David Polansky: Great. Thank you. On terminal sales and signing on new relationships, can you give us an update on how many of those sales are coming from direct NRS versus maybe a IDT salesperson from a traditional channel just to help us kind of think about, is NRS ready to sort of stand on its own so to speak or you are still relying heavily on the traditional IDT distribution channels?
Samuel Jonas: I don’t have the numbers in front of me for this quarter in terms of where units are sold from, but I would say that we are still getting about a third from IDT, about a third from direct and about a third through distribution channels.
David Polansky: Okay, great. On net2phone, could you talk a little bit about the profitability and the performance there? I mean, I think I mentioned last quarter, you beat our estimate on EBITDA and you did it again this quarter. So I am just trying to think about where this business could be from a profitability perspective than maybe 12 to 24 months?
Marcelo Fischer: Yes. I guess I will start with that. We had a very good net2phone quarter period. We are very pleased about how that one did. Yes, they did about $800,000 in EBITDA. And based on the performance, I would even venture to say that we might be exiting this fiscal year now June, July with not only being EBITDA positive, but even being by then cash flow positive meaning it covers its CapEx expenditures in buying that , etcetera. So we might be exiting already net2phone being a free cash flow generating company. I would want €“ and as you saw, we grew 30% subscription this past quarter. I would caution that as we go into Q3 that will be the first quarter where our CCAP acquisition will be now in the numbers year-over-year.
So, it will be purely €“ it still will be purely organic growth versus as opposed to having some of the acquisition effects. So we are still hoping to grow Q3 at 20%, 25% rate going forward. So we see net2phone continues to grow 20% on a go-forward basis and starting to generate positive cash if anything to my business is driving in Q2, because Q2 have the summer months so €“ more quiet winter holidays. And now in terms of business sales and €“ it’s the summer in South America, which is a big portion of our business. So we may even do that in Q3 than Q2. And I think one of the big good KPI we saw is that Q2 is that our churn will go. I mean, for the first time, we were able to get consolidated churn below 1%. I hope that remains to be the case.
But I get is an indication that we are doing things right, I think that our customers like our service. So all in all, I’m quite pleased with to and what the management team is doing over there.
Samuel Jonas: Yes. I don’t have much to add to what Marcelo already said. I mean the one thing I would say is that while the acquisition of Integra was probably a little bit of a weight on next quarter. We’re very, very excited about what that acquisition brings to the table. And we are going to be investing heavily in bringing on more customers for our CCaaS solution because we think a: when you provide a business with both there sales, customer service and regular business lines, you make them a much stickier customer. And frankly, we think it’s really a great solution at a great price, and it also raises our ARPU overall. So I mean I think one of the things you’ll see from net2phone over the course of the next couple of quarters is continued expansion of average revenue per user and margins from Integra, taking a deeper relationship into a lot of the customers that we already have.
I mean, some of what we’re doing now is not just going after new accounts, but landing and expanding the accounts that we have into taking more services from us.
David Polansky: That’s great. I want to give you an opportunity to talk a little bit about maybe anything new that’s going on in the pipeline. I mean, I think IDT has been very entrepreneurial in the past, and there is this question hanging out there of what happens when NRS gets spun out, what’s going to happen to IDT, the holding company and should I even be interested in IDP in the holding company as a potential investment. So I guess if you could talk a little bit about if you’re ready, what maybe what’s going on behind the scenes and anything that we could maybe look forward to in the future?
Samuel Jonas: Yes, I mean I will just give you like two or three things like that are that come to my mind quickly today. I mean one is you saw our launch of Zendit. I think that hit the press release a couple of weeks ago. And I was at our booth in Barcelona, where we were showing it off. And that’s a very exciting product for the top of the gift card space. It allows developers to come in and basically set themselves up and start selling. And we think that when you consider like the depth of our portfolio already, the advantages that we have in pricing from the volume that we do already in retail and in Zendit. We think that, that leverage is really going to bring a lot of customers to us from both other players that are out there already as well as new customers who see this as a way to add services into things that they are already selling to customers.
So that’s one example. We started marketing our BOSS Money product overseas this past quarter. And we’re very excited about how that is going to eventually develop to make money transfer, not just like a one-sided product but a two-sided product, both in local markets as well as here. And we think that that’s €“ I mean, there is a lot of different pieces to that, that we probably won’t get into on the call today, but that’s another one that’s very exciting. And again, we just keep adding on different pieces to all of our businesses and trying to sell them to consumers and businesses that our goal every day.
David Polansky: That’s great. And just as a clarifying point on Zendit, where €“ what product group is that going to be an IDT digital payment.
Samuel Jonas: Yes, that’s part of IDT digital payments, that’s correct.
David Polansky: Okay. And what does that do €“ when we think about the decay or the decline within traditional, I mean, can you €“ I just help understand what that could mean or is it kind of too early to tell?
Samuel Jonas: I don’t have an answer of what it could be. I mean I could say that part of our business is a very large part of the traditional business, and we expect to make it an even larger part of the traditional business going forward. And Zendit is a big piece of that strategy.
David Polansky: Okay. Great. That’s it for me. Thanks, guys. I will pass it over.
