NEWARK, N.J. - June 14, 2001 - IDT Corporation (NYSE: IDT, IDT.B) today reported revenues of $335.7 million for the third quarter of its Fiscal Year 2001, the three months ended April 30, 2001, up 17% from the second quarter of 2001, and 28% higher than the revenues recorded during the third quarter of Fiscal 2000. As presented in this report, per share figures are based on pro forma shares outstanding, which have been adjusted to retroactively take into account the Company's recent Class B stock dividend.

The net loss for the quarter was $48.3 million, or $0.73 per share. This compares with a net loss of $117.1 million, or $1.77 per share in the second quarter of Fiscal 2001, and net income of $126.0 million, or $1.66 per diluted share in last year's third quarter.

The net loss for the third quarter of Fiscal 2001 includes a total of approximately $23.5 million, or $0.35 per share in after-tax investment and other losses, related primarily to the Company's pro rata interest in the net loss recorded by its former Net2Phone (NASDAQ: NTOP) subsidiary and by Teligent, Inc. In addition, the Company recorded an after-tax loss of approximately $2.8 million, or $0.04 per share, due to the writedown of Internet network assets, and an after-tax loss of approximately $3.3 million, or $0.05 per share, in relation to costs associated with the discontinuation of IDT's wireless operations. Excluding these items, the Company recorded a net loss of $18.7 million, or $0.28 per diluted share.

"Even as the telecom industry endures its current hardships, and many of our former competitors have scaled back their operations or have gone out of business entirely, we continue to post record revenues and minutes-of-use," said Howard Jonas, IDT's Chairman and CEO. "By putting our financial assets to good use, by spending on our network and acquiring assets in the prevailing buyer's market, we can lay the groundwork for continued growth."

RESULTS OF OPERATIONS

The Company's loss from operations increased to $55.6 million in the third quarter of Fiscal 2001, from a loss of $48.5 million in the second quarter of Fiscal 2001. Excluding a non-recurring loss of approximately $5.2 million related to the writedown of Internet network assets, and a loss of $6.0 million related to costs associated with the discontinuation of IDT's wireless operations, the operating loss for the quarter amounted to $44.4 million. Looking ahead, we anticipate that the operating loss will be reduced in the fourth quarter of Fiscal 2001, reflecting continued revenue growth and gross margin improvements in retail telecommunications businesses.

Telecommunications

IDT's core telecommunications business reported record quarterly revenues of $331.4 million for the third quarter of Fiscal 2001, 18% higher than last quarter and an increase of 35% over the telecom revenues recorded in the third quarter of Fiscal 2000. Gross margins for the Company's core telecommunications business amounted to 10.4%, down from 12.1% in the second quarter of 2001.

The growth in telecommunications revenues was driven by strong increases in debit card sales, primarily due to the acquisition of the PT-1 debit card business in February 2001. For the quarter, retail revenues accounted for approximately 71% of overall telecom revenues, compared to 62% in the second quarter of Fiscal 2001 and 47% in the third 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. However, during the third quarter of Fiscal 2001, margins on prepaid calling card sales were restrained by the Company's need to carry the incremental debit minutes-of-use arising from the PT-1 acquisition on PT-1's debit card platform, which resulted in higher costs and lower margins for those minutes. As the Company continues to migrate the minutes-of-use generated by the PT-1 calling cards onto its own debit card platform, we anticipate a solid improvement in gross margins on prepaid calling card revenues. Going forward, we anticipate that overall telecom gross margins will improve gradually over the remainder of Fiscal 2001, with continued improvement expected in Fiscal 2002.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization, and excluding minority interest) in the third quarter for the telecommunications business amounted to a loss of $20.0 million, versus a loss of $16.3 million in the second quarter of 2001 and EBITDA of $9.0 million in the same quarter last year.

The larger EBITDA loss resulted from the narrowing of gross margins discussed above, as well as from an increase in selling, general and administrative (SG&A) expenses incurred in relation to the rapid growth of IDT's retail telecommunications services. However, SG&A expenses as a percentage of revenues continued to decline.

WHOLESALE

IDT's wholesale carrier business reported revenues of $93.8 million, down 9.2% from the second quarter, and a 23% decrease from the third quarter of Fiscal 2000. Wholesale carrier margins improved during the third quarter, after stabilizing 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, in response to the declining financial fortunes of several of its customers. The Company has restructured its carrier group, focusing on serving a smaller group of larger, more financially stable customers, and on forging long-term strategic relationships with the world's largest multinational telecom carriers.

We continue to anticipate that wholesale revenues will decline over the remainder 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 segment enjoyed strong growth in the third quarter of Fiscal 2001, posting $237.6 million in revenues, up 34% from the previous quarter, and 91% higher than the same quarter last year.

Prepaid Calling Cards

Prepaid calling card revenues advanced to $221.2 million in the third quarter of Fiscal 2001, surging 35% from the levels recorded during the second quarter, and increasing about 90% from the third quarter of Fiscal 2000.

The strong growth in prepaid calling card revenues was fueled primarily by the February 2001 acquisition of the calling card operations of PT-1. In addition, IDT benefited from the continued geographic expansion of its debit card distribution operations into areas outside its traditional northeast U.S. strongholds.

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. Consequently, we anticipate that prepaid calling card revenues will continue to exhibit solid growth into Fiscal 2002. In addition, as IDT continues to invest in its debit card platform infrastructure, we anticipate improved margin performance from prepaid calling card operations.

The Company has taken several steps to facilitate the recent growth in its calling card operations, and to prepare for expected future growth. IDT has expanded the operations of its subsidiary in Puerto Rico, which carries out administrative functions related to IDT's calling card business, and conducts call center operations. The subsidiary is designed to take advantage of Puerto Rico's pro-business climate. In addition, the Company plans several telecom network upgrades and expansions, which will allow us to carry the higher anticipated volumes of calling card minutes.

Consumer Long Distance

Consumer long distance revenues for the quarter were up 8.5% from the second quarter, and were more than four times the revenues recorded in the same quarter a year ago. IDT's flat rate, $0.05 per minute long distance plan continues to attract new customers, with approximately 400,000 long distance customers now signed up. We recently announced the successful launch of our new international calling plan which effectively cuts our already competitive overseas rates by an average of 30% to more than 200 countries around the world.

Despite the recent aggressive growth of the consumer long distance business, IDT's average customer acquisition costs remain well below the industry average. We anticipate continued customer and revenue growth in the consumer long distance business, as we continue the rollout of our new international calling plans.

INTERNET

IDT's Internet division recorded an operating loss for the quarter of $8.5 million, compared to losses of $5.2 million and $4.0 million in the second quarter of Fiscal 2001 and the third quarter of Fiscal 2000, respectively. Internet revenues were down 50% compared to those of the prior quarter, and were 53% lower than during the same quarter last year, reflecting the Company's exit from the dial-up Internet access business, subsequent to the sale of the majority of our dial-up Internet access customers to Terra Networks. As a result of the discontinuation of the bulk of its Internet operations, the Company took a non-cash, pre-tax operating charge of approximately $5.2 million ($2.8 million after-tax) associated with the write down of various Internet network assets.

IDT VENTURES

IDT Ventures division recorded an operating loss of $15.6 million in the third quarter, related primarily to ongoing start-up and development costs, compared to a $14.4 million operating loss in the second quarter, and an operating loss of $8.9 million in last year's third quarter. Results for IDT Ventures in the third quarter of Fiscal 2001 were negatively impacted by approximately $6.0 million in losses arising from costs associated with the discontinuation of IDT's wireless business. IDT Ventures recorded revenues of approximately $2.8 million in the third quarter, down from $3.7 million in the previous quarter. IDT Ventures did not record material revenues in the year-ago period.

Class B Stock Dividend

On May 4, 2001, IDT declared a stock dividend of one share of Class B Common Stock for every one share of Common Stock, Class A Common Stock and Class B Common Stock. The shares of IDT's Class B Common Stock are entitled to one-tenth of a vote per share. IDT distributed the dividend shares on May 31, 2001 and the Class B Common Stock commenced trading on the NYSE on June 1, 2001 with the ticker symbol IDT.B. As of June 14, 2001, there were an aggregate outstanding total of 68,564,182 shares of IDT Common Stock of all classes.

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, 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 will now be reported as equity income/(loss) in our financial statements. For the purposes of proper comparison with periods prior to Fiscal 2001 in the discussion of operations above, we have presented results for IDT excluding Net2Phone in all periods.

CONFERENCE CALL INFORMATION

In connection with this release of quarterly results, the Company will be hosting a conference call today for analysts, investors and the general public, at 4:30 PM EST.

To access the call from the U.S., dial 1-800-446-1671. For international callers, the dial-in number is 1-847-413-3362. No passcode is required. A replay of the teleconference will be available for one week after the conference call at 1-800-273-4061 for domestic callers, or 1-402-220-4792 for international callers.

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 in a pop-up window on the front page of the website. You will need Real Audio software to listen to the streaming feed of the conference call. 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 Investor Relations section of the Company's web site (http://www.idt.net/ir/index.htm) which contains company information, frequently asked questions, downloadable financial tables and other informative content.

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 and dedicated Internet access 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:
Mary Jennings
Manager, Investor Relations
(973) 438-3124