What IDT (IDT) Said on Its Q4 Earnings Call

Key Points

• IDT reported record fiscal 2026 results, with revenue up 5% and adjusted EBITDA rising 17% to $154.6 million, above its revised guidance. Higher-margin NRS, Fintech and net2phone generated 53% of segment adjusted EBITDA before corporate overhead.
• NRS, Fintech and net2phone each posted strong growth. NRS revenue rose 31%, Fintech benefited from a shift toward higher-margin digital remittances, and net2phone subscription revenue increased 10% while expanding its AI offerings.
• IDT issued an optimistic fiscal 2027 outlook, forecasting gross profit of $545 million-$555 million and adjusted EBITDA of $176 million-$180 million. The company ended the year with $272 million in cash and liquid investments, no debt, and expects NRS revenue growth of approximately 20%-25%.

IDT NYSE: IDT said its fiscal fourth quarter capped what management described as the strongest year in the company’s operational history, as growth in its higher-margin NRS, Fintech and net2phone businesses lifted revenue, gross profit and adjusted EBITDA to record levels.

Chief Executive Officer Shmuel Jonas said each of the company’s three high-margin growth segments increased its quarterly and full-year contributions, while traditional communications generated more adjusted EBITDA in fiscal 2026 than in either fiscal 2025 or fiscal 2024.

Fourth-quarter consolidated revenue rose 7% year over year, while full-year revenue increased 5%, accelerating from 2% growth in fiscal 2025, Chief Financial Officer Marcelo Fischer said. Full-year adjusted EBITDA increased 17% to $154.6 million, exceeding the company’s revised guidance range of $150 million to $152 million.

Fischer said the company’s higher-growth NRS, Fintech and net2phone segments contributed 53% of consolidated adjusted EBITDA before corporate overhead during fiscal 2026, up from 46% a year earlier, despite accounting for roughly one-third of consolidated revenue.

NRS Revenue and EBITDA Increase

NRS recorded fourth-quarter revenue of $45 million, up 31% from the prior year. Merchant services revenue rose 31% to $28.5 million, while advertising and data revenue increased 49% to $10 million. NRS adjusted EBITDA grew 47% year over year, producing a 31% adjusted EBITDA margin.

Fischer said NRS results benefited from a one-time import tariff refund recorded in cost of revenue. Excluding that item, he said gross margin was consistent with recent quarters. For the full year, NRS generated a 92% gross margin, which Fischer characterized as a more indicative measure of future performance.

The company is changing how it reports a key NRS network metric. Beginning this quarter, IDT will disclose retailer locations and average monthly gross profit per location, replacing its monthly average recurring revenue per terminal metric.

Jonas said the company plans to increase investment in NRS sales personnel to accelerate network expansion, while remaining selective about the types of retailers it targets. Management is focusing on higher-volume stores and locations that can use a wider range of NRS services, including delivery-related features.

“We’ve become much more regimented about making sure that we’re going after the right kinds of stores that produce the right results for our business,” Jonas said. He added that stores with substantial food offerings and delivery activity can be more profitable than retailers with fewer applicable services.

NRS recently added Uber Eats integration after previously announced partnerships with Grubhub and DoorDash. Jonas said advertising demand has also strengthened as retailers and brands see results from campaigns on the network. An acquisition contributed additional advertising-related business, he said.

Digital Remittances Drive Fintech Results

BOSS Money remained the primary contributor within IDT’s Fintech segment, representing 90% of segment revenue in the fourth quarter. The remittance service surpassed a 30 million annual transaction run rate in May, aided by Mother’s Day activity in its digital channel, Jonas said.

Digital-originated transactions accounted for 88% of total BOSS Money transaction volume in the fourth quarter. Digital transactions increased 20%, digital-channel revenue grew 22%, and digital send volume rose 38% as customers sent more funds per transaction.

Fischer said a new federal tax on remittances that affects cash-originated transfers has further encouraged the migration from retailer-agent transactions to digital alternatives. Retail-agent revenue declined 17% in the quarter, but management said customers shifting to digital channels generate more profitable transactions.

Fintech fourth-quarter gross margin expanded 650 basis points from the prior year to 66%, reflecting the digital mix shift, higher average send amounts and improved payout-partner pricing. For the full year, Fintech revenue rose 14% to $176 million, while income from operations increased 40% and adjusted EBITDA rose 41%.

The company recently introduced transfers through WhatsApp and deployed a digital wallet in the U.S. It is also expanding the BOSS Money app internationally with country-specific features, including peer-to-peer remittances, stablecoin-backed wallet offerings, reloadable debit cards and other money-management tools. IDT is also launching a BOSS Money rechargeable card with credit-building features.

Fischer said the company’s share of the U.S.-to-Mexico remittance corridor increased from less than 2% about a year ago to just under 3% currently.

net2phone Expands AI Offerings

net2phone subscription revenue increased 10% year over year in the fourth quarter, or 7% on a constant-currency basis. The cloud communications business ended fiscal 2026 with 447,000 seats, a 6% increase, with U.S. seats rising 7%. Revenue from its contact-center-as-a-service business increased 24%.

For the full year, net2phone subscription revenue grew 10% to $94.6 million. Income from operations rose 84% to $9.1 million and adjusted EBITDA increased 33% to $16.1 million, with adjusted EBITDA margins reaching approximately 17%.

Jonas said net2phone’s AI Agent, Coach AI and integration layer are central to customer discussions and sales efforts. He said IDT itself uses the technology across customer-service and other functions, with more than 70% of communications handled by AI in some capacity. net2phone is on track to surpass $100 million in annual recurring revenue during the current quarter, according to management.

Fiscal 2027 Outlook and Balance Sheet

Traditional communications generated full-year adjusted EBITDA of $77 million, up 1%, as the company reduced selling, general and administrative expenses by nearly 6%. Gross profit in the segment declined 4% to $163 million for the year. Management expects revenue from BOSS Revolution Calling to continue declining at a double-digit rate, but said digital migration, subscription plans, digital payments growth and cost reductions should limit the effect on profitability.

IDT ended fiscal 2026 with $272 million in unrestricted cash and liquid investments and no debt. The company repurchased approximately 31,000 shares for $2 million in the fourth quarter and about 422,000 shares for $21 million during the full fiscal year.

For fiscal 2027, IDT expects consolidated gross profit of $545 million to $555 million, representing an 11% increase at the midpoint. The company forecast adjusted EBITDA of $176 million to $180 million, a 15% increase at the midpoint from fiscal 2026.

Fischer said the outlook assumes revenue growth of about 20% to 25% at NRS and faster EBITDA growth in that segment. He also expects continued Fintech expansion and a modest increase in net2phone adjusted EBITDA as the business reinvests in its AI development roadmap.

About IDT (NYSE:IDT)

IDT Corporation is a telecommunications and financial technology company that provides communications, payment and business services to consumers, small businesses and retail customers. The company operates through brands and businesses focused on international calling, mobile top-ups, money transfers, cloud communications and retail technology.

Its BOSS Revolution platform offers international calling, prepaid wireless services, mobile recharging and international money transfers, primarily serving immigrant and international communities.

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