Executive Summary

Record profitability despite modest top-line growth: gross profit up 16% to $112.1M with margin expanding 420 bps to 37.0%, operating income up 77% to $28.3M, and Adjusted EBITDA up 56% to $34.0M .
EPS strength: GAAP diluted EPS rose to $0.80 (from $0.57), Non-GAAP EPS to $0.84 (from $0.67) on operating leverage and mix improvements .
Segment execution: NRS recurring revenue +32% (MARPT $310), BOSS Money transactions +36% with gross profit +35% in Fintech, net2phone launched a virtual AI agent and grew subscription revenue +9% (+14% cc) .
Capital returns and outlook: dividend raised 20% to $0.06 and 179,338 shares repurchased for $8.5M; CFO now expects at least as much 2H as 1H Adjusted EBITDA and ~40% FY25 Adjusted EBITDA growth; working-capital timing depressed Q2 operating cash flow but is expected to rebound in Q3 due to quarter-end day-of-week effects .

What Went Well and What Went Wrong

What Went Well
- NRS delivered scale and monetization: recurring revenue +32% to $31.6M, MARPT $310, Adjusted EBITDA +65% to $10.1M; CEO: “we again generated record levels of gross profit, income from operations, and Adjusted EBITDA” .
- Fintech margin execution: BOSS Money transactions +36% to 5.7M; Fintech gross profit +35% to $21.7M and Adjusted EBITDA to $3.9M as management prioritized per-transaction margins, especially in retail .
- Traditional Communications cash generation: segment Adjusted EBITDA +19% to $20.2M, with CEO noting third straight sequential increase and surpassing $20M for first time since FY22 .
What Went Wrong
- Modest consolidated revenue growth: +2% to $303.3M; sequentially, revenue declined vs Q1 as expected seasonality and mix (e.g., Traditional Communications) weighed .
- Operating cash flow optics: operating cash flow ex customer funds deposits fell to $7.3M vs $25.4M in 2Q24 due to BOSS Money prefunding timing; CFO emphasized quarter-end falling on a Friday depressed cash and expects a material rebound in Q3 (Wednesday quarter-end) .
- FX headwinds and slower net2phone seat adds: net2phone grew subscription revenue +9% (+14% cc) but faced a stronger USD; management acknowledged slightly larger deal focus and pipeline timing with optimism for 2H .

Financial Results

Consolidated performance (USD Millions, per-share as noted):

Metric	2Q24	1Q25	2Q25
Revenue	$296.1	$309.6	$303.3
Gross Profit	$96.9	$107.6	$112.1
Income from Operations	$16.0	$23.6	$28.3
Adjusted EBITDA	$21.8	$29.1	$34.0
GAAP Diluted EPS ($)	$0.57	$0.68	$0.80
Non-GAAP Diluted EPS ($)	$0.67	$0.71	$0.84

Segment breakdown (USD Millions unless noted):

Segment	2Q24	1Q25	2Q25
NRS Revenue	$25.2	$30.4	$33.0
NRS Gross Profit	$22.5	$27.6	$30.3
NRS Income from Ops	$5.3	$6.6	$9.1
NRS Adjusted EBITDA	$6.1	$7.6	$10.1
Fintech Revenue (Total)	$28.0	$37.1	$36.8
Fintech Gross Profit	$16.1	$21.6	$21.7
Fintech Income from Ops	$(0.7)	$3.2	$3.1
Fintech Adjusted EBITDA	$0.0	$4.0	$3.9
net2phone Revenue (Total)	$20.4	$21.6	$21.5
net2phone Gross Profit	$16.1	$17.1	$17.0
net2phone Income from Ops	$0.4	$1.0	$1.1
net2phone Adjusted EBITDA	$1.8	$2.5	$2.9
Traditional Communications Revenue	$222.5	$220.5	$212.0
Traditional Communications Gross Profit	$42.3	$41.3	$43.1
Traditional Communications Income from Ops	$14.6	$15.7	$18.1
Traditional Communications Adjusted EBITDA	$17.0	$17.8	$20.2

KPIs:

KPI	2Q24	1Q25	2Q25
NRS Active POS Terminals (000s)	28.7	33.1	34.8
NRS Payment Processing Accounts (000s)	18.2	22.7	23.9
NRS Monthly Avg Recurring Rev/Terminal ($)	285	295	310
BOSS Money Transactions (M)	4.2	5.6	5.7
Avg Rev per BOSS Money Transaction ($)	5.98	6.01	5.87
net2phone Seats (000s)	375	406	410

Balance sheet and cash returns (select):

Cash, cash equivalents, debt securities, current equity investments: $171.1M; no debt; repurchased 179,338 shares for $8.5M at $47.59 avg; dividend increased to $0.06 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Commentary	Change
Adjusted EBITDA growth	FY25	Not specified	“On track to deliver approximately 40% adjusted EBITDA growth in fiscal '25”	New qualitative target
2H Adjusted EBITDA vs 1H	FY25 2H	Not specified	Expect at least as much Adjusted EBITDA in 2H as 1H	New qualitative range
Operating cash flow cadence	Q3 2025	Not specified	Expect materially higher operating cash flow in Q3 vs Q2 due to quarter-end falling on a Wednesday vs Friday (prefunding timing)	New qualitative timing
Quarterly dividend	Ongoing	$0.05	$0.06; management expects to continue raising annually	Raised
Share repurchases	Ongoing	Opportunistic	Stepped up buybacks; 179,338 shares for $8.5M in Q2	Increased pace

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
AI/technology initiatives	Focus on scaling offerings; net2phone growing CCaaS; no AI agent yet disclosed	net2phone launched virtual AI agent; internal adoption at BOSS/NRS; preparing tailored solutions for clients	Positive acceleration
Fintech (BOSS Money) margin vs growth	Deliberate margin expansion, slower retail transactions; strong digital growth	Continued focus on retail margin optimization; transactions +36%, Fintech GP +35%	Sustained margin discipline
Macro/immigration policy	Not highlighted	Management “cautiously optimistic” with no meaningful slowdown observed; February transactions/revenue +30% YoY+; record weekly volumes	Constructive
FX headwinds (net2phone)	Strong USD pressured LATAM; ex-FX subscription revenue +16% YoY	Continued FX headwind; constant currency growth +14%; disciplined SG&A drove EBITDA +55%	Mixed but managed
NRS product roadmap	Adoption of payment processing and SaaS plans	Delivery integration (DoorDash) launched; expanded features to drive SaaS/ARPU	Expanding attach/productivity
Capital allocation	Repurchases continued; dividend initiated at $0.05	Buybacks stepped up; dividend raised to $0.06; intent to raise annually	More shareholder returns

Management Commentary

CEO (Shmuel Jonas): “We again generated record levels of gross profit, income from operations, and Adjusted EBITDA… net2phone’s virtual AI agent… adds value across disparate functions… Traditional Communications… surpassed $20 million [Adjusted EBITDA] for the first time since fiscal 2022” .
CFO (Marcelo Fischer): “Consolidated Adjusted EBITDA… was a record $34 million… we now expect to generate at least as much adjusted EBITDA in the second half… on track to deliver approximately 40% adjusted EBITDA growth in fiscal '25” .
CFO on cash flow timing: Q2 operating cash flow was lower due to prefunding with quarter-end on a Friday; expects materially higher operating cash flow in Q3 with a Wednesday quarter-end .

Q&A Highlights

NRS trajectory and ad/data mix: Ad revenue +~12% YoY; data business +~40% YoY; terminal adds slightly behind plan due to seasonal churn and ramping new salespeople but management expects to make it up through the year .
net2phone growth drivers: Slightly larger deal sizes and strong pipeline expected to improve 2H; FX remains a headwind; management leaning into AI investment to drive ARPU and competitiveness .
BOSS Money profitability vs growth: Management balancing profitable growth—over 80% of transactions are digital with stronger unit economics; prioritizing raising GP in retail while investing “tiptoe” into expansion, avoiding overspending .
Working capital and balance sheet: Strong balance sheet allows IDT to avoid external financing costs for BOSS Money prefunding needs; will continue to fund growth, returns, and potential M&A opportunistically .
Capital returns: Buybacks increased in response to investor feedback; management remains shareholder-friendly and will be opportunistic .

Estimates Context

S&P Global/Capital IQ consensus EPS and revenue estimates for Q2 2025 were not retrievable at the time of analysis due to a temporary access limit. As a result, explicit beat/miss vs Wall Street consensus is unavailable and should be refreshed when data access resumes. Values would be retrieved from S&P Global.

Key Takeaways for Investors

Margin-led upside: Despite only +2% revenue growth, IDT delivered outsized operating leverage—GP +16% to $112.1M and Adjusted EBITDA +56% to $34.0M—driven by mix and cost discipline .
NRS firing on all cylinders: Recurring revenue +32% with MARPT at $310 and EBITDA scaling to $10.1M, supported by new features (e.g., delivery integration) to lift SaaS and payments monetization .
Fintech profitable scale: BOSS Money transactions +36%, Fintech GP +35%, and positive EBITDA as retail margin optimization and digital mix (>80% of transactions) drive unit economics .
net2phone catalyst: Launch of AI agent and continued ARPU focus underpin rising profitability; constant-currency growth +14% highlights underlying demand despite FX .
Cash flow optics likely to improve: Q2 operating cash flow was timing-affected; CFO expects a material rebound in Q3 due to quarter-end calendar effects .
Shareholder returns stepping up: Dividend increased 20% to $0.06 with intent to continue annual increases, plus accelerated repurchases ($8.5M in Q2) .
Near-term trading implications: Narrative centers on sustainable EBITDA growth (CFO: ~40% FY25), AI-enabled expansion at net2phone, and continued NRS/Fintech monetization; watch for Q3 cash flow recovery and NRS/Fintech KPIs to sustain multiple support .

Appendix: Additional Context and Cross-Checks

Consolidated YoY comps: Revenue +2% to $303.3M; GP +16% to $112.1M; Op Inc +77% to $28.3M; GAAP EPS $0.80; Non-GAAP EPS $0.84 .
Capital structure: $171.1M in cash, cash equivalents, debt securities, and current equity investments; no debt .
BOSS Money expansion: New destinations (Venezuela, Eritrea; Brazil expected 3Q25) and debit card funding at retailers; zero-fee promos to Venezuela to build velocity .
NRSInsights macro read: January 2025 same-store sales +4.7% YoY across ~34.8k terminals, supporting retailer health in core markets .

Non-GAAP notes: Non-GAAP EPS excludes severance, stock-based compensation, and other operating items; Adjusted EBITDA excludes D&A, severance, and certain other operating items; see reconciliations in the release .

IDT CORP (IDT)·Q2 2025 Earnings Summary