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Communication Services - Telecommunications Services - NYSE - US
$ 49.37
-0.464 %
$ 1.25 B
Market Cap
19.91
P/E
EARNINGS CALL TRANSCRIPT
EARNINGS CALL TRANSCRIPT 2022 - Q1
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Operator

Good evening. And welcome to the IDT Corporation’s First Quarter Fiscal Year 2022 Earnings Call. In today’s presentation, IDT’s management will discuss IDT’s financial and operational results for the three-month period ended October 31, 2021.

During prepared remarks by IDT’s Chief Executive Officer, Shmuel Jonas, all participants will be in listen-only mode. [Operator Instructions] After Mr. Jonas’ remarks, Marcelo Fischer, IDT’s Chief Financial Officer will join Mr. Jonas for Q&A.

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.

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.

In their presentation or in the Q&A session, IDT’s management may make reference to non-GAAP measures, including adjusted EBITDA, non-GAAP net income and non-GAAP earnings or loss per share.

A schedule provided in the IDT earnings release reconciles adjusted EBITDA, non-GAAP net income and non-GAAP earnings or loss per share to the nearest corresponding GAAP measures. Please note that the IDT earnings release is available on the Investor Relations page of the IDT Corporation website.

The earnings release has also been filed on Form 8-K with the SEC. I will now turn the conference over to Mr. Jonas..

Shmuel Jonas

Thank you, operator. Welcome to IDT’s first quarter fiscal year 2022 earnings call. I’m joined on the call by Marcelo Fischer, IDT’s Chief Financial Officer, and we’ll both be available to answer questions after my remarks. My discussion today focuses on our first quarter fiscal 2022, the three months ended October 31, 2021.

For a more detailed report and discussion on our financial and operational results, please read our earnings release filed earlier today and our Form 10-Q that we expect to file with the Securities and Exchange Commission on Friday.

Our first quarter operational results were [Indiscernible] strong once again, highlighted by robust performance from our high-margin net2phone, NRS, and BOSS Money businesses, as well as from Mobile Top-Up. As a result, we delivered year-over-year increases in revenue, gross profit, income from operations, and Adjusted EBITDA.

At our net2phone-UCaaS segment, subscription revenue increased 37.5% year-over-year, and revenue and margin increased 20 basis points to 82.3%. Both our subscription revenue growth and revenue margin rates remain well above industry averages.

In the United States, our expanding network of channel partnerships drove a 42% year-over-year increase in UCaaS subscription revenue, while in Latin America, our strategic focus on mid-sized businesses, multi-channel go-to-market strategies, deeply localized in-country offerings all helped to increase UCaaS subscription revenue by 58%.

Net2phone has been getting especially strong traction in several markets, including Mexico, where service revenue increased nearly 150%. This quarter, we landed a leading restaurant franchise, and of course, are also closing deals with small enterprise clients throughout Mexico.

Across net2phone’s market, our commitment to provide every customer with top-notch service regardless of size continues to help us win new business, many as a result of referrals from existing satisfied customers.

[Technical Difficulty] net2phone won the Global Partner of the Year award from UC Today, a popular news service covering the business communications and collaborations industry. Net2phone was recognized for providing exceptional performance and solution through our global channel partners.

Never content with the status quo, we continue to work on driving channel partner penetration. In 2022, we will provide our managed service partners with real time account access, enabling them to directly support, configure and modify their clients’ accounts.

This will better enable our partners to focus more on customer experience, while enabling to focus their efforts on high-value services.

At NRS, strong demand for NRS PAY payment processing, and our recently launched funding service to provide retailers with ready working capital, digital advertising and transaction data services, coupled with the continued expansion of our POS network, boosted NRS revenue by 104% year-over-year to $10.1 million in the first quarter.

Recurring revenue, which excludes revenue from the sale of new terminals, increased 126% to $8.6 million. As of October 31st, NRS had over 15,100 active terminals. One of the strategic strengths of NRS is its ability to leverage our platform to provide new offering.

This opens new markets, creates additional revenue streams to boost ARPU and accelerates growth in our terminal network.

This quarter, we deployed software that enables retailers to process electronic benefits provided by the supplemental nutrition program for women, infant and children nationwide which provides nearly $5 billion in benefit annually to over 6 million beneficiaries.

Most states have transitioned or are transitioning to pay these benefits electronically, known as eWIC. Our eWIC payment processing solution is a game changer for our merchants, providing an affordable, fully integrated solution to serve this channel.

Until now, only larger retail chain stores or those able to pay hefty fees for eWIC payment processing could accept eWIC transactions. We have already begun to roll out our affordable eWIC offering working with our retailers, benefit managers and state regulators to certify our solution state-by-state. Money Transfer had an exceptional quarter.

Revenue increased nearly 15% sequentially to $12.5 million. Although the first quarter ‘22 revenue decreased 18% compared to the year-ago quarter, the decline is entirely due to the impact of our transitory foreign exchange market conditions that materially improved revenue and gross profit during calendar 2021.

Absent that impact, first-quarter fiscal 2022 revenue increased by 45% from the year-ago quarter. Traditional Communications revenue increased 6.7% year-over-year to $334.6 million. Within Traditional Communications, Mobile Top-Up revenue increased 34.1% to $128.5 million, and IDT Global carrier services revenue climbed slightly.

These increases more than offset a decline in BOSS Revolution Calling revenue in line with expectations. Our Mobile Top-Up business generated double-digit year-over-year growth in its three largest sales channels, strengthening its unique position as the only significant omnichannel player in the top-up space.

All our Mobile Top-Up regional corridors continue to expand, led by the U.S. to Africa corridor. Sales of top of bundle which include both airtime and data are key in growth. These data bundles now account for roughly 30% of our total sales, and that helped increase average revenue per transaction by 11%, compared to the year-ago quarter.

We forecast that demand for data packages will continue to drive revenue and revenue per transaction increases. On a consolidated basis, income from operation and adjusted EBITDA both increased modestly compared to the year-ago quarter, rising to $13.8 million and $18.3 million, respectively.

This quarter, we had a loss per share of $0.10 compared to EPS of $0.32 a year ago, plus an unrealized $0.49 per share loss on the mark-to-market value of our investment in Rafael Holdings stock.

Looking ahead, we are making good progress and expect to be in a position in early 2022 calendar year for the potential spin-off of net2phone should our Board authorize it. To wrap up, this is a strong quarter for each of our high-margin businesses and sales of Mobile Top-Up continued to drive growth in our Traditional Communications segment.

Now, Marcelo and I would be happy to take your questions. Thank you..

Operator

[Operator Instructions] The first question is coming from Daniel Koch from Alta Fox Capital..

Daniel Koch

Hey, guys. Congrats on a strong quarter across the board. The NRS numbers look pretty great, specifically the strong ARPU in the quarter. Can you shed some light on the drivers of the ARPU growth? And maybe how we should think about ARPU growth going forward from here? Thanks..

Marcelo Fischer

Yes. Hi Dan, thanks for joining the call today. Yes, we at IDT as well are very, very pleased with the progress that we have seen at NRS. While we try to shy away from giving specific guidance, let me just share with you some specifics on what NRS has been doing recently.

On the SaaS-based fees vertical, where we charge our retailers monthly, we continue to look at ways to increase the SaaS fees per terminal, right? We think we can accomplish this by partnering with our retailers to understand their specific needs, to develop solutions to these needs and then finding ways to up charge for these features.

And when we think about NRS PAY and the merchant services vertical, we will continue to focus on growing the payment processing side of the business and offering that very compelling solution to our retailers.

Now, our offer today is very valuable, right? We offer our retailers a no contract, free equipment, a multiple plan approach with live customer service. And also more recently, we have been able to start onboarding higher-risk retailers such as like tobacco shops, and there the processing fees are higher.

So, while our focus so far has been on the small independents that also purchased our POS system, in reality, NRS PAY is now in position to expand payment processing services beyond this channel as well.

Like another merchant service product that NRS have launched recently, which you may have heard about is called NRS Funding, which provides our retailers access to capital in a very easy and seamless process. So, it’s still very early. But to-date, we have provided over 100 loans.

And then, when we think about like our digital-out-of-home vertical, we are seeing that this market continues to grow rapidly. And as we sell more POS terminals, so those are available inventory increases.

So, for example, if an advertiser wants to offer advertising in California and then we need to pay X dollars per terminal in California, obviously, the more terminals we have in California, the more is the amount of dollar advertising that we’re going to generate.

So, advertising and data partners are starting to know this more and more how our model can directly impact their business. And this is translating into the strong growth that you saw this quarter, where you saw advertising up sequentially about 150%.

So, that -- and last but not least, we have a multipronged approach when it comes to expanding our POS and our NRS PAY terminal network. We have today three different complementary sales channels. We have one, a growing inside sales team. We also have our own boots in the ground sales force, making in-person visits to retailers nationwide.

And on that, we leverage that sales force together with our other IDT offerings at retail, such as BOSS Revolution products, [Indiscernible], Money Transfer and Top-Up. And we also have a well-established third-party distributor channel.

So, our continued investment in developing all three of these sales channels is really critical to our continued success. So, if the team continues to focus on all these types of items, it should really translate into a very healthy growth rate for NRS going forward..

Operator

The next question is coming from Brian Warner, private investor..

Brian Warner

Congratulations. Two questions. The first is on NRS. I thought, in your commentary, you mentioned maybe some small loans to merchants that you had started.

Did I hear that right? And can you just give us sort of a 5,000 square foot view of how you think about sort of that business and maybe a banking charter?.

Shmuel Jonas

Well, again, we don’t do loans. We do merchant cash advances. Right now, we’re -- unlike say [Technical Difficulty] become a bank, we haven’t taken that step. And again, as Marcelo said, it’s small right now [Technical Difficulty]..

Brian Warner

Sure. Okay.

So, just so I understand properly, you were actually just -- you were talking about cash advances, which is nothing new?.

Shmuel Jonas

Correct..

Brian Warner

I got you. Okay. That actually answers that one. My second question regard the Money Transfer business. There seems to be a general concern that pricing in that business is on a downward [skew] (ph) and is going to be sort of a big headwind or at least some people sort of think that.

And I know you’ve sort of commented in the past there may be some other a little more creative ways to make money sort of in-country or differently sort of than you have in the past.

Can you give us a sort of a 2, 3, 4-year view of what you think that business is capable of doing? And do you think that that franchise can continue to grow at a healthy rate?.

Shmuel Jonas

Yes. I mean, I’d say two things. Like, I don’t -- again, I don’t know the timeline for when change exactly happens. Sometimes you expect something to happen in 6 months and it ends up happening in 10 years.

And when it comes to pricing on Money Transfer, I can tell you already that you have Facebook announced their first, I’ll say, country, I think -- their product is called Novi. And they announced that to Guatemala. And again, as I had spoken about, I believe, last quarter -- nobody does anything for free.

Like I don’t remember the saying, the saying about any product that’s free, like if it’s free, then you [Technical Difficulty] they’re selling. When it comes to social media, as we’ve all seen with Facebook, they [Technical Difficulty] charge you to use Facebook, but they seem to make $30 billion a quarter now I think. And so, you are the product.

So again, Money Transfer is not going to be different in that sense. Like it’s not going to be free. Like there is a cost of compliance. There’s a cost of banking, et cetera, et cetera. I mean there’s just a lot of cost in the business. And you can’t just afford to give that away for free.

Maybe to a degree it can be supported on a short-term basis promotionally. But long term, they have to make a profit. So, again, my own opinion -- and again, this isn’t in terms of a timeline, I don’t have them. But my own opinion is like over time, money transfers are definitely going to get significantly less expensive.

So now, whether or not the cash money transfers, the people are doing in-stores versus the online money transfers that people are doing today, which one of those has a more rapid change in the pricing, I can’t tell you for sure. I’ve heard different people argue both ways on which one will change faster.

And I can see arguments why cash will be harder to, I’ll say, change. But I can see by the same token, there’s a lot more margin there. And sometimes that’s the easier one to change than online competitors. But I do definitely think at the end of the day that you are going to need to make money in-country.

And you’re seeing numerous services of -- we’re now able to open up 22 -- in 22 countries, we’ll be able to open up basically a Visa card where people can use to spend money in country, and we’ll be making money on every transaction that people are doing in that country.

And we’ll be able to lower our pricing because we’ll be able to make money that way. And that is what I see as the future of it. In terms of our growth rate, I mean, again, I think that we are doing very well on Money Transfer. I’m pleased that we now have retail growing again and online is doing quite well as well, thank God.

And we’re just trying to focus on improving the product, more customers to use it, getting them to be stickier, et cetera, et cetera. So again, we can’t control what’s happening everywhere in the world, but we can do our best to control what we can control..

Operator

[Operator Instructions] We have a question coming from David Polansky from Immersion..

David Polansky

Great job on NRS as per usual. High level, like what is the opportunity on terminal deployments? I mean, this kind of started in the independent bodegas. You’re up to 15,100 installs now. Where does that go over time? Because I’ve seen that you’re in beauty salons, you’re in some coffee shops, you’re in grocers, you’re in tobacco and liquor.

Like, how should we think about like maybe five years out, how many terminals you could have deployed and kind of just thinking about the market broadly?.

Shmuel Jonas

I don’t know the answer to that question. That’s the first thing I would say. What I would say is that the amount of deployments that we’ve done recently has increased, and we see it continuing to increase. So, I definitely think that there is no slowdown on the horizon.

What I would say is that you’re right that each one of those verticals that you discussed at seeing some of our terminals in are verticals that we really don’t completely serve today with the exception of independent convenience stores. And each one of those is an opportunity for us to grow probably tens of thousands of terminals in.

Each one of those is also a separate business line. I mean, right now, we’re starting to work on a new business line, which I’m not yet ready to talk about. But we believe that will be something that’s capable of adding 10,000 terminals to our, I’ll say, network. I mean, we’ve talked about Petro in the past.

And again, those are a smaller number of deployments. They tend to be larger volume stores than -- stores and credit card processing than our independent convenience stores. But that’s another market that has tens of thousands of locations available for us to go after. So, I really think we have really only scratched the surface of what we can do.

And that’s only in the U.S. I mean, I think there’s definitely opportunity in international markets for our services, and we’re starting to deploy our first units in Canada. And again, we’re very excited about where the business is going..

David Polansky

Sorry. You said you’re starting to deploy in Canada.

Is that what you said?.

Shmuel Jonas

That’s correct. Yes..

David Polansky

And on this opportunity that you’re not ready to talk about, are you talking about a new vertical, or is that like an enterprise contract? So, can you go....

Shmuel Jonas

A new vertical. I mean, we’re really not focused on enterprise, like that. That’s the -- I mean, that’s the one thing I would say for sure is -- we think that that’s a saturated market.

And frankly speaking, it’s -- it requires a different kind of sales force and a different -- it’s a very different business, frankly, than who we focused on supporting today. And we don’t see ourselves as going after that space any time in the next couple of years, at least..

David Polansky

Great, excellent. And so, on payment processing accounts, you’re at 6,800, so that’s 45% of your base and a year ago, you were at 28%.

Do you -- like where do you see that going? Like, can that get to 80%, 90% over time? How should we think about that?.

Shmuel Jonas

I don’t know if it can get to 80% or 90% over time. I mean, I think that it will, personally, I mean, but I don’t know if I’m right. I would say that we’re already signing up probably two-thirds of our new customers on to merchant processing.

And we are definitely making an effort now to start to convert customers that signed up with us earlier without merchant services to get them on as well. But, we -- again, like keeping up with the growth has been tough. And frankly speaking, like we haven’t really even focused on going after, I’ll call it, our base of customers.

So, so much like we really focus on making sure all the new customers that we get in, get turned up. But over the next quarter, we’re hoping to add a bunch of salespeople and installation people that will help us go after our existing base of accounts..

David Polansky

Right.

And your Merchant Services revenue, are you reporting that net of fees? So, is that really like a gross profit number?.

Shmuel Jonas

That’s a gross -- yes, I mean it is net of fees..

Marcelo Fischer

It’s not of fees. So therefore, the revenue is really 100% gross profit..

David Polansky

Okay. So, like....

Shmuel Jonas

Again, I’ve read other of our -- I won’t say competitors, I’ll say I’ve read other people in the spaces numbers and most of them do not report it that way..

David Polansky

Right. So you would be reporting, I mean, I think over $100 million in revenue for NRS, if you were to report it gross.

Am I off by saying that?.

Shmuel Jonas

I don’t want to say that you’re off. I never did the translation, our numbers to their numbers. I can say that ours are net..

David Polansky

Okay. All right. Well, I mean, I think it’s over $100 million if you’re doing your….

Shmuel Jonas

It very well could be..

Marcelo Fischer

You check it out..

David Polansky

Yes. So, I mean, I guess, just broadly speaking, going back to what you said earlier, my questioning was, you really don’t see a slowdown in growth. I mean you got a pretty good runway. You got a good upsell engine. You have ARPU expansion. You already have 80% gross margins.

I mean, this is -- I mean, this could really be like $100 million ARR business, net of the merchant services, in a couple of years. So, if you look at the valuation....

Shmuel Jonas

We hope so. We hope sooner..

David Polansky

Yes. But I mean, that’s like $1 billion in enterprise value and the entire stock today is at 1 point -- what is it, $1.3 billion, $1.4 billion.

So, I guess like how do you think about that? And how do you think about the timing of a potential spin for NRS?.

Shmuel Jonas

Again, we’re -- we don’t want to commit to a time line at this point in terms of a potential spin. Right now, we’re really focused on, a, getting our spin that’s already announced on. And once we’ve completed that, we’ll start to think about others.

But again, we’re right now focused on building this into a huge business, and that’s our number one priority..

David Polansky

Well, I think it will be a huge business. And you look a few years out, I think this -- the stock is tremendously undervalued, if you just think about where NRS could be in a few years. But anyway, I’ll get off my soapbox. I really appreciate you guys taking the time to take more questions..

Operator

The next question is coming from Adam Wilk Greystone Capital Management..

Adam Wilk

Really impressive quarter in a number of areas. I’ve been incredibly impressed with the recent efforts of NRS and Mobile Top-Up specifically. So, starting with NRS, can we talk a little bit about the data and advertising opportunity. So clearly, pretty significant growth in that segment.

And I’m wondering how you guys are kind of thinking about that opportunity moving forward in terms of maybe signing new deals with third parties or CPG companies or growing ARR or what you kind of think the ceiling is there? Although I know it’s early stages, but I’d be interested in your thoughts..

Shmuel Jonas

I mean, it’s definitely early stages. I don’t have -- I don’t know where the ceiling is. I think all I can say is I think we’re very, very far from it. In terms of new relationships, we continue to sign new large advertising partners. We signed some very large deals this week. And we don’t see any slowdown.

In terms of the data partners, all of the data partners that we sell to are adding more things that they’re buying from us. So again, we see no slowdown in that side of the business either. We are adding a number of people because like everything else, you have to get your story out there and in front of the right people.

And someone who talked about our enterprise sales. We don’t do enterprise sales for POS. But when it comes to advertising and data, that is an enterprise sale. And we are bringing on a bunch of new people. Some have already started. We have a really great team. And we think it’s going to be a sizable part of the business going forward.

And I don’t know if I can give you more clarity than that.

But did you have a second question that I missed?.

Adam Wilk

I did. Just -- I haven’t asked, but I appreciate that color. That’s helpful. For Mobile Top-Up, again, another segment that’s been incredibly impressive in terms of your recent efforts and kind of propping up Traditional Communications overall.

And I’m kind of just wondering how you guys are thinking about growing this business moving forward, whether you’re looking at geographic expansion or I guess, highlighting some of the unit economics or breaking some of the stuff out or maybe making a push into more of that direct channel versus retail, and I’d be interested in your thoughts there as well?.

Shmuel Jonas

I mean, I’m going to let Marcelo answer a little bit of the question because he’s been doing more of the work on that in the background in terms of breaking it out and what have you. What I would say is from a sales perspective, and again, I think I also talked about this a little bit last quarter.

Again, to a degree the growth in this business was surprising to us. And we’re really putting in place a team, sort of as we speak, to capitalize on the growth. We’ve made some small acquisitions in the space that have really helped us grow geographically.

And we’re looking at some more small acquisitions as well to help enhance the product and the technology. But again, this is a business again where we really think that, a, we have a very small piece of the market; and b, we’re really, right now, only a U.S. and Africa player.

And we think that there’s a ton of market share to be gotten, and we intend to have a very, very sizable and predictable business..

Marcelo Fischer

Yes. I mean, Mobile Top-Up business today is a U.S. story. And our plan is really -- the objective of trying to bring this business to be a large business outside of the U.S. as well in terms origination. And our entry to Africa has more recently had accelerated some of that.

At the same time, we are also not just a one pony show -- only selling Mobile Top-Up. And really the goal is for that business to be really a leader in all type of digital prepaid offerings. So, we are just starting to increase the product portfolio and starting to add vouchers and subscriptions into that business.

That’s a very large opportunity for us. Recently, we’ve seen that some private equity investment into that space. I think we had a company which we know well called wi-charge.com, just got a nice funding of about $35 million private equity funding into the business. So there’s a lot of opportunity and interest in those type of fintech opportunities.

And we could realize that this is becoming an area of large interest.

Internally at IDT we’re trying to also to carve out the economics of that business away from the rest of the Traditional Communications products, not only carve out from an accounting perspective, but even managerially, we are trying to make MTU to become more independent in its operations, in terms of its management team and resources.

Today, obviously, the top-up business shares a tremendous amount of resources all across the spectrum with our other U.S. offerings, especially [indiscernible] and Money Transfer sales force along the operations people, a lot of it in technology in some areas. So, we are going through that process.

And our ultimate goal is to be able to educate to ourselves as well as to our investors how does that business truly look from an economic perspective, if it was a carved-out operation. And once we get better at doing that, we’ll be glad to share that with our investors..

Adam Wilk

Great. Yes, that’s -- I really appreciate that. That’s helpful. And I’m glad you guys are kind of thinking about it that way. And I would echo David’s comments as well, and I’m looking forward to watching you guys continue to execute. So, thanks again for taking my questions, and great job..

Marcelo Fischer

Thank you..

Operator

[Operator Instructions] We have a question coming from Kevin Zhang from Tribunal Capital Ventures..

Unidentified Analyst

I’d echo the thoughts mentioned by Adam and David, I think IDT as a business in challenges doing great. You guys are executing well. I just had a few questions on Mobile Top-Up in general. So, you mentioned that you guys have recently extended with your acquisition of the African Mobile Top-Up business.

I was just curious how that’s been going? Like any color on that acquisition progress? Like has revenue been inflecting? Any sort of color there would be great..

Shmuel Jonas

Yes. I mean, I’ll let Marcelo speak about the specifics related to the financials of it. From an operational standpoint, I can tell you that they are being very well integrated into the Company. Tomorrow -- I’m sorry, not tomorrow, Thursday, we have a Company-wide kickoff, and they will be presenting about their business to everyone.

And they’re joining all of our meetings that we have with carriers around the world and tell them about their abilities of selling into Africa as well as, I’ll call it, pan-Africa as well. And it’s been -- it’s really been a very good partnership. And they’re great guys. So, I mean, we’re very happy to have them on board.

I’ll let Marcelo answer a little bit on the P&L related to them..

Marcelo Fischer

Sure. Yes. Hi, Kevin Yes, the company that we acquired is no new -- it’s not a new relationship to IDT. We have been doing business with them for more than a decade. They are -- they have been one of the largest aggregators supplying to us, the Mobile Top-Up time for African MNOs for a long time.

So effectively, what we have done is we acquired them, a majority stake on them. And by doing that, we have been able to kind of verticalize, right, the relationship. And now, we have direct access to the MNOs, which previously we did not.

Okay? So, that improves the cost that we get for time for African carriers, and having a lower cost allows our team in the U.S. to price Mobile Top-Up offerings better in the marketplace. And by doing so, they’ll be able to gain market share and expand the market in the U.S.

So, they also have, in some ways, platform, especially on the B2B side, platform, which are probably better than what we had in IDT, and we are in the process of incorporating their platforms into ours, and taking the best of both.

So, it’s a real good relationship, initiative we have known for a long time and the integration, the synergies, the pricing, the cost, and approach to go to market have been very strong.

And because of the fact that they have boots in the ground in several African countries, it also opens our ability to market our products in that continent faster as part of our international growth strategy..

Shmuel Jonas

And I would add one more thing to what Marcelo said is that they, on their own have been doing quite well in sales to African carriers and their own margins have improved..

Unidentified Analyst

I see. No, that’s amazing to hear. I’m glad that it’s -- the integration is going well and that in terms of the P&L, it’s also pretty good in terms of reducing costs and verticalizing relationship. And this is for Marcelo specifically. I think you mentioned like that there was private equity interest in the business.

My internet was a bit shaky, so I’m not sure if I heard it right, like a $35 million like unsecured -- so can you give any color on that?.

Marcelo Fischer

Yes. I think that recently, if I read correctly, I think there is a company, we know them well, I mean that with ours, wi-charge.com. [Ph] I think be -- I believe the private equity funding recently are probably around for about $35 million.

It’s just anecdotal, right, example of the fact that now people are interested in this type of Mobile Top-Up and all the prepaid digital offerings right now..

Unidentified Analyst

Got it. That makes sense. I guess, one last question about Mobile Top-Up. So, I think you guys have talked a lot about how you guys are mostly in the United States right now and domestic, but you’re thinking about doing some sort of expansion outwards. And so just looking at like year-over-year growth, Mobile Top-Up is somewhere around like 30%, 40%.

I’m curious, like do you think that it’s going to trend down from here over the next few years or that is like an inflection point? And like what -- maybe like a general range for where you see this business in like a few years? I know you guys think it will be big, for sure.

But just curious on those numbers?.

Shmuel Jonas

Yes. I mean I don’t see it trending down. That’s for sure. I mean, what I would say is that we need to build out some of the capabilities to take advantage of the amount of growth that there is out there. And that comes both on the direct-to-consumer side.

Again, right now, we’ve been focused on acquiring customers in the U.S., and we haven’t focused on acquiring customers outside of the U.S. And that means that we have to hire D2C marketing, personnel essentially in each of the markets that we go after because each one of them is different.

They all need their own SEO and SEM, and they all have their own advertising partners and their own -- and then from a technology point of view, you need to be able to accept different payment types in different countries. And you need to make sure that your foreign exchange is competitive with whatever is in those markets.

So again, I think that it might be, I’ll say, not linear growth internationally. But definitely, over time, I think that the amount of growth that we could get from international is way in excess of 30% a year even -- I think that that would be an understatement..

Unidentified Analyst

Great. Sorry, I just though a new question while you were answering. So one last one for real. So I was thinking in terms of just the take rate for Mobile Top-Up. So, I guess, two parts to this question.

One, so obviously, the next expansion, the next step is international, right? I was just curious on the dynamics in terms of the take rate, whether or not like the take rate would kind of trend down internationally and just on average, be lower? And I guess, the second thing I would ask is just like in general, I like Mobile Top-Up.

Obviously, you guys have like great cost structure. So, you guys are probably getting a better take rate than most other Mobile Top-Up businesses.

I’m just curious if you guys see if there’s going to be competitive pressure that would push down the take rate? And if you think you guys could be able to spend that off or if you think that will probably shed some take rate loss over time?.

Shmuel Jonas

I think I mean, domestically, I think that we have done a good job of improving, I’ll call it, our take rate by moving more of the business to direct-to-consumer and negotiating really good deals. As far as internationally, again, we don’t have as much experience with it.

We definitely don’t think that in every country, we’re going to be able to get the same take rates that we have here in the U.S. But we think that there are certain countries that have better economics and certain that have worse. I mean, we’re hoping that when it equalizes out, that it will be similar to where the U.S.

is, but it might end up being slightly lower..

Unidentified Analyst

Got it. All right. Thank you so much. Did you have something else you wanted to additional? Sorry..

Shmuel Jonas

No, that was it..

Operator

As there are no more questions, this concludes our question-and-answer session and conference call. Thank you for attending today’s presentation. You may now disconnect..

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