IDT Corp (IDT) 2016 Q2 法說會逐字稿

Hello, and welcome to the IDT Corporation's second-quarter FY16 earnings conference call.

您好，歡迎參加 IDT Corporation 2016 財年第二季財報電話會議。

(Operator Instructions)

（操作員說明）

In today's presentation, Shmuel Jonas, CEO of IDT Corporation, will discuss IDT's financial and operational results for the three months ended January 31, 2016. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the Company anticipates.

在今天的演講中，IDT Corporation 執行長Shmuel Jonas 將討論IDT 截至2016 年1 月31 日的三個月的財務和營運業績。好的發言中還是在問答環節中無論是一般性的還是特定性的，都受到風險和不確定性的影響，這些風險和不確定性可能導致實際結果與公司預期的結果有重大差異。

These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the reports that IDT files periodically with the SEC. IDT assumes no obligation either to update any forward-looking statements that they have made or may make, or to update the factors that may cause actual results to differ materially from those that they forecast.

這些風險和不確定性包括但不限於 IDT 定期向 SEC 提交的報告中討論的特定風險和不確定性。 IDT 不承擔更新其已做出或可能做出的任何前瞻性聲明的義務，也不承擔更新可能導致實際結果與其預測產生重大差異的因素的義務。

In their presentation or in the Q&A that will follow, IDT's Management may make reference to the non-GAAP measures, adjusted EBITDA, non-GAAP net income, and non-GAAP diluted EPS. A schedule provided in the earnings release reconciles adjusted EBITDA, non-GAAP net income, and non-GAAP diluted EPS to the nearest corresponding GAAP measures.

在其演示或隨後的問答中，IDT 管理層可能會參考非 GAAP 指標、調整後 EBITDA、非 GAAP 淨利潤和非 GAAP 攤薄後每股收益。收益發布中提供的時間表將調整後的 EBITDA、非 GAAP 淨利潤和非 GAAP 攤薄後每股收益與最接近的相應 GAAP 指標進行了核對。

Please note that the IDT earnings release is available on the investor relations page of the IDT Corporation website, www.idt.net. The earnings release has also been filed on a Form 8-K with the SEC.

請注意，IDT 收益發布可在 IDT Corporation 網站 www.idt.net 的投資者關係頁面上取得。收益報告也以 8-K 表格的形式向 SEC 提交。

I would now like to turn the conference over to Mr. Jonas.

我現在想把會議交給喬納斯先生。

Thank you, operator.

謝謝你，接線生。

Welcome to IDT's second quarter of FY16 earnings conference call. My remarks today will focus on key operational and financial results for the three months ended January 31, 2016. Throughout my remarks, unless I indicate otherwise, I will compare the second quarter's results to the year-ago quarter.

歡迎參加 IDT 2016 財年第二季財報電話會議。我今天的演講將重點放在截至2016 年1 月31 日的三個月的主要營運和財務業績。進行比較。

For a comprehensive and detailed discussion of our results, please read our earnings release issued earlier today and our Form 10-Q, which we expect to file with the SEC by March 11. Following my remarks, Marcelo Fischer, IDT's Senior Vice President of Finance, and IDT's Telecom's Chief Financial Officer will join me and we'll be glad to take your questions.

如需對我們的業績進行全面、詳細的討論，請閱讀我們今天早些時候發布的收益報告以及我們預計於3 月11 日之前向SEC 提交的10-Q 表格。副總裁Marcelo Fischer ，IDT 電信的財務長將與我一起，我們將很高興回答您的問題。

I will start by taking a big about Zedge since it's top of mind for many of our investors. We intend to file the information statement for the Zedge spin-off later this month and complete the process before the end of our fiscal year. Zedge had a fantastic quarter, generating record levels of revenue, adjusted EBITDA, and income from operations. Revenue climbed to $3.5 million in the second quarter from $2.4 million in the year-ago quarter and $2.6 million in the prior quarter.

首先，我將重點放在 Zedge，因為它是我們許多投資者最關心的問題。我們打算在本月稍後提交 Zedge 分拆的資訊聲明，並在我們的財政年度結束之前完成該過程。 Zedge 的季度表現非常出色，營收、調整後 EBITDA 和營運收入均創歷史新高。第二季營收從去年同期的 240 萬美元和上一季的 260 萬美元攀升至 350 萬美元。

The year-over-year increase reflects continued growth in users and user engagement. While the seasonal increase reflects these factors, as well as increased advertising demand around the holiday season, Zedge's adjusted EBITDA increased to $1.6 million from negative $382,000 in the year-ago quarter, and more than doubled compared to Q1. These accomplishments reflect Zedge's scalable business model whereby increases in revenue flow to the bottom line without commensurate increases in cost.

同比增長反映了用戶和用戶參與的持續成長。雖然季節性成長反映了這些因素，以及節日期間廣告需求的增加，但Zedge 調整後的EBITDA 從去年同期的負382,000 美元增至160 萬美元，與第一季相比增長了一倍多。這些成就反映了 Zedge 的可擴展業務模式，即在不相應增加成本的情況下增加收入流入利潤。

Turning now to IDT's consolidated results for the second quarter, we achieved year-over-year increases in adjusted EBITDA, income from operations, and earnings despite having lower revenue. Sequentially, however, revenue adjusted EBITDA, income from operations, and earnings declined. Consolidated revenue was $382.5 million for the quarter, compared to $394.2 million in the year-ago quarter and $390.6 million in the prior quarter.

現在轉向 IDT 第二季度的綜合業績，儘管收入有所下降，但我們的調整後 EBITDA、營運收入和收益均實現了同比增長。然而，收入調整後的 EBITDA、營運收入和獲利隨後下降。本季合併營收為 3.825 億美元，去年同期為 3.942 億美元，上一季為 3.906 億美元。

The year-over-the year and sequential declines primarily reflect fallout the deregulation of the Mexican telecom market that we have discussed previously. Our TPS segment within IDT telecom accounted for 98.5% of IDT's consolidated revenue this quarter. Our largest vertical in TPS, retail communications generated revenue of $168.6 million, a decrease from $182.6 million in the year-ago quarter and $173.7 million in the prior quarter.

年比和環比下降主要反映了我們之前討論過的墨西哥電信市場放鬆管制的影響。 IDT 電信內的 TPS 部門佔本季 IDT 合併收入的 98.5%。我們最大的 TPS 垂直行業零售通訊產生了 1.686 億美元的收入，低於去年同期的 1.826 億美元和上一季的 1.737 億美元。

Within retail communications, sales of IDT's flagship Boss Revolution international calling service, which is the dominant offering in the retail communications vertical, declined 1.8% year over year and 1.3% sequentially. This also primarily reflects the impact of Mexican rate deregulation that we discussed previously.

在零售通訊領域，IDT 的旗艦產品 Boss Revolution 國際呼叫服務（零售通訊垂直領域的主導產品）的銷售額年減 1.8%，季減 1.3%。這也主要反映了我們先前討論的墨西哥利率放鬆管制的影響。

We have left our rates on this route mostly unchanged. As a result of our pricing strategy, we have accepted declines in minutes of use and revenues from this corridor, while softening the impact on our margins and bottom line.

我們對該航線的票價基本上保持不變。由於我們的定價策略，我們接受了走廊的使用時間和收入的下降，同時減輕了對我們利潤和利潤的影響。

We expect the impact of the Mexican rate deregulation to likely dissipate in the coming quarters, even as some of our remaining customer base in this corridor continues to migrate to lower-cost offerings, including our own Mexico unlimited and in app calling plans. Excluding the US to Mexico corridor, Boss Revolution's calling service revenue increased 5% year over year and was flat sequentially suggesting that this particular service is maturing and its revenues have probably reached a peak. Nevertheless, Boss Revolution's calling service will continue to be a hugely important business for IDT, and we intend to leverage its popularity and strong brand for years to come.

我們預計墨西哥費率放鬆管制的影響可能會在未來幾季消失，儘管我們在這一走廊中的一些剩餘客戶群繼續轉向成本較低的產品，包括我們自己的墨西哥無限和應用程式通話計劃。不包括美國至墨西哥走廊，Boss Revolution的呼叫服務收入年增5%，環比持平，顯示這項服務正在成熟，其收入可能已達到頂峰。儘管如此，Boss Revolution 的呼叫服務仍將是 IDT 的一項極其重要的業務，我們打算在未來幾年利用其受歡迎程度和強大的品牌。

That is one of the reasons why I am very excited about the new Boss Revolution app that is now scheduled for release this spring. The new app will enhance the user experience, provide a wider range of services, including messaging and peer-to-peer calling, with other very exciting features to be added in future releases.

這就是我對計劃於今年春季發布的新 Boss Revolution 應用程式感到非常興奮的原因之一。新的應用程式將增強用戶體驗，提供更廣泛的服務，包括訊息和點對點呼叫，以及在未來版本中添加的其他非常令人興奮的功能。

I have a beta version of the app installed on my phone now, and I have to say that our teams in Newark, Lakewood, Finland, and elsewhere have collaborated on this project in an amazing way. Our new app provides all the functionality of the best-in-class OTT services like WhatsApp and integrates them with the Boss Revolution calling and payment services sleekly and intuitively.

我現在手機上安裝了該應用程式的測試版，我必須說，我們在紐瓦克、萊克伍德、芬蘭和其他地方的團隊以令人驚奇的方式在這個專案上進行了合作。我們的新應用程式提供了 WhatsApp 等一流 OTT 服務的所有功能，並將其與 Boss Revolution 通話和支付服務流暢直觀地整合在一起。

Interestingly, in recent months, we have seen the current app's adoption rate pick up as we expand calling options to additional countries and differentiate features geographically. Against this backdrop, it is clear to me that the new Boss Revolution app will quickly become a very popular and rapidly growing part of our business.

有趣的是，近幾個月來，隨著我們將通話選項擴展到更多國家並在地理位置上區分功能，我們發現目前應用程式的採用率有所上升。在此背景下，我很清楚，新的 Boss Revolution 應用程式很快就會成為我們業務中非常受歡迎且快速成長的一部分。

Also beginning this summer, we will roll out a new Boss Revolution retailer platform for our extensive national network. In addition to Boss Revolution's calling service and international airtime transfer, this new proprietary platform will allow retailers to also sell both domestic and international bill payment services, as well as international money transfer and many other services more quickly and efficiently.

同樣從今年夏天開始，我們將為我們廣泛的全國網路推出一個新的 Boss Revolution 零售商平台。除了Boss Revolution的呼叫服務和國際通話服務之外，這個新的專有平台還將允許零售商更快速、更有效率地銷售國內和國際帳單支付服務，以及國際匯款和許多其他服務。

Our significant investment in this new retailer platform represents and is reflective of our commitment to grow our already sizable retailer network, while enhancing the services we offer our retail partners. Our retail network remains a key market differentiator and the source of IDT Telecom's long-term value.

我們對這個新零售商平台的重大投資代表並反映了我們對發展我們已經相當龐大的零售商網絡的承諾，同時增強我們為零售合作夥伴提供的服務。我們的零售網路仍然是關鍵的市場差異化因素，也是 IDT Telecom 長期價值的來源。

Turning to other verticals, wholesale carrier services revenue increased year over year to $147.2 million, even as South American exchange rate-driven arbitrage opportunities that we have discussed in prior periods virtually disappeared. And I must commend our wholesale carrier team who has done a great job of delivering consistent results despite market headwinds.

轉向其他垂直行業，批發承運服務收入同比增長至 1.472 億美元，儘管我們之前討論過的南美匯率驅動的套利機會幾乎消失了。我必須讚揚我們的批發承運人團隊，儘管市場逆風，他們仍然出色地交付了一致的結果。

Later this spring, our wholesale carrier team will also launch a beautifully redesigned new portal that will make it more convenient for both large and small players to utilize our wholesale services. The new portal will be available both on mobile and desktop.

今年春天晚些時候，我們的批發承運人團隊還將推出一個精心設計的新門戶，使大型和小型參與者能夠更方便地利用我們的批發服務。新門戶將在行動裝置和桌面裝置上提供。

Revenue in our payment services vertical climbed to $53.3 million from $49.8 million in the year-ago quarter, a decrease from $55.5 million sequentially. International airtime top-up remained by far the largest component of payment services revenue, but this vertical also includes our emerging payment initiatives including international money transfer.

我們支付服務垂直領域的營收從去年同期的 4,980 萬美元攀升至 5,330 萬美元，較上一季的 5,550 萬美元有所下降。迄今為止，國際通話時間充值仍然是支付服務收入的最大組成部分，但這一垂直領域還包括我們新興的支付舉措，包括國際匯款。

We are continuing to invest significant resources to grow this business, and I want to give you a quick update on our progress. While it is still too small to be impactful to TPS as a whole, I am encouraged by the strong increases we've experienced in international money transfer volumes to our retailer network in recent months. Our team has clearly raised the level of its game, and I have no doubt that our international money transfer business will become increasingly impactful to IDT in the coming months and years.

我們將繼續投入大量資源來發展這項業務，我想向您快速介紹我們的進展。雖然它仍然太小，無法對整個 TPS 產生影響，但近幾個月來我們零售商網路的國際匯款量的強勁增長令我感到鼓舞。我們的團隊明顯提高了遊戲水平，我毫不懷疑我們的國際匯款業務將在未來幾個月和幾年內對 IDT 產生越來越大的影響。

In the second quarter, we also expanded our presence in the space by introducing online money remitting services on the Boss Revolution mobile platform and website. If you haven't used it yet, please give it a try.

第二季度，我們也透過在 Boss Revolution 行動平台和網站上推出線上匯款服務來擴大我們在該領域的業務。如果您還沒有使用過，請嘗試一下。

The remaining vertical in our TPS segment, hosted platform solutions, generated revenue this quarter of $7.7 million. This segment includes our Net2Phone business communications division, which is a high growth business that we are targeting with significant investment and resources.

我們的 TPS 細分市場中剩餘的垂直領域，即託管平台解決方案，本季產生了 770 萬美元的收入。該部門包括我們的 Net2Phone 商業通訊部門，這是一個高成長的業務，我們正在為其投入大量投資和資源。

I mentioned last quarter that Net2Phone is developing a new unified communications platform. Phase 1 of the platform will offer a free inbound cloud PBX service called PickUp with paid premium features. PickUp is a great entry point for startups and small businesses searching for an affordable feature-rich telephony offering that can grow as their business grows.

我上個季度提到 Net2Phone 正在開發一個新的統一通訊平台。該平台的第一階段將提供名為 PickUp 的免費入站雲端 PBX 服務，並具有付費高級功能。對於新創公司和小型企業來說，PickUp 是一個很好的切入點，他們正在尋找價格實惠且功能豐富的電話產品，並且可以隨著業務的成長而發展。

We expect to launch PickUp next month, and I again want to commend our Net2Phone team for doing a wonderful job on it. Meanwhile, Net2Phone's new hosted PBX service offering, Net2Phone Office, has been meeting its growth targets for this fiscal year and we expect it ramp up significantly in the coming quarters.

我們預計下個月將推出 PickUp，我想再次讚揚我們的 Net2Phone 團隊在這方面所做的出色工作。同時，Net2Phone 的新託管 PBX 服務產品 Net2Phone Office 已實現本財年的成長目標，我們預計在未來幾季將大幅成長。

On a consolidated basis, IDT's adjusted EBITDA increased to $11.7 million from $8 million in the year-ago quarter, but decreased from $13 million in the prior quarter. TPS has increased adjusted EBITDA to $11.3 million from $11.1 million in the year-ago quarter, but it decreased from $14.1 million in the prior quarter.

綜合來看，IDT 調整後 EBITDA 從去年同期的 800 萬美元增至 1,170 萬美元，但較上一季的 1,300 萬美元有所下降。 TPS 將調整後 EBITDA 從去年同期的 1,110 萬美元增至 1,130 萬美元，但較上一季的 1,410 萬美元有所下降。

On a consolidated basis, the year-over-year EBITDA increase largely reflects our effort to right size overhead. I am pleased that we reduced consolidated SG&A expense to $51.1 million from $57.4 million in the year-ago quarter, and $53.1 million in the prior quarter.

綜合來看，EBITDA 的年成長率在很大程度上反映了我們為調整管理費用規模所做的努力。我很高興我們將綜合 SG&A 費用從去年同期的 5,740 萬美元和上一季的 5,310 萬美元減少到 5,110 萬美元。

The SG&A level we achieved this quarter was the lowest in at least three years, and reflects among other things decreases in employee compensation from reductions made in FY15. Within the aggregate SG&A total, we decreased corporate G&A expense to $2.1 million from $2.8 million in the year ago quarter. As a percentage of revenue less direct costs, aggregate SG&A expense decreased to 81.4% from 87.7% in the year-ago quarter, but increased from 80.4% in the prior quarter.

我們本季實現的 SG&A 水平是至少三年來的最低水平，除其他外，反映出 2015 財年削減後員工薪酬的下降。在 SG&A 總額中，我們將企業 G&A 費用從去年同期的 280 萬美元減少到 210 萬美元。以收入減去直接成本的百分比計算，SG&A 費用總額從去年同期的 87.7% 下降至 81.4%，但較上一季的 80.4% 有所上升。

Moving to the bottom line, net income attributable to IDT increased to $4.1 million from $2.5 million in the year-ago quarter, but decreased slightly from the $4.2 million we achieved last quarter. Diluted EPS was $0.18 this quarter, an increase from $0.11 in the year-ago quarter and unchanged from the first quarter.

就淨利潤而言，歸屬於 IDT 的淨利潤從去年同期的 250 萬美元增至 410 萬美元，但較上季的 420 萬美元略有下降。本季稀釋後每股收益為 0.18 美元，較去年同期的 0.11 美元增加，與第一季持平。

Looking ahead, we are committed to invest significantly in long-term growth initiatives throughout the Company. We believe that in their totality, these and other initiatives in the pipeline have very promising growth prospects and will gradually transform our business. We are also, as always, committed to operate more efficiently.

展望未來，我們致力於在整個公司的長期成長計劃上進行大量投資。我們相信，總的來說，這些和其他正在醞釀中的舉措具有非常有前途的成長前景，並將逐漸改變我們的業務。我們也一如既往地致力於提高營運效率。

During the quarter, we repurchased $4.6 million of IDT Class B common stock on the open market, which is over 1% of the float. Also during the quarter, we paid $4.4 million in dividends to our shareholders and subsequent to the quarter close, declared a $0.19 per share dividend for the second quarter, which we paid on or around March 25.

本季度，我們在公開市場回購了 460 萬美元的 IDT B 類普通股，超過流通量的 1%。同樣在本季度，我們向股東支付了 440 萬美元的股息，並在季度結束後宣布第二季度每股股息 0.19 美元，並於 3 月 25 日左右支付。

That wraps up my discussion of the quarter's financial and operational results. Now, Marcelo and I would be happy to take your questions. Operator, back to you for Q&A.

我對本季財務和營運表現的討論到此結束。現在，馬塞洛和我很樂意回答你的問題。接線員，回覆您進行問答。

(Operator Instructions)

（操作員說明）

John Rolfe, Argand Capital.

約翰·羅爾夫，Argand Capital。

A couple of questions for you, first on Zedge. Could you just explain a little better -- I mean Zedge's profitability in the quarter was fantastic. I'm just trying to understand how the EBITDA growth sequentially in aggregate dollars was actually greater than the revenue growth. I mean presumably there were some expenses that were running through previously that you were able to carve out or put a stop to this quarter, but what were the underlying dynamics there?

有幾個問題想問你，首先是關於 Zedge 的問題。你能否解釋得更好一點——我的意思是 Zedge 在本季的獲利能力非常出色。我只是想了解以總金額計算的 EBITDA 連續成長實際上如何大於收入成長。我的意思是，可能之前有一些費用是你能夠在本季度削減或停止的，但那裡的潛在動態是什麼？

I guess, it's exactly as you stated in the question. There were some expenses that were one time in the past quarter that didn't end up this quarter.

我想，這正是你在問題中所說的。有些費用在上個季度曾發生過，但本季沒有結束。

Hi, John. This is Marcelo.

你好，約翰。這是馬塞洛。

Also bear in mind that most of the costs that Zedge incurs occur in the hub, which is in Norway. So most of their expenses are the kroner denominated. From the (multiple speakers) side, most of the cash flows are from sales that happened here in the US, which is dollar denominated and therefore, when the dollar is strong, it really helps.

請同時記住，Zedge 產生的大部分成本發生在位於挪威的樞紐。所以他們的開支大部分都是以克朗計價的。從（多個發言者）方面來看，大部分現金流來自在美國發生的銷售，這是以美元計價的，因此，當美元堅挺時，它確實有幫助。

Okay. Got it.

好的。知道了。

And can you talk a little bit about where you stand in terms of getting some of the issues with the Apple iTunes store resolved? There have been some issues in terms of Zedge's remaining compliant with some of Apple's terms, and I know you have been working to get that resolved. But just wondering if you have any sense on timing there.

您能否談談您在解決 Apple iTunes 商店的一些問題方面的立場？ Zedge 在遵守 Apple 的一些條款方面存在一些問題，我知道你們一直在努力解決這個問題。但只是想知道你是否有把握時機。

We submitted the new app yesterday, and we expect it to be approved.

我們昨天提交了新應用程序，預計它將獲得批准。

Okay. Okay, great. That's good news. And then secondly, in terms of TPS, look, I understand the concept behind negative operating leverage and why you saw a sequential decline in EBITDA as a result. I am just trying to understand what was different in terms of Q1 to Q2 versus Q4 to Q1, because in Q4 to Q1 you were also experiencing the headwinds in the Mexican corridor and you had some aggregate revenue declines, but you were still able to maintain, and even increase your EBITDA. So what was sort of the difference in the dynamics between those two quarters, or those two sets of quarters?

好的。好的，太好了。那是好消息。其次，就 TPS 而言，我了解負營運槓桿背後的概念，以及為什麼您會看到 EBITDA 連續下降。我只是想了解第一季到第二季度與第四季度到第一季度的不同之處，因為在第四季度到第一季度，您也遇到了墨西哥走廊的逆風，總收入有所下降，但您仍然能夠維持，甚至增加您的 EBITDA。那麼這兩個季度或兩組季度之間的動態有何差異呢？

The large amount of the decrees relating to Mexico impacted us a lot more year over year and sequentially when it came to Q2. And that was offset by some extent by -- in Q1 we had more of the growth on all of the regions to offset some of the Mexico decline.

與墨西哥相關的大量法令對我們的影響比去年同期和第二季的影響都要大得多。在第一季度，我們所有地區的成長都在一定程度上抵消了墨西哥的部分下滑。

When we went into Q2, the growth in the other regions was basically flat, and therefore we felt the impact in the Mexico corridor revenue decline a little stronger. On the flipside as it comes to SG&A, our SG&A in Q2 was significantly lower than in Q1 as we continued to feel the impact -- the positive impact of some of the cost-cutting and other initiatives that we have had in place already a couple of quarters ago. So the net-net out of EBITDA came out pretty close to what we saw in the previous quarters.

當我們進入第二季時，其他地區的成長基本上持平，因此我們感覺到墨西哥走廊收入下降的影響稍微大一些。另一方面，就SG&A而言，我們第二季度的SG&A明顯低於第一季度，因為我們繼續感受到影響——我們已經實施的一些成本削減和其他舉措的積極影響幾個季度前。因此，EBITDA 的淨額與我們在前幾季看到的非常接近。

Okay. Okay, got it.

好的。好，知道了。

And then lastly, can you just repeat what did you say your expectation was on the timing of the full rollout for the Boss Revolution app?

最後，您能否重複您對 Boss Revolution 應用程式全面推出的時間的期望？

We're hoping that it will be rolled out in the next two months. I have a beta version of it on my phone right now. But it's going through Q&A and testing and we've got to make sure it's solid before we release it.

我們希望它能在未來兩個月內推出。我的手機上現在有它的測試版。但它正在經歷問答和測試，我們必須在發布之前確保它是可靠的。

Okay, great. Thanks very much.

好的，太好了。非常感謝。

(Operator Instructions)

（操作員說明）

This concludes our question-and-answer session and conference call. Thank you for attending today's presentation. You may now disconnect.

我們的問答環節和電話會議到此結束。感謝您參加今天的演講。您現在可以斷開連線。