Thank you, guys, for attending the Southwest IDEAS Conference hosted by Three Part Advisors. Up next, we have IDT Corp, traded under the New York Stock Exchange under the symbol IDT. On behalf of the company, I have Marcelo Fischer, CFO, and Bill Ulrey, Investor Relations. Take it over.
Yeah, good morning. Thank you very much to everyone for being here with us today. A special thank you to the Three Part Advisors team for doing a great job in today's conference. I am Marcelo Fischer. I serve as IDT's CFO, and I'm joined today with Bill Ulrey, IDT's Head of Investor Relations. Hey, Bill, you want to get started?
Thanks, Marcelo. Before we get into the presentation, I just want to note that we'll be discussing our financial results for the fourth quarter and full year, fiscal 2024, which ended on July 31st. So we'll be announcing our first quarter fiscal 2025 results early next month. And you can read our forward-looking disclosure statement when you need some time to go to sleep. Okay. So IDT is an exceptional company with a bright future, but it's also a complex story, and it takes some digging to get your arms around it.
We operate six businesses, and on the left-hand side of the screen, you'll see our high-growth, high-margin businesses, National Retail Solutions, which is a POS platform provider, BOSS Money, which sits within our fintech business, which also has other fintech businesses in it, but it's primarily a money remittance business, and then net2phone, our cloud communications business. Our presentation today is going to focus on those three businesses, but most of our EBITDA and most of our revenue is generated by the businesses on our right-hand side of the screen, which reside in our traditional communication segment. IDT Digital, which sells primarily mobile top-up, BOSS Revolution, which is an international calling service primarily marketed to immigrants and first and second-generation immigrants, and IDT Global, our wholesale voice and SMS service provider.
Before we go any further, let me give you a quick overview of the company. We're a communications and fintech service provider. We're founded by our chairman, Howard Jonas, and we've been in business for almost 35 years. We're truly a global enterprise with over 1,815 employees on six continents, and we have a long history of starting up businesses, incubating them, and then spinning them off or selling them to unlock value for our shareholders. We've done five public company spinoffs to date. We generate over $1.2 billion in revenue. We're profitable. We generate about $90 million in EBITDA during fiscal 2024, and we have a very strong balance sheet with nearly $200 million in cash and current assets and near cash and no debt.
So now we'll walk you through each of the three high-growth, high-margin businesses, starting with National Retail Solutions, which is often considered kind of the crown jewel in the IDT kingdom. So NRS, which is the name it goes by, operates the largest point-of-sale platform for independent retailers in the country. So back in IDT's history, we developed relationships with many independent retailers who were purchasing our calling service products. And we would go to these stores. We have a nationwide sales force, and we saw that they were losing market share to the large retail chains, which had the advantages of technology and scale.
And so we, about eight years ago, began to offer our own POS that would help these retailers, help level the playing field for these small independent retailers with the large chains by bringing them the technology that they needed to operate more efficiently and profitably. So that's really the genesis of NRS. And today it's growing rapidly. It's throwing off significant cash. Marcelo is going to go over with you, but we're still in the early stages of the business, and we're really excited about the potential. We've come a long way, but I urge you to focus on NRS because it's a great story. There's not a lot of good data available on the small independent retail market, but roughly when you think of the market as c- stores, bodegas, liquor and tobacco stores primarily in urban areas, there's about roughly 200,000 of these retailers.
So at July 31st, we were in 32,100. We had 32,100 terminals. Some stores have multiple terminals, so we're in about 27,800 stores. So if you think about where we are in terms of our addressable market, we have 86% of the market still available to us beyond our current customer base. And we're adding about between 1,300 and 1,700 new stores net of churn per quarter. So it's growing nicely. So in fiscal 2024, we increased our total terminal count by about 25%. We're able to achieve this growth because we really have the first mover advantage in this market. It is difficult to penetrate. It's not because most owners only have one or two stores. You've got to really. It's hand-to-hand combat to sell these things. It takes developing relationships. And most of these retailers are typically operating out of a shoebox.
We're not taking a solution they already have, a good solution. This is typically their first POS. And so the advantages are very clear-cut. And there's a very strong moat around this market. So that's helping drive the extraordinary growth that we've experienced today. So just to give you a sense of kind of where we are in terms of scale, if you look at the NRS network, as I mentioned, we have about 27,000 retail stores. So if you look at the largest retail chains in the country, you'll see Dollar General and Subway there with each about 20,000 retail stores. So our platform, in terms of its reach, is already significantly about 30% bigger than the largest retail chains. And when you think about the construction of our POS, the POS itself is a desktop POS.
It sits on the retailer's desk, and it has a screen facing the customer and a screen facing the retailer. So they're ringing up the transactions there, and that is an ideal. It was purpose-built and designed for these urban retail markets where theft and being knocked around was a primary concern. So it's a very sturdy unit, but as we expand, we're looking to expand into new markets and attract new retailers and deepen our penetration, and this year, we'll be rolling out two new forms of the POS that will help us deepen the penetration of the market and find new retailers, so one of them is a kiosk. Many of our retailers have food typically, it's the ethnic food of the market they cater to, so they'll have food stuffs there, and the kiosk enables you to go up and self-order at the kiosk, pay at the kiosk.
And so that helps the retailer significantly. We're also developing a tablet POS, which runs on Android. And it's perfect for the retailer who wants a more stylish solution or who doesn't have the space to accommodate a larger POS. So both these are kind of our new formats, again, that will expand the TAM and deepen the market penetration. So that's kind of where we are operationally. Now, Marcelo is going to walk you through the financials for NRS. Thank you.
NRS's recurring revenues exclude the one-time sales of the POS hardware. The recurring revenues are generated primarily by three distinct offerings. First, payment processing, which is offered under the NRS Pay brand, is what enables retailers to accept credit and debit cards and also electronic payment benefits like EBTs. Second, our advertising and data revenue includes sales of both still and video advertisements, which are displayed to consumers on the customer-facing POS on the digital screens. Our ad inventory is sold to CPG marketers and also other commercial clients, government agencies, and political organizations. Within data is where we have our NRS Insights division and where we sell our data and analytics business, which is part of that vertical. Lastly, we also generate revenues from our SaaS fees, which are sales of the POS software. NRS is a service platform.
And so we are working to develop new offerings all the time to enhance our value to retailers and to marketers down the road. NRS recurring revenues have no significant cost of goods sold. And therefore, they are generating gross profit margins, which approach 100% on $100 million of revenue. So the NRS top line has been growing fast with an 84% compounded annual growth rate over the past four years and a 42% year-over-year increase in our last quarter or fourth quarter. NRS's network expansion has been the primary driver of the increases, but we also work to increase the monthly average recurring revenue per terminal, so both output and volume growth. Recurring revenue per terminal in the fourth quarter increased to $285 per month, up from $253 in the year-ago quarter, a 13% increase. Now, let's look in greater detail at all these three unique revenue streams.
Let's start with merchant services. So over 90% of the revenues in merchant services is contributed by NRS Pay, which is, again, our payment processing solution. Our pitch to retailers is very simple: low rates, no hidden fees, no early termination fees, and we also give the card reader for free. Over 21,000 stores out of the total 28,000 that Bill mentioned earlier now use NRS Pay. And we are increasing our penetration into these stores primarily as the stores roll over from their existing and usually the more expensive contracts that they have with other processors. Over the past few years, we've developed several new premium NRS Pay pricing plans that help us drive output growth while helping our retailers to operate more profitably. For Q4, the number of NRS Pay accounts increased by 35% year-over-year.
In addition, merchant services revenue per terminal increased 15% as we migrated more and more of the customers to the premium plans. So together, these factors drove a 57% year-over-year increase in merchant services revenue. Now, let's talk about our next revenue stream, which is advertising and data. So NRS Digital Media sells NRS's vast ad inventory both through its direct sales efforts and also through programmatic platforms that create marketplaces for digital ad inventory buyers and sellers. NRS's unique reach with urban multicultural audiences has helped to drive annual revenue increases ever since we entered this business in 2018. As I mentioned earlier, this vertical also includes revenue from our data and analytical businesses, NRS Insights. So NRS Insights processes, analyzes, and sells SKU-level transaction data from our terminal to consumer marketers and data analytics companies like Nielsen and IRI.
To give you a sense of our scale, the NRS platform processes 1.4 billion transactions over the past 12 months. The four-year annual compounded growth rate for advertising and data revenue is well over 60%. And then finally, speaking about the last recurring revenue category, SaaS fees, NRS retailers, they pay us a monthly recurring charge for the software services that each active POS terminal utilizes. The MRC ranges between $20 per month for our basic plan when the stores also take NRS Pay, all the way up to $70 per month for our premium plan for stores that don't take NRS Pay. No matter the plan, the MRCs are more affordable than the fees that other POS providers charge now to serve the large retail chains.
We have successfully increased the average MRC by introducing and migrating more retailers into our premium SaaS plans. The increase in the average MRC and the growth of our POS network together, they contributed to an increase in SaaS fees revenue by 39% in full year fiscal 2024 compared to full year fiscal 2023. So we expect that these drivers will continue to provide strong SaaS revenue growth in the coming years. So the NRS economics are extremely attractive. The only significant costs at NRS are for the terminal hardware themselves, which we often discount to incentivize the retailers to sign up for the service, with the greatest discount obviously being given to those who take NRS Pay as well. Moreover, approximately half of NRS's SG&A is fixed or semi-fixed. So the economics of the business will continue to improve as we grow.
In fiscal 2024, NRS generated $25 million in adjusted EBITDA for an EBITDA margin of 24%. We expect that both the NRS's top and bottom lines will increase nicely for the foreseeable future, driven by merchant services and SaaS fees revenues, with potential upside from the advertising and data revenue flows. Now, we often think about the performance of NRS in terms of the Rule of 40, which targets the sum of the revenue growth rate and the free cash flow margin to meet or exceed 40%. So in the case of NRS, fiscal year 2024 recurring revenue growth was 36%. And our measure of free cash flow, which is adjusted EBITDA less CapEx, was a percentage of total revenue 20%. So 36% plus 20%, our 56% Rule of 40 score suggests that we are doing a pretty good job balancing both growth and profitability for this business.
To wrap up, NRS is a fantastic business, both operationally and financially, with an extended runway ahead. So Bill now will introduce you to another fantastic business, which is BOSS Money.
Thanks, Marcelo. As we mentioned, BOSS Money is our international money remittance service. It generates approximately 90% of the revenue within our fintech segment where we report its results, and the fintech segment also includes other early-stage financial businesses. We launched BOSS Money about a decade ago, again, to leverage some of those strategic assets I mentioned earlier, the BOSS brand, which continues to have a powerful resonance with immigrant communities across the country, our customer base, and our distribution network among retailers. So when you think about this market for immigrants, sending money back home to friends and family is a primary economic activity for them, and about five million customers of BOSS in the BOSS ecosystem were already using another provider to send money back home, so from our perspective, it was a natural fit for us.
And we built the business from the ground up, beginning with going out and getting licenses in every state to provide the legal framework for the business. Today, BOSS Money customers in the U.S. can send money to friends and family in 50 countries around the world. Primarily, those are in Latin America and Africa. We go to market through two channels, retail and digital. Retail, so we think about it, if you go into a local store, that's the retail channel, and you hand over cash to be sent overseas. That typically has a lower margin than digital because the commissions paid to the retailer. But the vast majority of transactions on BOSS Money are digital transactions. And there, you can do that online, or we have two very popular apps, BOSS Money app and the BOSS Revolution calling app, the BOSS calling app.
Both of those are available through the App Store, and if you want to dig into IDT's story, I encourage you to download one or both of those apps, so when you think about kind of the competitive advantages for us in this business, the trusted brand of BOSS Revolution in immigrant communities is a nationwide brand, and we spend marketing, put marketing dollars behind that every year to continue to make it a potent and respected brand. We're also, the other significant advantage is that we cross-market BOSS Money, the money transfer service within the larger BOSS ecosystem, so if you buy a BOSS mobile top-up service or you're using BOSS Revolution calling to stay in touch with your family and friends back home, then as soon as you use either of those other services, we're cross-marketing to you.
It's a very efficient, cost-effective way to bring new customers into BOSS Money. Finally, we have a very strong balance sheet, as you saw. The money transfer business requires significant amounts of working capital. Our balance sheet enables us to very efficiently fund the growth of this business. Just to give you an example, heading into the holiday season, Marcelo and his team will pre-fund disbursements heading into a holiday weekend for up to $70 million, it could be as much as $75 million. That's all cash that we have. For many companies in this sphere, especially the smaller ones, being able to come up with the capital to finance that kind of transaction week in and week out can be quite expensive. That's another competitive advantage. Now, Marcelo is going to walk you through the financials for BOSS Money.
Thank you, Bill. So BOSS Money is growing robustly, right? Transaction volumes increased 41% for the fiscal year 2024 compared to 2023, and actually accelerated in the fourth quarter to increase 42%. Our strategy to drive further expansion includes expanding our origination network to new geographies. Most recently, now we launched in Canada. We continue to expand our retail origination network here in the U.S., expanding our payout network through new payers and channels around the globe, including direct-to-debit payouts, also cross-marketing within the larger BOSS offerings ecosystem, including BOSS Revolution calling and mobile top-up. And as Bill mentioned, continue to leverage our strong and liquid balance sheet to meet the heavy working capital requirements of the business.
And so driven by the strong expansion in transaction volumes, BOSS Money revenue increased also by 41% year-over-year in the fourth quarter to reach an annualized revenue run rate of just over $125 million. Both our digital and retail channels achieved comparable growth rates. As BOSS Money continues to scale, our unit cost structure continues to improve, in part because we are able to leverage our larger transaction volumes to cut better deals with payout partners around the globe. BOSS Money actually turned Adjusted EBITDA positive in fiscal 2024, delivering over $4 million in EBITDA. And we estimate now in fiscal 2025 that Adjusted EBITDA for BOSS Money will exceed $10 million. The fintech segment as a whole, which BOSS Money is part of, it includes other early-stage initiatives, which we are investing in. And this segment as a whole generated Adjusted EBITDA of $1 million in fiscal 2024.
The gross profit margins for the fintech segment was 55% in the fourth quarter. So thinking ahead, profitability over the long term, and assuming we continue to scale, many of the public players in the money transfer space generate 15% Adjusted EBITDA margins or more. Assuming a stable marketplace, we see no reason why we should not perform at least as well as we scale. So now let's turn to the last of our high-margin growth businesses, which is net2phone. So Bill, you want to do it?
Thank you, Marcelo. net2phone provides cloud-based communication services to business, and it features Unified Communications as a Service, UCaaS, and Contact Center as a Service, or CCaaS. Like NRS and BOSS Money, we built net2phone around several of IDT's core assets. In this case, we had global telephony infrastructure and VoIP expertise as a calling service provider, and particularly focused on Latin America. We were a pioneer in voice-over internet telephony. net2phone's UCaaS and CCaaS offerings significantly improved the productivity and efficiency of communications and workflows for business. When you think about the market for UCaaS and CCaaS, they're really huge. Basically, all business communications fall into these categories. All businesses of all sizes today are migrating their communications from legacy premise-based PBXs. You think about a closet with copper hardwires to each phone.
Those on-site switching systems are going away, and they're being replaced by hosted platform solutions like UCaaS and CCaaS, which utilize the internet and cloud data processing to enable omnichannel communications from untethered devices. So from your phone, from your laptop, you don't have to be wired in any longer. And more recently, we've begun to further leverage the advantage of the clouds with artificial intelligence capabilities. So because of the comprehensive superiority of cloud-based businesses, cloud communications such as ours, the addressable market for those services is virtually all corporate communications. So in fact, if your company doesn't already use a cloud-based provider, you probably will be in the near future. Glad the enthusiasm is here. So under the Unite brand name, our UCaaS offering, the prices range from start at $19.95 a month, and we offer kind of the standard package of services with a particular twist.
So for that $19.95, you get unlimited domestic and international calling to the U.S., Mexico, and 40 countries. You can send SMS and MMS messages, internal messaging, video conferencing, and all through a single pane of glass. And we also offer premium tiers, and we're constantly working to migrate our customers to the premium tiers. And that includes things like WhatsApp messaging and now AI-powered call transcription and summarization. On the uContact side, which is our CCaaS business, we provide those businesses for both inbound and outbound campaigns, and it starts at $59.95 a month, so a higher RPU per seat. Its features include automatic call distribution, auto dialers, interactive voice response, agent and supervisory roles, analytics, and reporting. And with premium tiers, you get WhatsApp and Facebook integration messaging, chatbots and web chats, and workforce management tools. So everything you need to run a call center operation.
Net2phone's services, as I mentioned, in terms of the key functionalities that are driving, has all the key functionalities that are driving the growth in the industry. But there's really three differentiators that have allowed us to sustain above-average growth rates and profitability and pivot to profitability more quickly than many of the larger players. While many of the larger players target the enterprise segment of this market, net2phone is very much focused on the mid-enterprise, the small enterprise market. We don't go after the biggest global customers. Secondly, we have a unique geographic footprint. As I mentioned, we're about 50% of our business is currently in Mexico and South America and the rest of North America. South America is a relatively underserved market.
Again, we were able to leverage IDT's pre-existing infrastructure there to become a first mover in those markets and develop very localized offerings, which was relatively unique. And third, we sell predominantly through channel partners. So think about these as some of the most respected technology distributors across our markets. And you can see some of the marquee names on the slide. So these three differentiators have enabled us to achieve higher margins and growth rates than many players in the industry. Now, Marcelo will walk you through the economics of net2phone.
Thank you. So as of July 31st, which was the last day of our fiscal year 2024, net2phone served 396,000 UCaaS plus CCaaS seats, which were about equally divided between North and South America. Seats served increased 13% year-over-year in the fourth quarter, driving a 15% increase in subscription revenue. So you will notice that revenue growth outpaced the rate of seat growth or volume growth. And that's primarily because of the growing contribution of our uContact CCaaS offering, which generates significantly higher RPUs than the UCaaS customers. net2phone's fourth quarter fiscal 2024 Adjusted EBITDA jumped to $2.5 million from $900,000 a year earlier, while the Adjusted EBITDA margin more than doubled in the fourth quarter, increasing to 11%.
net2phone is on track to become a powerful cash generator in the coming years, even after taking into consideration the fact that we invest roughly $20 million per year each year on acquiring customers to continue to grow and fill the business. We generate very attractive IRRs on our customer acquisitions, basically in every one of the markets that we operate in. net2phone's improving bottom-line performance and adjusted EBITDA margin expansion are driven by the growth of the higher RPU CCaaS offering, favorable operating leverage, our efforts to reduce churn, and our progress in reducing per-seat customer acquisition cost. We expect to accelerate the margin expansion in the coming year by migrating customers to premium plans and offerings with AI-powered features included in them.
So to wrap up on net2phone, it is a highly differentiated approach that has enabled it to continue growing at higher rates than most in the industry. And as it continues to scale, net2phone is positioned to become a prolific cash generator. Now, let's take a look at our traditional communication segment. Back to you, Bill.
Just to step back for a second, you've heard about our three high-margin, high-growth businesses. Again, this is our traditional communication segment, which is the largest in terms of revenue in the company. You have IDT Digital Payments, BOSS Revolution calling, and IDT Global carrier services businesses. There are also within that segment, again, smaller offerings as well. But in aggregate, these businesses produce about 75% of our consolidated revenue in fiscal 2024 and contributed $66 million in Adjusted EBITDA. Nice cash flows. IDT Digital Payments is predominantly sales of mobile top-up. This is a service that enables customers here in the U.S. to purchase bundles of airtime, messaging, and data and then transfer those to a friend or family member overseas. In addition, you can also do that service domestically. There's domestic mobile top-up as well.
We're working hard to expand the potential of IDT Digital both by expanding mobile top-up sales and building out a related prepaid global platform, among other initiatives. BOSS Revolution and IDT Global services onto the right, those two businesses to the right, are legacy businesses. They're both in the prepaid minute platform industry, prepaid minute industry. BOSS Revolution, again, is an international long-distance calling business used primarily by immigrants. IDT Global provides termination services for wholesale telecom providers around the world. Although revenues from both of these businesses are declining at double-digit rates, we've worked hard and relatively successfully to mitigate their impact on the cash generation in terms of Adjusted EBITDA. Now, Marcelo is going to walk you through the consolidated results for IDT.
Okay, so we gave a lot of information about each one of the segments, so real quick, to give you a consolidated view, IDT's top line has been decreasing because of the gradual contraction in the core businesses, but beginning now in fiscal 2024, especially in the second half of fiscal 2024, we are starting to see consolidated revenue starting to grow again. We are budgeting that for fiscal 2025, we will see revenues growing by about $40 million in comparison to fiscal 2024, so IDT, once again, is becoming a growth company. Similar story when we talk about gross profit. Although the inflection point for gross profit had arrived already much earlier, in fact, we are steadily increasing GP over the past five fiscal years. We generated a record $395 million in consolidated gross profit in fiscal 2024 at a 33% gross margin.
And collectively, the growth businesses are generating 73% of gross profits compared to 18% of gross margins for the traditional legacy businesses. I'm just talking a little faster because I think we are running out of time. So finally, IDT generated a record $90 million in adjusted EBITDA consolidated during fiscal 2024. And we expect to generate $100 million or more in fiscal 2025 as our high-margin growth businesses continue to gain scale. On July 31st, we had $192 million in cash, no debt. And we repurchased about $9 million of our common stock and launched this past year a regular quarterly dividend. So looking ahead at the big picture, IDT again is growing, top line generating increasing levels of cash. Growth businesses are doing very strong. We have a strong balance sheet that we could redeploy for investment. We're extremely excited about our future.
We hope that this presentation has piqued your interest. Thank you.
Any questions?
Okay.
Thank you.