PRESS RELEASES

Revenues and Profits for First Quarter FY98

HACKENSACK, N.J.--(BUSINESS WIRE)--Nov. 18, 1997-- IDT Corporation (NASDAQ: IDTC - news), a leader in international telecommunications, today reported its third consecutive profitable quarter as a public company. For the first quarter ended October 31, 1997, the Company reported revenues of $54.8 million, a 94% increase over the same period year-ago revenues of $28.3 million. Net income for the quarter was $2.0 million or $0.08 per share as compared with the same quarter year-ago net loss of $3.1 million or ($0.15) per share. EBITDA for the first quarter was $4.1 million, or $0.16 per share as compared to the same quarter year-ago negative EBITDA of $2.3 million or ($0.11) per share.

A quarter to quarter comparison shows a 34% revenue increase to $54.8 million from $41.0 million in the prior quarter. Net income for the quarter of $2.0 million or $0.08 per share is a 100% sequential increase over the prior quarter's net income of $0.94 million or $0.04 per share. EBITDA in the first quarter increased 46% sequentially to $4.1 million or $0.16 per share as compared to $2.8 million or $0.12 per share in the prior quarter.

"We are extremely pleased with the results of this past quarter. We continue to demonstrate very strong sequential growth in our carrier and retail businesses, as well as in Net2Phone. We are very pleased with both top-line growth and bottom-line results, demonstrating our ability to rapidly expand our business, while improving our overall profitability", stated Howard Jonas, IDT Chairman and CEO.

TELECOMMUNICATIONS

IDT's telecommunications operations continued its rapid pace of growth. Telecom revenues for the quarter increased to $47.8 million, up 164% over same period year-ago revenues of $18.1 million and a 41% sequential increase over revenues of $33.8 million for the prior quarter. Telecom gross margins in this quarter were 20.8% as compared to 21.6% for the prior quarter, reflecting the continued strength in the carrier services business. Telecom minutes of use grew to approximately 111 million minutes for the quarter, a 29% increase over the prior quarter's 86 million minutes.

"We continue to execute on our strategic plan to reduce our terminating costs and improve margins by expanding our relationships and agreements with foreign PTTs and competitive carriers. We have formed very strong relationships particularly with the European and South American carriers who are facing deregulation in their markets starting in the next six weeks. As we deploy our transatlantic network and interconnect with the foreign carriers, we expect to realize further cost-savings and enhanced profitability, as well as continue to aggressively grow our top line,'' said IDT's President Jim Courter, who leads IDT's team to forge agreements within the international telecom community."

During the first quarter, IDT announced that it acquired Rock Enterprises, a privately-held company specializing in telecom engineering, for approximately $5 million in IDT stock, which is expected to cut operating costs. The Company believes that by bringing the technology in-house, the cost savings will be greater than the cost of the investment, and expects the net effect of the acquisition will be accretive to earnings by the end of this fiscal year. Prior to the acquisition, Rock had been providing IDT with switching capabilities, routing and platform tables, software research and development, and assistance in deploying the Company's international network.

The Company also announced this quarter that it has negotiated an agreement to receive income from a master patent covering pre-paid calling cards throughout Europe. Under the agreement, the Company is entitled to receive royalties from all companies selling pre-paid calling cards in Europe who take a license under the patent or against which the patent is successfully enforced. It is expected this will accelerate the growth of IDT's telecom business in Europe.

INTERNET TELEPHONY

Revenues for Net2Phone, the world's first commercial PC-to-phone technology, were $2.1 million, a 100% increase over the prior quarter's revenues of $1 million. Total Net2Phone minutes of use grew to 3.8 million minutes this quarter, a 73% increase over the prior quarter's 2.2 million minutes.

The Company also began its market-by-market US rollout of Net2Phone Direct, a new technology that enables ordinary phone and fax transmission to travel over the Internet. The Company expects to launch Net2Phone Direct internationally this quarter.

The division's tremendous growth is due in part to reseller agreements signed this quarter with large multinational corporations such as Daewoo and Marubeni. The Company has also joined forces with GT Interactive Services (NASDAQ: GTIS - news), the premiere software publishing group, to ship Net2Phone to over 10,000 retail outlets nationwide, including Comp USA and K-Mart.

"We are extremely positive about the potential of our Internet telephony products and services and the new relationships we have formed this past quarter. Specifically, foreign PTTs are looking at our Net2Phone services as a way to target their more price sensitive customers as a way to avoid losing significant market share to the new, competitive carriers," said Net2Phone CEO Clifford Sobel, who joined the Company this quarter after building multimillion dollar companies throughout New Jersey.

FINANCIAL DETAILS

Total expenses for the first quarter of fiscal 1998 were $52.4 million as compared to $39.7 million for the fourth quarter of fiscal 1997. Gross margins were 25.4% as compared to 27.8% for the prior quarter. SG&A for the quarter was $9.8 million as compared to $12.6 million in the same quarter year-ago, and $8.5 million for the prior quarter. SG&A decreased to 18% of revenues for the quarter, as compared to 44% of revenues in the same quarter year-ago, and 20.8 % for the prior quarter. Depreciation for the quarter was $1.7 million as compared to $0.9 million in the same quarter year-ago, and $1.5 million for the prior quarter. As a percentage of revenues, depreciation decreased to 3.1% of revenues for the quarter as compared to 3.4% in the same quarter year-ago, and 3.7% for the prior quarter. Shares used to calculate earnings per share for the first quarter were 25,479,585.

This past quarter, the Company announced that it has secured $13.5 million in financing from a consortium of lenders, which will be used to expand the Company's international telecommunications network. Facilities in the US and the UK are already fully functional, and plans for additional mirror sites throughout Asia and Europe are planned for launch by the end of the year.

IDT CORPORATION

IDT Corporation is a diversified telecommunications company with seven years of innovation within the international telecommunications arena offering a variety of wholesale and retail services. The Company routes and resells international long distance services to individuals and businesses in over 225 countries and to telecommunications carriers in the US and overseas. The Company currently has over 400,000 retail customers using an array of services including international long distance, Internet, and Internet telephony services. The Company is a leader in Internet telephony, routing telephone calls over the Internet at substantially reduced rates.

Except for historical information, all of the expectations and assumptions contained in the foregoing are forward-looking statements involving risks and uncertainties. Important factors that could cause actual results to differ materially from such forward-looking statements, include, but are not limited to, the competitive environment for Internet telephony, changes of rates of all related telco rates and services, legislation that may affect the Internet Telephony industry, IDT's ability to operate the services described on a large scale commercial level. For additional information regarding these and other risks associated with the Company's business refer to the Company's reports filed with the SEC.