Hello, and welcome to the IDT Corporation's First Quarter Fiscal 2014 Earnings Conference Call. [Operator Instructions] In today's presentation, IDT's Chief Operating Officer, Shmuel Jonas, will discuss IDT's financial and operational results for the 3-month period ended October 31, 2013. 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 the Q&A, IDT's management may make reference to the non-GAAP measures adjusted EBITDA, non-GAAP net income and non-GAAP EPS. A schedule provided in the earnings release reconciles adjusted EBITDA, non-GAAP net income and non-GAAP EPS 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, www.idt.net. The earnings release has also been filed on a Form 8-K with the SEC. Finally, please note that this event is being recorded. I would now like to turn the conference over to IDT's Chief Operating Officer, Shmuel Jonas

Thank you very much. I am joined here in Newark by Marcelo Fischer, the Chief Financial Officer of IDT Telecom. At the conclusion of my remarks, Marcel and I will be happy to take any questions that you may have. As I did last quarter, I want to focus on a few developments that help to explain changes in our business and opportunities which will impact us going forward. The results themselves are available in the earnings release posted on our website. And again, as a reminder, we will take your questions after these remarks, and we look forward to seeing you on December 16. Overall, IDT delivered solid results this quarter. We increased revenue compared to the year-ago quarter for the 15th consecutive quarter, with Telecom, Zedge and Fabrix all contributing. We strengthened our gross margins, allowing us to deliver over $70 million in gross profit in a single quarter for the first time in years. Adjusted EBITDA increased year-over-year and sequentially to $10.3 million; again, a multiyear high. All in all, it was another good quarter. Turning now to the dominant TPS segment within IDT Telecom. The strong year-over-year growth in our Retail Communications vertical continued to be driven by Boss Revolution's PIN-less international long distance calling service. Boss PIN-less growth more than compensated for declining revenue from traditional disposable prepaid calling cards, as well as from declining retail sales overseas, notably in Europe. Sequentially, retail revenue decreased from $176 million in the previous quarter to $172 million this quarter, as the revenue increase generated by Boss Revolution's PIN-less prepaid voice services was less than the decline in traditional disposable prepaid calling cards. Looking ahead, we expect to continue to deliver double-digit year-over-year growth in Boss Revolution's voice revenues, but at a more moderate rate compared to the…

As we begin the question-and-answer session, please note that Jonathan Reich, Chief Operating Officer of Zedge, has also joined IDT's management to take your questions. [Operator Instructions] The first question comes from Jay Srivatsa at Chardan Capital Markets.

First question. Boss Revolution, in terms of overall Retail Communication revenues, can you tell us what percentage it is now?

No. We don't break it out, and we're not planning to in the near term.

Okay. Well, maybe you can clarify in terms of increased penetration. You talked about how, going forward, growth may not be as strong as it was. In terms of revenues, can you share with us what level of growth you're seeing on a quarterly basis and what you expect to see going forward on Boss Revolution revenues?

I mean, again, as I said, on a quarterly basis, I'm not 100% sure. Definitely, on a year-over-year basis, we continue to see double-digit growth. It continues to grow quarter-over-quarter, but it has moderated, especially because of the fact that we're really focusing a lot on introducing more products and more services into the retailers and distributors that we currently have. And as we've said in the past, we don't want to be a one-trick pony in terms of just being a PIN-less service. We want to be the go-to portal for Payment Services, as well as PIN-less.

Okay. You mentioned introducing Boss Revolution in Canada. What are some of the other countries that are in your radar that are potential future opportunities for you for Boss Revolution?

Most notably, Asia. However, we're considering adding it for Argentina and possibly a couple of other locations.

Okay. Switching to Payment Services. Can you give us an update on where you are with the payment transfer offerings? And when do you hope to start to see -- to roll it out in a nationwide basis?

Well, we're up to -- we're at -- over 40 states have licensed us to do money transmission. We will be starting to do it, I would say, throughout the state of New Jersey within the next 3 to 4 months. And we're expanding it to 6 other states over the course of the next 6 months.

Okay. Zedge, you talked about looking at alternatives and potential spin-off opportunities. But in the meantime, looks like revenues from Zedge has -- seems to have dropped off on a quarterly basis. Can you give us some reason -- the reasons for why the drop-off is and what you expected going forward?

Yes, I mean, as I just read, like, from my speech, I mean, basically, advertising is a little slow in August, September and October to begin with. We also rely a lot on new games, and there was fewer releases of new games from the publishers that we deal with during the quarter. If you have -- if you want a more elaborate answer, I can let Jonathan answer as well. He's on the line.

Okay, Jonathan?

I think that Shmuel actually pretty much summed it up correctly. End of summer, beginning of September, lighter demand for advertising. And with our focus on game discovery, the game publishers are -- save their goods, their wares, for the end of the calendar year, holiday season and the like when customers are buying new cell phones and are going into the marketplace looking for compelling, interesting and fun games to play.

Okay. Following on that, it looks like the number of installs of Zedge has gone up quite a bit. Just realistically, your expectation going into next year on where you can be in terms of number of installs as you look at spinning off Zedge into a separate company?

Well, I mean, again, we haven't termed exactly what we're doing with Zedge and we have multiple options on the table. However, we believe that we will definitely be over $100 million in early calendar 2014.

[Operator Instructions] We have a question from Aaron Wilhelm [ph] at LG Capital.

A couple of questions on Fabrix and Zedge. Just on Fabrix, quickly, it looks like we're seeing increased R&D spend at Fabrix the past couple of quarters. Can you talk a bit about what's driving that?

Again, I mean, building stuff for customers that you don't have yet is expensive, especially when you can't offset it with revenues from them. So we continue to expect them to increase the amount of engineers that they're hiring, et cetera, et cetera, over the next 6 months, quite a bit. So it actually might increase before -- it won't decrease, but before revenue increases, it might continue to -- the loss might continue to increase, depending on how quickly they are able to bring on more engineers and as they expand into other verticals besides remote storage DVR.

Got it. Okay. And your press -- and maybe this is a question more for Jonathan, but your press release today talks about some significant product upgrades in the second quarter for Zedge. Can you talk a bit about what they are and what kind of impact you think they might have?

Sure. So today, as Shmuel said, we released our fourth-generation version of our Android app. It has an entirely new user interface, which has been geared towards making content much more easily accessible to users, as well as with the goal of increasing user engagements. And then, on the revenue side of things, we've introduced a set of new advertising units that will help us in terms of propelling the growth of the company. And then we expect that, before the end of this quarter as well, hopefully before the end of the calendar year, that we will be releasing our 2.0 generation of our iOS app, which will include integration of ringtones on top of simply wallpapers. Wallpapers have been the primary focus of the iOS app since we released it back in December of 2012. And then going into 2014, we will turn on the monetization spigot for iOS. iOS, today, we don't monetize on. Our belief is that we wanted to reach a critical mass of users before we actually turn on that monetization spigot accordingly. So that's all on the front end. And then in terms of the back end, we continue to invest heavily in our recommendation technology, which ultimately provides relevant content recommendations, whether it be games, ringtones, wallpapers, to our user -- to our users on a more personalized basis. And that is something which is very important to the user experience, helps maintain that customer interest because they're getting stuff that they're really interested in. And from a revenue perspective, that's important because our advertisers are able to reap the benefits of having their messages targeted to users that are likely to act upon that advertising message.

Got it. Okay. And I guess, Jonathan or Shmuel -- Shmuel, you mentioned, a moment ago, Sungy as a transaction in this space. And, I guess, you even mentioned some advantages that Zedge has over Sungy, namely that their customer base is more easily monetized. Are you viewing Sungy as a proxy for Zedge value? And talk a bit about...

I wish.

You wish?

I mean, I don't think that we have a -- I mean, I don't think that Zedge has a $470 million valuation today. But, I mean, I'm hoping that we can build it to be somewhere near as big.

Our next question is from Adam Cyrus [ph] at Tavistock Group.

I just have one question. I noted the year-on-year decline in quarterly cash flow and was curious if you could give any color as to what drove, approximately, the $5 million decline there?

Sure. Sure. Yes, as you can see, our cash flow from operations was about $15 million this quarter, compared to about $20 million the same quarter 1 year ago. And the main reason is because, if you may recall, in the quarter a year ago, that's when we got that big proceeds from the statement of work we did with Fabrix. So we got, in that quarter, close to $10 million during Q1. But -- just good timing of cash and the recognition of deferred revenue at the time that caused this. If you take that out, our cash this quarter is actually higher than a year ago.

At this time, there are no further questions. So this concludes our question-and-answer session and the conference call. Thank you for attending today's presentation. You may now disconnect.