• Company achieves record quarterly revenues
• Balance Sheet boasts nearly $1.1 billion in cash and marketable securities, representing more than $32.00 per share,
• Financial Spreadsheet for Q2 (PDF).

NEWARK, N.J. - March 19, 2001 - IDT Corporation (NYSE: IDT) today reported revenues of $287.6 million for the second quarter of its Fiscal Year 2001, the three months ended January 31, 2001, up 4.0% from the first quarter of 2001, and 4.4% higher than the revenues recorded during the second quarter of Fiscal 2000.

The net loss for the quarter was $117.1 million, or $3.54 per share. The net loss includes a total of approximately $93.6 million, or $2.83 per share in after-tax losses recorded in relation to the sale of Terra Networks shares during the quarter, and IDT's pro-rata interest in the net loss recorded by Net2Phone (NASDAQ: NTOP), IDT's former subsidiary.

Excluding these non-operating items, the Company recorded a net loss of $23.5 million, or $0.71 per diluted share. This compares with a net loss, excluding non-operating items, of $22.3 million, or $0.58 per share, in the first quarter of Fiscal 2001, and a net loss, excluding non-operating and extraordinary items, of $718,168, or $0.02 per share, in last year's second quarter.

"This quarter was about IDT seeing the light at the end of the telecom tunnel," said Howard Jonas, Chairman and CEO of IDT Corporation. "Several things we had anticipated for some time have come to pass, including the revenue and market share gains we have made in our calling card division, which led us to yet another quarter of record revenues."

"With a balance sheet that has become the envy of all of our peers, we are well-armed to conquer the challenges facing the telecom industry today. We continue to focus on returning IDT to profitability, building a solid platform upon which we can base our future growth."

RESULTS OF OPERATIONS

The Company's loss from operations narrowed to $48.5 million in the second quarter of Fiscal 2001, from a loss of $60.1 million in the first quarter of Fiscal 2000. Excluding the effects of non-recurring management incentive compensation which was recorded in the first quarter, the operating loss in the second quarter was essentially unchanged from the first quarter. Looking ahead, we anticipate that the operating loss will be reduced further in the second half of Fiscal 2001, reflecting continued strong growth in retail telecommunications revenues, small margin improvements, and continued company-wide cost cutting.

Toward the end of the quarter, the Company launched its IDT Best Practices program, designed to improve IDT's efficiency and profitability across all business lines. The program will involve formal goal-setting and benchmarking procedures, and will feature frequent management reviews of IDT's various divisions.

Telecommunications

IDT's core telecommunications business reported record quarterly revenues of $280.9 million for the second quarter of Fiscal 2001, 4.9% higher than last quarter and an increase of 4.6% over the telecom revenues recorded in the second quarter of Fiscal 2000. Gross margins for the Company's core telecommunications business amounted to 12.1%, a slight improvement from the first quarter of 2001.

The growth in telecommunications revenues was driven by strong increases in debit card sales and domestic long distance revenues. For the quarter, retail revenues accounted for approximately 63% of overall telecom revenues, compared to 59% in the first quarter of Fiscal 2001and 51% in the second quarter of Fiscal 2000.

The solid growth of these higher-margin retail services, coupled with declines in wholesale carrier revenues, has resulted in a more favorable revenue mix for IDT, from a gross margin standpoint. This has allowed the Company to recover sharply from the gross margins experienced during the fourth quarter of Fiscal 2000. Going forward, we anticipate that overall telecom gross margins will, at a minimum, maintain their current levels, with some improvement forecast for the second half of Fiscal 2001.

EBITDA (Earnings Before Interest, Taxes and Depreciation, and excluding minority interest) in the second quarter for the telecommunications business amounted to a loss of $16.3 million, versus a loss of $22.5 million in the first quarter of 2001 and EBITDA of $16.8 million in the same quarter last year.

The improved EBITDA performance was due to the increase in revenues mentioned above, as well as the continued success of the Company's cost-cutting efforts, which were initiated during the first quarter. Selling, general and administrative (SG&A) expenses in IDT's core telecommunications division declined 8.0% sequentially from the first quarter, and were down 12.2% from the levels recorded in the fourth quarter of 2000. Compared to the second quarter of Fiscal 2000, EBITDA performance was hampered by significant pricing pressure in both the wholesale and retail markets. In addition, SG&A expenses rose sharply year-to-year, as the Company incurred expenses related to its European telecom business and its rapidly expanding domestic long distance business. In addition, the Company added significantly to its staff in the both the U.S. and internationally.

WHOLESALE

IDT's wholesale carrier business reported revenues of $103.3 million, down 6.7% from the first quarter, and a 22% decrease from the second quarter of Fiscal 2000. Wholesale carrier margins were unchanged from the first quarter, as they have stabilized at levels above those experienced toward the end of Fiscal 2000. Within the wholesale carrier markets in which the Company was active, intense pricing pressures continued, although price stabilization was witnessed in some regions.

The decrease in wholesale carrier revenues reflects an ongoing shift in the Company's wholesale customer base. Since the early stages of Fiscal 2000, the Company has been repositioning its domestic wholesale carrier business, as its wholesale customer base has undergone a transition, within the rapidly changing industry environment. The Company has restructured its carrier group, focusing on serving a smaller group of larger, more financially stable customers. As a result, the Company's minutes of use, and revenues, have fluctuated in recent months. We anticipate that wholesale revenues will continue to decline over the second half of Fiscal 2001, bottoming out in the fourth quarter. However, over that time, we anticipate moderate gross margin improvement, as the Company generally sacrifices lower margin, higher risk revenues for a more profitable and reliable revenue mix.

RETAIL

IDT's retail division enjoyed robust growth in the second quarter of Fiscal 2001, posting $177.6 in revenues, up 13% from the previous quarter, and 31% higher than the same quarter last year.

Prepaid calling card revenues amounted to $162.9 million for the second quarter, up 11% from the previous quarter, and 28% higher than the second quarter of Fiscal 2000.

Looking to the remainder of Fiscal 2001, the Company expects to continue to gain market share, at the expense of competitors who have left the industry, or are significantly scaling back their operations. In addition, in the third quarter of Fiscal 2001, the Company will begin to record revenues associated with the calling card operations of PT-1, which the Company acquired in early February. Consequently, we anticipate that prepaid calling card revenues will continue to grow strongly over the remainder of Fiscal 2001.

Domestic Long Distance

Domestic long distance revenues for the quarter were up 52% from the first quarter, and were nearly five times the revenues recorded in the same quarter a year ago, as the Company's flat rate, $0.05 per minute long distance plan continues to attract new customers, with over 250,000 long distance customers now signed up. Gross margins for the domestic long distance business continued to improve strongly, as the company recognizes the benefits of increased scale in this business.

As we have grown the domestic long distance business, we have incurred significant sales and marketing expenses, spending on print and television advertising to promote the "Direct Dial" long distance product. However, our focus on controlling costs and increasing the effectiveness of our marketing expenditures has resulted in solid customer acquisition performance, as our customer acquisition costs remain well below the industry average.

Over the remainder of Fiscal 2001, we anticipate continued growth in the domestic long distance business, and expect that it will account for an increasing proportion of overall telecom revenues. As our domestic long distance business continues to move towards critical mass, we will be adding a higher margin, recurring customer base to our existing business. Combined with wholesale carrier and prepaid calling cards, the domestic long distance business will be the third leg upon which we will build our telecommunications business.

IDT EUROPE

For the second quarter, IDT Europe, the Company's European telecommunications division, reported a net operating loss of approximately $10.0 million, compared to an operating loss of approximately $15.0 million in the first quarter of Fiscal 2001. Results continue to be hampered by significant pricing pressure in both the wholesale and retail markets.

During the first quarter, IDT launched a major cost-cutting program in Europe, designed to improve the division's profitability, while properly positioning IDT Europe for further growth. Over the first half of Fiscal 2001, IDT Europe's revenues declined from the levels recorded during the second half of Fiscal 2000, as we eliminated unprofitable business lines and began to reposition our targeted customer base. In addition, we are currently consolidating our European operations, to focus on fewer, more promising geographic telecommunications markets.

Looking to the second half of Fiscal 2001 and beyond, we believe that IDT Europe will continue to work its way towards profitability, as recently implemented strategic management initiatives take further hold. Over the longer term, we expect that IDT Europe will become an engine for growth at IDT Telecom, as we focus our efforts on expansion in promising telecom markets, and the overall European telecommunications market slowly emerges from its current depressed state.

INTERNET

IDT's Internet division recorded an operating loss for the quarter of $5.2 million, compared to losses of $2.6 million and $3.6 million in the first quarter of Fiscal 2001 and the second quarter of Fiscal 2000, respectively. Internet revenues were down 15% compared to those of the prior quarter, and were 2.4% lower than during the same quarter last year. In addition to the decline in revenues, the increased operating loss was due to higher operating expenses incurred in relation to the ongoing phase-out of the company??s dial-up Internet access business.

IDT VENTURES

The IDT Ventures division recorded an operating loss of $14.4 million in the second quarter, related primarily to ongoing start-up and development costs, compared to a $10.0 million operating loss in the first quarter, and an operating loss of 3.0 million in last year's second quarter. IDT Ventures recorded revenues of approximately $3.7 million in the first quarter, down from $5.2 million in the previous quarter. IDT Ventures did not record material revenues in the year-ago period.

Restructuring Update

During the quarter, the Company made further progress towards completing the corporate restructuring that was announced in October 2000. When the restructuring is completed, IDT Corporation will be a holding company, with two principal subsidiaries: IDT Telecom and IDT Ventures. The Company's restructuring team is currently in the process of obtaining regulatory and third-party approvals. Pending the receipt of these approvals, we anticipate that our corporate restructuring will be completed by the end of Fiscal 2001.

Accounting Treatment of Net2Phone Stake

Upon the completion of the sale of 14.9 million shares of our Net2Phone holdings to AT&T in August 2000, we held approximately 10.0 million shares of Net2Phone Class A Common Stock, representing approximately a 17% ownership interest and a 21% voting interest. Consequently, beginning in the first quarter of Fiscal 2001, we are no longer consolidating Net2Phone's results. Net2Phone's results are now reported as equity income/(loss) in our financial statements, whereas they were fully consolidated in periods prior to Fiscal 2001. However, for the purposes of proper comparison with periods prior to Fiscal 2001 in the discussion of division operations above, we have presented results for IDT excluding Net2Phone in all periods.

CONFERENCE CALL INFORMATION

In connection with this release of quarterly and annual results, the Company will be hosting a conference call today for analysts, investors and the general public, at 5:00 PM EST. During the course of the call, IDT management will discuss the results of the second quarter of Fiscal 2001, offer some guidance related to future results and discuss the Company's recently-initiated IDT Best Practices program in greater detail.

To access the call from the U.S., dial 1-800-446-2782. For international callers, the dial-in number is 1-847-413-3235. No passcode is required. A replay of the teleconference will be available for one week after the conference call at 1-888-843-8996 for domestic callers, or 1-630-652-3044 for international callers, passcode #3685453.

Alternatively, interested participants may access a webcast of the conference call by visiting the IDT Corp. website, at http://www.idt.net. A direct link to the call will be found on the website. Listening to the webcast of the call will require Real Audio software. Please allow at least 15 minutes to download the necessary audio software prior to the call. An archived copy of the call will be available at the IDT website on the Investor Relations tab.

Investors are encouraged to visit the recently redesigned and expanded Investor Relations section of the Company's web site, which contains company information, frequently asked questions, downloadable financial tables and other informative content. To visit the site, go to IDT's home page (http://www.idt.net) and click on the "Investor Relations" tab located along the top of the page.

IDT CORPORATION

IDT is a leading facilities-based, multinational carrier that combines its position as an international telecommunications operator with its experience as an Internet service provider to provide a broad range of telecommunications services to its wholesale and retail customers worldwide.

Through its own national telecommunications backbone and fiber optic network infrastructure, IDT provides its customers with integrated and competitively priced international and domestic long distance telephony, prepaid calling cards, Internet access and digital subscriber line (DSL) service. The Company's Ventures division is developing several innovative telecom and Internet related businesses. Through its IDT Investments subsidiary, IDT has equity interests in several telecom and Internet-related companies.

Investors:
Norman Rosenberg, CFA
VP, Finance & Capital Markets
(973) 438-4001

Mary Jennings
Manager, Investor Relations
(973) 438-3124