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IDT CORP (IDT)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 delivered consolidated revenue of $316.6M (+3% YoY) and Adjusted EBITDA of $33.4M (+33% YoY), as high-margin segments (NRS, Fintech/BOSS Money, net2phone) expanded; GAAP EPS fell to $0.67 due to a prior-year tax benefit, while non-GAAP EPS rose to $0.76 .
  • Versus S&P Global consensus, revenue modestly beat ($316.6M vs $310.0M*), while S&P EBITDA missed ($29.1M* actual vs $35.6M* estimate); company-reported Adjusted EBITDA was $33.4M .
  • FY26 outlook raises the profile: company revises Adjusted EBITDA definition to exclude non-cash comp and guides to $141–$145M under the new measure, up 7–10% YoY versus similarly defined FY25 ($131.7M) .
  • Fintech/BOSS Money momentum (digital volume, WhatsApp integration) and net2phone AI agents are strategic drivers; management expects BOSS Money revenue and EBITDA to grow in the high teens in FY26, while net2phone invests in AI, dampening near-term EBITDA growth to high-single-digits .

What Went Well and What Went Wrong

  • What Went Well

    • Digital-led BOSS Money growth: revenue +21% YoY to $38.2M and segment Adjusted EBITDA +267% to $5.5M in Q4; digital transactions +28% and digital send volume +40% YoY .
    • NRS recurring revenue +22% YoY to $32.6M; Monthly ARR per terminal reached $299; Adjusted EBITDA +32% to $9.3M, with strong operating leverage .
    • net2phone continued steady progress: subscription revenue +8% YoY to $22.2M, Adjusted EBITDA +42% to $3.5M; management highlighted growing traction of AI Agent/Coach offerings and target to include AI in 30%+ of sales by year-end FY26 .

  • What Went Wrong

    • GAAP EPS fell to $0.67 (from $1.45) due to the absence of the prior-year $23.6M tax benefit; net income fell to $16.9M (from $36.8M) in Q4 .
    • NRS churn increased, driven by immigration enforcement impacting retailers, competitor activity, card scheme compliance issues, and technical equipment issues; management is addressing with AI churn prediction, retention efforts, and service improvements .
    • S&P EBITDA missed consensus (S&P EBITDA actual $29.1M* vs $35.6M* estimate), reflecting definitional differences and elevated “Other operating expense” ($5.9M) in Q4; company Adjusted EBITDA was $33.4M .

Financial Results

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$303.3 $302.0 $316.6
Gross Profit ($USD Millions)$112.1 $112.0 $114.5
Gross Margin (%)37.0% 37.1% 36.2%
Operating Income ($USD Millions)$28.3 $26.6 $21.9
Adjusted EBITDA ($USD Millions)$34.0 $32.2 $33.4
GAAP Diluted EPS ($USD)$0.80 $0.86 $0.67
Non-GAAP Diluted EPS ($USD)$0.84 $0.90 $0.76
S&P Global Consensus vs Actual (Q4 2025)Q4 2025
Revenue Consensus Mean ($USD Millions)*$310.0*
Revenue Actual ($USD Millions)$316.6
EBITDA Consensus Mean ($USD Millions)*$35.6*
S&P EBITDA Actual ($USD Millions)*$29.1*
Company Adjusted EBITDA ($USD Millions)$33.4
Primary EPS Consensus Mean*N/A*
GAAP Diluted EPS ($USD)$0.67
Values retrieved from S&P Global.*
Segment Breakdown ($USD Millions unless noted)Q4 2024Q3 2025Q4 2025
NRS Total Revenue$28.2 $31.1 $34.3
NRS Income from Operations$6.0 $6.2 $5.8
NRS Adjusted EBITDA$7.1 $7.2 $9.3
NRS Gross Margin (%)93% 91% 89%
net2phone Total Revenue$21.4 $22.0 $22.8
net2phone Income from Operations$0.8 $1.4 $1.5
net2phone Adjusted EBITDA$2.5 $3.2 $3.5
net2phone Gross Margin (%)78.8% 79.6% 79.5%
Fintech Total Revenue$34.6 $38.6 $42.1
Fintech Income from Operations$2.5 $4.3 $4.8
Fintech Adjusted EBITDA$1.5 $5.0 $5.5
BOSS Money Revenue$31.5 $34.4 $38.2
Traditional Communications Total Revenue$224.6 $210.2 $217.4
Traditional Communications Income from Operations$13.9 $17.3 $15.4
Traditional Communications Adjusted EBITDA$16.3 $19.3 $17.6
Traditional Communications Gross Margin (%)17.9% 20.7% 18.8%
KPIsQ4 2024Q3 2025Q4 2025
NRS Active POS Terminals (units)32,100 35,600 37,200
NRS Payment Processing Accounts (units)21,300 25,500 26,500
NRS Monthly ARR per Terminal ($)$285 $279 $299
BOSS Money Transactions (millions)5.4 6.0 6.6
Digital Transactions (millions)4.3 5.0 5.5
Retail Transactions (millions)1.1 1.0 1.1
net2phone Seats (thousands)396 415 422

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (revised definition excludes non-cash comp)FY 2026Not previously provided under revised measure$141–$145M Raised/Introduced under revised definition
Adjusted EBITDA (revised measure, baseline for YoY)FY 2025N/A$131.7M (revised measure) Baseline disclosed for comparison
Adjusted EBITDA (revised measure, baseline for YoY)FY 2024N/A$97.1M (revised measure) Baseline disclosed for comparison
Dividend per shareOngoing$0.06 (Q2 raised to $0.06) $0.06 declared on Sep 22, payable Oct 10 Maintained
BOSS Money revenue and Adjusted EBITDA growthFY 2026 (budget)N/AHigh teens % growth Introduced
net2phone Adjusted EBITDA growthFY 2026 (budget)N/AHigh single-digit % (slower than revenue growth) Introduced
Traditional Communications gross profit & Adjusted EBITDAFY 2026 (budget)N/ADecline in single-digit % Introduced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 and Q3)Current Period (Q4)Trend
AI agents (net2phone)Q2: AI agent launched, strong internal adoption; Q3: AI agents deployed; customers seeing efficiency gains Targeting 30%+ of sales to include AI Agent/Coach by FY26 YE; usage-based revenue model emerging Expanding commercialization and integration into sales motion
Digital remittances & pricingQ2–Q3: Digital transactions +40% send volume; pricing tests to optimize margin; retail focus shifted to margin over share Digital send volume +40%; removing discounts for larger transactions; 83% of remittances digital in Q4 Continued mix shift to higher-margin digital; monetization improving
Regulatory/tax—1% federal tax on cash/money order remittances Jan 1, 2026; expected to accelerate digital migration New tailwind to digital channel; industry structure changing
NRS platform & churnQ2–Q3: DoorDash integration began; merchant services growth; ad revenue impacted by partner Churn uptick due to enforcement closures, competitor claims, card scheme compliance flags, and equipment issues; retention initiatives underway Addressing churn with AI and service upgrades; new integrations continue
Capital allocation/M&AQ2: Buyback stepped up; dividend raised Opportunistic buybacks to continue; large acquisition attempt failed; focus on organic investments; disciplined M&A Preference for organic growth; selective bolt-ons

Management Commentary

  • CEO (Shmuel Jonas): “IDT’s fourth quarter capped off a strong fiscal year, highlighted by full-year double-digit Adjusted EBITDA expansion at each of our operating segments, combining to drive a 43% increase in consolidated Adjusted EBITDA to a record $129 million.”
  • CEO (Shmuel Jonas): On net2phone, “By year end, 30% or more of our sales will include one or both of our AI solutions... even as we continue to steadily expand our base of UCaaS and CCaaS customers.”
  • CFO (Marcelo Fischer): “Full-year Adjusted EBITDA totaled $128.7 million, surpassing our updated $126 million guidance… Adjusted EBITDA increased 33% to $33.4 million in Q4.”
  • CFO: “Utilizing this revised measure of Adjusted EBITDA, IDT expects to generate a range of $141 to $145 million in consolidated adjusted EBITDA for fiscal 2026.”

Q&A Highlights

  • BOSS Money wallets/stablecoins: Wallets launched in beta; management expects stablecoins to become more prevalent over time, though not yet materially impactful; WhatsApp integration rolling out to existing customers imminently and broader launch in 30–45 days .
  • NRS churn drivers: Store closures tied to immigration enforcement, competitor claims with inferior value, card scheme compliance flags affecting perception, and equipment technical issues (now largely resolved); active win-back strategy .
  • Digital remittance growth sustainability: Growth likely to slow modestly as the category matures, but new tax and product initiatives (wallets, WhatsApp) should sustain robust digital migration; budgeted teen growth in FY26 .
  • net2phone pricing model: Seat-based for UCaaS/CCaaS remains; AI agent offerings shift toward usage-based pricing over time .
  • M&A posture: Large deal fell through; expect more focus on smaller tuck-ins and organic investment; disciplined on price/leverage .

Estimates Context

  • Revenue beat: $316.6M actual vs $310.0M* S&P estimate; modest positive surprise driven by strong NRS and Fintech segment performance .
  • EBITDA miss (S&P metric): $29.1M* actual vs $35.6M* estimate; note definitional differences with company Adjusted EBITDA of $33.4M .
  • EPS consensus unavailable; GAAP EPS of $0.67 reflects absence of prior-year tax benefit .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mix shift toward higher-margin businesses continues to expand gross margin and Adjusted EBITDA; expect FY26 consolidated Adjusted EBITDA $141–$145M (revised measure) as AI and digital initiatives scale .
  • BOSS Money’s digital channel (83% of transactions) and pricing/actionable product integrations (WhatsApp, wallets) support durable profitability; near-term regulatory tax likely accelerates digital adoption .
  • NRS remains a growth engine via merchant services/SaaS; watch near-term churn normalization and ad/data recovery; ARR per terminal rising supports 20–25% revenue growth aspirations .
  • net2phone’s AI Agent/Coach can catalyze usage-based revenues; expect revenue acceleration with tempered EBITDA growth in FY26 due to investment—medium-term EBITDA should inflect positively .
  • Traditional Communications is a cash generator but structurally declining; management budgets single-digit declines—monitor Digital Payments margin resilience .
  • Capital allocation remains balanced (dividends, opportunistic buybacks) with disciplined M&A; conservative leverage stance adds downside protection .
  • Trading lens: Revenue beat vs consensus but EBITDA miss on S&P metric and GAAP EPS down YoY could create mixed near-term reaction; guidance clarity and AI/digital narratives are positive medium-term catalysts .