A quarter to quarter comparison shows a 21% revenue increase to $160.7
million from $133.3 million in the prior quarter. EBITDA in the second
quarter decreased 26% sequentially to $10.4 million or $0.29 per diluted
share as compared to $15.1 million or $0.42 per diluted share in the prior
quarter. Net income for the quarter was $2.1 million or $0.06 per diluted
share as compared to the prior quarter's net income of $4.9 million or $0.14
per share.

As announced in January, the Company has strengthened its management team with the addition of several key personnel to focus exclusively on
international network expansion and infrastructure development.

"This was a record quarter for the Company with regard to top line results,
and we are continuing to focus our efforts and resources on further
expanding our international network infrastructure to support the
overwhelming demand for our services," said Howard Jonas, CEO of IDT. "Our ability to terminate more traffic on net should only increase our
profitability and competitive positioning. We believe we are well on our way
to achieving these goals."

TELECOMMUNICATIONS
IDT's telecommunications operations continued its rapid pace of growth.
Telecom revenues for the quarter increased to $149.2 million, up 137% over
same period year-ago revenues of $63.0 million and a 21% sequential increase over revenues of $123.7 million for the prior quarter. Telecom gross margins in this quarter were 19.9% as compared to 23.2% for the prior quarter. Telecom minutes of use grew to approximately 685 million minutes for the quarter, a 325% increase over 161 million minutes of use in the same quarter year ago, and a 38% increase over the prior quarter's 496 million minutes.

The Company has seen significant growth in its wholesale carrier services
division, which reported revenues of $54.8 million, up 13% over the prior
quarter's revenues of $48.4 million, and a 43% year over year improvement.

This quarter, the Company announced that it has signed agreements to
establish fiber-optic connections with France Telecom (NYSE: FTE), Deutsche Telekom (NYSE: DT), and Telefonica (NYSE: TEF). This will enable the Company to provide better access and lower termination rates for its international long distance to a number of countries throughout Europe. The Company is obtaining licenses and building facilities in markets in Europe, Asia, Latin America, and North America.

Revenues from IDT's retail division saw strong growth over the past quarter.
In particular, pre-paid calling card revenues for the second quarter
increased to $86 million, up 375% from $18.1 in the same quarter year ago,
and up 28% sequentially from $67.3 million in revenues for the prior
quarter.

The Company recently announced two deals with "M&M's" Chocolate Candies and Wells Fargo to provide specially-branded pre-paid phone cards. The Company expects to have the "M&M's" Chocolate Candies cards on the market by the end of the month, and has already begun offering pre-paid phone card and long distance services to Wells Fargo's business and credit card customers.

INTERNET TELEPHONY
Revenues for IDT's Internet telephony division in the second quarter were
$7.2 million, up 167% over same-period year-ago revenues of $2.7 million,
and a 36% sequential increase over revenues of $5.3 million for the prior
quarter. Total Net2Phone minutes of use grew to 53 million minutes for the
quarter, a 54% increase over the prior quarter's 34.5 million minutes.

INTERNET
IDT's Internet division reported revenues to $4.3 million, which were equal
to prior quarter's revenues of $4.3 million, and a 17% decrease from $5.2
million in the same quarter year-ago.

FINANCIAL DETAILS
Gross margins for the second quarter were 21.2% as compared to 24.2% for the prior quarter. SG&A for the quarter was $23.8 million as compared to the same quarter year-ago SG&A of $13.9 million, and $17.1 million last quarter. SG&A, as a percentage of revenues, was 14.8% for the quarter, as compared to 19.6% in the same quarter year-ago, and 12.8% for the prior quarter. The increase in SG&A was due to increased spending and marketing for the Company's retail services.

EBITDA margins for the second quarter were 6.5% as compared to 11.4% in the prior quarter. Operating margins were 2.6%, as compared to 7.3% in the prior quarter. Depreciation for the quarter was $6.3 million as compared to $2.0 million in the same quarter year-ago, reflecting increased spending on domestic and international network expansion. As a percentage of revenues, depreciation was 3.9% of revenues for the quarter as compared to 2.9% in the same quarter year-ago, and 4.1% for the prior quarter.

The Company finished the quarter with $140 million in cash, which it
believes is sufficient to fund ongoing capital expenditures. Shares used to
calculate earnings per share for the second quarter were 35.5 million.

IDT CORPORATION
IDT is a leading emerging multinational carrier that combines its position
as an international telecommunications operator, its experience as an
Internet service provider and its leading position in Internet telephony to
provide a broad range of telecommunications services to its wholesale and
retail customers worldwide. The company provides its customers with
integrated and competitively priced international and domestic long
distance, pre-paid calling cards, Internet access and, through its Net2Phone product offerings, Internet telephony services including Net2Phone Direct, Net2Fax, and Click2Talk.

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.