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IDT Corporation reports 90.4% EBITDA growth in 2020 and 1.5 pp EBITDA Margin growth from 1.5% to 3.1%

10/01/2020 • About IDT Corporation ($IDT) • By InTwits

IDT Corporation reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • IDT Corporation is a company in decline: FY2020 revenue growth was -4.5%, 5 years revenue CAGR was -3.4%
  • EBITDA Margin is relatively stable: 3.1% in FY2020 vs. 1.5% in FY2019 vs. 3.1% in FY2016
  • IDT Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 1.2%
  • CAPEX is quite volatile: $0m in FY2020, $1m in FY2019, $2m in FY2018, $0m in FY2017, $0m in FY2016
  • The company has highly profitable business model: ROIC is 25.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

IDT Corporation's Revenue decreased on 4.5%. Annual revenue decline showed slowdown in FY20Q4 - revenue increased slightly on 1.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.5 pp from 1.5% to 3.1% in FY2020.

Gross Margin increased on 2.8 pp from 16.7% to 19.5% in FY2020. During the last 5 years Gross Margin bottomed in FY2017 at 15.1% and was growing since that time. SG&A as a % of Revenue increased slightly on 1.5 pp from 14.5% to 16.0% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue bottomed in FY2017 at 12.5% and was growing since that time.

Net Income margin increased slightly on 1.6 pp from 0.0095% to 1.6% in FY2020. During FY2016-FY2020 Net Income margin bottomed in FY2019 at 0.0095%.

Investments (CAPEX, working capital and M&A)

IDT Corporation's CAPEX/Revenue was 1.2% in FY2020. IDT Corporation's CAPEX/Revenue showed almost no change from FY2017 to FY2020. Average CAPEX/Revenue for the last three years was 1.3%. During the last 5 years CAPEX as a % of Revenue topped in FY2017 at 1.5% and was declining since that time.

Return on investment

The company operates at high and attractive ROIC (25.0%) and ROE (32.7%). ROIC surged on 27.2 pp from -2.2% to 25.0% in FY2020. ROE surged on 32.4 pp from 0.31% to 32.7% in FY2020. During the last 5 years ROE bottomed in FY2019 at 0.31%.

Leverage (Debt)

Company's Net Debt / EBITDA is -1.8x and Debt / EBITDA is 0.2x. Debt jumped while cash increased on 5.9%.

IDT Corporation has no short term refinancing risk: cash is higher than short term debt (3,611.1%).

Valuation and dividends

The company's trades at EV/EBITDA 4.5x and P/E 12.2x.

Management team

Shmuel Jonas is a the company's CEO. Shmuel Jonas has spent 6 years with the company. The company's CFO is David A Polinsky. David A Polinsky has 2 years tenure at the company.

Financial and operational results

FY ended 07/31/2020

IDT Corporation ($IDT) key annual financial indicators

mln. $201620172018201920202020/2019
Gross Profit25022624123526211.3%
Net Income248402115,892.5%
Balance Sheet
Short Term Debt00002
Long Term Debt00007
Cash flow
Revenue growth-6.3%0.4%3.0%-8.9%-4.5%
EBITDA growth-58.1%-41.7%14.4%-30.6%90.4%

Gross Margin16.7%15.1%15.6%16.7%19.5%2.8%
EBITDA Margin3.1%1.8%2.0%1.5%3.1%1.5%
SG&A, % of revenue13.7%12.5%13.1%14.5%16.0%1.5%
Net Income Margin1.6%0.5%0.3%0.0%1.6%1.6%
CAPEX, % of revenue1.2%1.5%1.3%1.3%1.2%-0.1%

Net Debt/EBITDA-2.3x-3.3x-2.2x-3.7x-1.8x1.9x

IDT Corporation ($IDT) key quoterly financial indicators

mln. $FY20Q1FY20Q2FY20Q3FY20Q4 YoY change
Revenue340324321360 -6.1%-7.3%-5.8%1.2%
EBITDA571020 -20.1%36.1%63.0%-
Net Income-21121 ---76.1%-
Balance Sheet
Cash62615285 4.8%-17.9%-34.7%5.9%
Short Term Debt2222 ----
Long Term Debt9987 ----
Gross Margin17.9%18.9%19.4%21.5% 2.0%2.2%2.3%4.4%
EBITDA Margin 1.4% 2.2% 3.0% 5.4% -0.2%0.7%1.3%5.7%
Net Income Margin -0.4% 0.3% 0.2% 6.0% 0.2%0.7%-0.5%6.7%

Peers in Integrated Telecommunication S

Below we provide IDT Corporation benchmarking against other companies in Integrated Telecommunication S industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.