Iñigo Alonso

Iñigo Alonso with Morum Capital inquired about IDT's capital allocation strategy, including potential special dividends, accelerated share buybacks, or M&A, following the Straight Path litigation resolution. He also asked about the growth drivers for net payment processing accounts, opportunities in NRS's adjacent and international markets, and the record top-line revenue for IDT Global.

Answer

CEO Shmuel Jonas stated that large M&A is not a current focus, with a 'wait and see' approach on new federal excise tax impacts on retail money transfers. He mentioned small acquisitions for NRS and plans for future strategic moves, including potential international expansion for NRS, though not definitively for fiscal year 2026. Regarding net payment processing accounts, he confirmed they require a POS. CFO Marcelo Fischer clarified that IDT Global's management prioritizes maximizing gross profit over top-line revenue, which can fluctuate based on high-margin opportunities, noting their consistent $9-$10 million GP per quarter despite minute declines.

Iñigo Alonso asked about the money remittance business, specifically the progress with stablecoins and Visa-linked wallets, the WhatsApp launch timeline, and future app integration for wallets. He also inquired about the M&A landscape, including potential regulatory concerns for the Intermex/Western Union deal and IDT's M&A prospects. Finally, he sought details on IDT's main organic growth investments and net2phone's shift from a seat-based to a usage-based revenue model for AI agents.

Answer

CEO Shmuel Jonas stated that wallets are in beta, expecting stablecoins to be a future driver for transactions and storage due to volatility and cost efficiency, though not yet materially impacting current results. He confirmed WhatsApp launch in days for existing customers, expanding to new customers in 30-45 days, and 100% future app integration for wallets. Regarding M&A, he declined to comment on regulatory concerns for the Intermex/Western Union deal and noted that while the money transfer market hasn't generally improved, there are still new opportunities, though valuations are nuanced. He broadly stated IDT will continue to spend wisely and creatively for customer acquisition without detailing specific organic investments. For net2phone, Mr. Jonas clarified the usage model primarily applies to AI agents and AI coach services, while UCaaS/CCaaS will remain seat-based.

Iñigo Alonso with MORAM Capital inquired about the progress of IDT's stablecoin and Visa-linked wallet initiatives, the launch timeline for WhatsApp integration, and the company's strategy regarding M&A opportunities in the money remittance sector, particularly in light of recent industry consolidation. He also sought clarification on IDT's organic growth investments and the shift in net2phone's revenue model from seat-based to usage-based for AI agents.

Answer

IDT CEO Shmuel Jonas confirmed that Visa-linked wallets are in beta, with a full launch expected soon, and WhatsApp integration is imminent, initially for existing customers. He anticipates stablecoins will become a significant part of future transactions. Regarding M&A, Mr. Jonas noted the complexity of market valuations and declined to comment on regulatory aspects of competitor acquisitions. He emphasized IDT's commitment to strategic, cost-effective organic customer acquisition and clarified that net2phone's usage-based revenue model applies specifically to AI agent and AI coach services, while UCaaS/CCaaS will remain seat-based. CFO Marcelo Fischer added that the company's budget for BOSS Money growth is in the high teens, acknowledging broader uncertainties but expressing a slightly more optimistic view than the CEO.

Iñigo Alonso with Morum Capital inquired about the progress of stablecoins and Visa-linked wallets in the money remittance business, their impact on market volatility, and the launch timeline for WhatsApp integration. He also asked about potential regulatory concerns regarding the Intermex/Western Union acquisition, the current M&A landscape and valuations for IDT, key organic investment areas, and whether net2phone's shift to a usage-based revenue model applies to UCaaS or AI agents.

Answer

CEO Shmuel Jonas stated that wallets have launched in a beta phase, anticipating stablecoins will be a significant part of future transactions, though they haven't had a material impact yet. He confirmed WhatsApp integration is launching for existing customers in the next few days, with new customers following in 30-45 days, and that wallets will be fully integrated into the app. Jonas declined to comment on regulatory concerns for competitor acquisitions. Regarding M&A, he noted the market for money transfer companies hasn't broadly improved but acknowledged premiums for specific deals, indicating a nuanced situation. For organic investments, he emphasized wise and creative spending for customer acquisition without detailing specific strategies. Finally, Jonas clarified that the shift to a usage-based model for net2phone primarily applies to AI agents and AI coach services, while UCaaS and CCaaS will remain seat-based.

Asked detailed questions across all three growth businesses (NRS, Nextiva, Boss Money) regarding recent performance, go-to-market strategy, new product adoption (AI agents), and beta programs. Also inquired about the company's M&A strategy and capital allocation plans, specifically share buybacks versus dividends.

Answer

The CEO explained that NRS's strong performance was due to broad-based sales efforts across all channels. For Nextiva's AI agent, initial customers are mostly existing clients across various verticals, with plans to expand. The CEO could not comment on the Boss Money beta program. On capital allocation, management confirmed they are actively looking at M&A but will remain disciplined on price, while also viewing share buybacks as a good use of excess cash, ruling out using debt for repurchases.