Federal Telecommunications Relay Services Fund [Member]    
Product Liability Contingency [Line Items]    
Final decision imposed   $ 2.9
v3.23.3
Schedule of Other (Expense) Income, Net (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Other Income and Expenses [Abstract]    
Foreign currency transaction losses $ (3,499) $ (1,030)
Equity in net loss of investee (1,012) (652)
Losses on investments (917) (1,941)
Other (158) (219)
Total $ (5,586) $ (3,842)
v3.23.3
Income Taxes (Details Narrative)
 3 Months Ended 12 Months Ended
Oct. 31, 2023
Jul. 31, 2023
Income Tax Disclosure [Abstract]    
Effective income tax rate reconciliation, percent 31.80% 27.00%
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