Transcript: IDT Q4 2026 Earnings Conference Call

IDT (NYSE: IDT ) held its fourth-quarter earnings conference call on Monday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

5 million. The company raised its full-year FY26 Adjusted EBITDA guidance to $150 to $152 million, indicating 15% growth over fiscal year 2025, driven by the performance of its higher-margin businesses. Notable operational highlights include a 22% year-over-year growth in NRS recurring revenue and a 14% increase in payment processing accounts, alongside an expanded digital channel with 40% growth in digital send volume. IDT acquired a controlling stake in Encore Digital to enhance its advertising capabilities, integrating with NRS Screen Network to bolster retail offerings.

6 million year over year, maintaining a stable Adjusted EBITDA. Management expressed optimism about future growth, highlighting the integration of AI tools across business segments and the potential for further margin expansion in BOSS Money as the digital channel grows. The company continued its share repurchase program, buying back approximately 84,000 shares for $4 million, supported by strong free cash flow and a debt-free balance sheet. Full Transcript OPERATOR Good evening.

Welcome to IDT Corporation's third quarter fiscal year 2026 earnings conference call. All participants are now in a listen-only mode. A question-and-answer session will follow management's remarks. Anyone requiring operator assistance during the conference call should press Star-0 on your telephone keypad.

Please note this conference call is being recorded. I will now turn the call over to Bill Olry of IDT Investor Relations. Bill, you may begin. Bill Olry, Investor Relations Thank you, John.

In today's presentation, IDT's Chief Executive Officer Shmuel Jonas and Chief Financial Officer Marcelo Fisher will discuss IDT's financial and operational results for the three months ended April 30, 2026. After their remarks, they will take your questions. Any forward-looking statements made during this conference call, either in their remarks or during the Q&A that follows, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates.

These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the reports that IDT files periodically with the SEC. IDT assumes no obligation to update any forward-looking statements that they have made or may make, or to update the factors that may cause actual results to differ materially from those that they forecast. In their presentation or in the Q&A session, IDT's management may make reference to non-GAAP measures including Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP earnings per share, NRS's Rule of 40 score, and adjusted net cash provided by operating activities.

Schedules provided in the IDT earnings release reconcile these non-GAAP measures to their nearest corresponding GAAP measures. Please note that the IDT earnings release is available on the Investor Relations page of the IDT Corporation website. The earnings release has also been filed on a Form 8-K with the SEC. And now I'll turn the call over to Shmuel for his comments on the quarter's results.

Shmuel Jonas, Chief Executive Officer Thank you, Bill, and thanks to everyone on the call for joining us this evening. Last Friday my father rang the opening bell at the NYSE to celebrate IDT's 25th anniversary as a NYSE-listed company and our 30th anniversary as a public company. Over 100 employees, on their own dime, from all over the world made the trip into Manhattan to be part of the event. After the event I agreed to reimburse them, but I wanted only people to come who genuinely wanted to be there.

I'll be honest, I wasn't sure what to expect going in, and as you can tell from my notoriously short speeches, I don't really like long-winded events. But the moment we approached the exchange and my father saw the IDT sign and smiled at me, something shifted for me. The NYSE team had done something really special. They pulled together photos and documents from our past listing anniversaries, creating a timeline of the people, the documents, the history of IDT, and it was a very proud moment.

What struck me most throughout the morning was the pride of being part of an organization that has stayed relevant and innovative throughout those 30 years, including the spinoff of five public companies, and that has consistently delivered for employees and shareholders alike. Although not always in a straight line, IDT's year-over-year revenue and earnings growth was again powered by the continued expansion and operating leverage of our three higher-margin businesses, paired with another quarter of steady cash generation from our traditional communications segment. 7 million. 8%, a record quarterly high.

5 million. Based on our year-to-date performance and forward visibility, we are raising our full-year FY26 Adjusted EBITDA guidance to $150 to $152 million, representing 15% growth at the midpoint over fiscal year 2025. NRS recurring revenue grew 22% year over year, and monthly average recurring revenue per terminal increased approximately 10%, driven by merchant services and SaaS fees. We expect both categories to continue driving growth in the coming quarters.

The terminal network now stands at over 39,000 active POS terminals, and payment processing accounts are also above 29,000, up 14% year over year. NRS's Rule of 40 score was 50 in the quarter, reflecting a healthy balance between growth and profitability. After the quarter closed, we acquired a controlling stake in Encore Digital, a digital media brokerage. Encore's platform, demand relationships, and publisher network will be integrated with NRS Screen Network and first-party transaction data to create a more competitive retail offering.

Our Digital Channel revenue growth rate accelerated in the third quarter compared to the second quarter. Digital transactions grew 20% year over year, and digital send volume—the actual dollars our customers are moving—grew 40%. We gained market share following the implementation of the new federal remittance tax as customers sought reliable, cost-effective alternatives. net2phone continued its growth trajectory with subscription revenue up 12% and total revenue up 11%.

Seats served reached 441,000, up 6% year over year, with CCaaS seats growing faster than UCaaS, driving revenue per seat higher. 6%. Most significantly, income from operations was up 76%. We are gaining traction with our AI offerings and expect them to become accretive growth drivers in fiscal year 2027.

All net2phone offerings will also benefit from the recent release of Integrate by net2phone, an integration layer that enables our clients to easily, through a straightforward no-code interface, use our offerings with the tools they already work with every day, such as popular CRMs and ERPs and much more. Our traditional communications segment continued its role as a reliable cash generator. 7 million. IDT's global revenue grew 11%, partially offsetting the expected decline in BOSS Revolution calling.

Across all our business segments, we are integrating machine learning and AI tools to better understand and meet the expectations of our customers, develop and provide new features faster, better, and cheaper. Additionally, we are enhancing customer service, refining pricing strategies, accelerating product launches, creating marketing campaigns, and streamlining back-office operations, to name just a few. We expect that our AI efforts, in some cases, will serve as the basis for AI offerings that we can sell to our customers. Thirty years ago, IDT was a scrappy long-distance phone company.

Today we operate a POS network serving nearly 40,000 independent retailers, a growing digital remittance business gaining market share in real time, a cloud communications platform with AI capabilities, and a traditional communications segment that continues to generate meaningful cash. Thank you all for your continued confidence in IDT. Marcelo will now walk through the financial details. Marcelo Fisher, Chief Financial Officer Thank you, Shmuel.

My remarks on our third quarter fiscal '26 results will focus on year-over-year comparisons in order to set aside the seasonal impacts on our business. As a reminder, our fiscal third quarter—February through April—had just 89 days, roughly 3% fewer days than our other fiscal quarters. With that as context, we were very pleased with our consolidated performance. The third quarter extended the trajectory that we have been on for several years.

The underlying growth dynamic at IDT remains in force. Our consolidated results increasingly reflect the growing contribution of our three higher-margin growth segments—NRS, FinTech, and net2phone—even as our large traditional communications segment becomes relatively less impactful. That rotation again produced record consolidated gross profit and a record consolidated gross profit margin in the quarter. 8%.

Let me put that rotation in number terms. Our three growth segments contributed $107 million of revenue in the quarter—about 34% of our consolidated total—up from 30% a year ago. Because the combined gross margin is far higher than that of traditional communications, that shift continues to generate substantial operating leverage as the revenue scales. In the third quarter, our growth businesses' gross profit contribution increased to 67% from 61% a year earlier.

5 million. In aggregate, our three growth segments generated 55% of IDT's consolidated Adjusted EBITDA in the third quarter, up from 49% in the year-ago quarter. Because these segments still account for only about one third of our revenue, that rotation has a long way left to run. I also want to call your attention to the consistent profitability of traditional communications, which slightly increased its Adjusted EBITDA contribution year over year this quarter even as its revenue edged slightly lower.

This segment will remain a reliable contributor to our cash generation for many years to come. On the balance sheet, we ended the quarter with $251 million in cash, cash equivalents, and current debt and equity securities, exclusive of restricted cash. 07 per share. We also continued to repurchase shares opportunistically during the quarter, repurchasing approximately 84,000 shares for $4 million.

Our growing free cash flow and debt-free balance sheet let us keep investing in our growth initiatives while returning cash to stockholders, and we expect to continue doing both. In terms of our outlook, given our results through the first nine months of the year and our visibility into the fourth quarter, we are again raising our full-year fiscal '26 guidance for consolidated Adjusted EBITDA from the $147 to $149 million range we provided last quarter to a new range of $150 to $152 million at the midpoint. 7 million.

This latest guidance raise reflects both the increasing operating leverage we are seeing in our growth segments and the resilience of traditional communications' contribution. To sum up, this was another quarter of disciplined, profitable growth, and we are carrying real momentum into the close of our fiscal year. Just to finish up on a nostalgic note, as Shmuel mentioned, this year is our 30th year as a public company. So naturally I had to take a look at IDT's first annual 10-K report from 30 years ago—1996.

That year, IDT reported revenue of $58 million and a net loss of $16 million. Today, even after spinning off five public companies, we are generating 22 times the revenue and over $100 million more in net earnings. I am especially pleased by our performance over the past few years. In fiscal 2021, just five years ago, IDT reported $75 million in Adjusted EBITDA.

In fiscal '26, we are now on track to more than double that amount. So indeed, there was much to celebrate at the New York Stock Exchange last Friday. We are proud of all that we have accomplished and excited by the opportunities ahead. Now Shmuel and I will do our best to answer your questions.

Operator, back to you for Q&A. OPERATOR Thank you. The question and answer session will now begin. If you would like to ask a question, please press Star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we assemble the roster.

Our first question is from Diego Alonso with Stoic Capital. Please go ahead with your question. Diego Alonso, Analyst at Stoic Capital Hello Bill, Marcelo and Shmuel. First, congratulations on the 25 years and thank you for sharing the touching words.

I'm happy you spent some money flying people over to newer stock exchange knowing how tightly you manage money. So I'm glad you're celebrating how it is worth it. So the first, that was not the only milestone this quarter and I have a question on another milestone which was NRS having the first terminal in a non-North American country. So this year, this quarter, sorry, Colombia was the first country where you had an NRS terminal.

I'm wondering why you selected that country and is it beta testing? How should we think about the growth of NRS in that country? Shmuel Jonas, Chief Executive Officer The real answer is we could have selected, you know, a bunch of different countries to, you know, to have an expansion and we have, you know, some partners there that, you know, suggested that we try it there and we decided, you know, why not? Diego Alonso, Analyst at Stoic Capital Okay.

I would like to ask another question on Encore and the acquisition. We know that advertisement has been a challenging industry in the last few years with so many streaming services offering screen time and you have suffered those consequences. Now with this acquisition, how should we think about advertisement in NRS? What can we expect of it?

Shmuel Jonas, Chief Executive Officer I mean, listen, we definitely think that they are going to be a help to our advertising group. They have a lot of expertise internally that we as a company didn't have. They have a lot of relationships that we as a company didn't have. And they're very good guys to work with and we've worked with them as part of partners for a number of years already.

So this is sort of a long term relationship already and we expect it to be an accretive acquisition. Diego Alonso, Analyst at Stoic Capital Okay. In terms of net2phone, a couple of years ago you went through the process of getting those papers ready to do the spinoff. That was cancelled.

Now we are in an environment where IPOs are the topic of the hour again and valuations are stretched. I'm looking at one of your peers in the segment that is growing organically less than you, has literally the same amount of revenue and they're trading at three times sales plus. Is this enough of a valuation for you to spin off net2phone? Or in view of the excitement that you have around the new AI offerings, you would like to keep it close to your chest for a longer time?

Shmuel Jonas, Chief Executive Officer It's a good question. I'm not prepared to really give an answer on today's call. I mean, I would definitely say that it's becoming more appealing to possibly do something. That being said, I'm very, very, you know, confident that net2phone is going to do much better than our investors think it's going to do and much better than some of the competitors that you mentioned without mentioning.

So. Yeah. Diego Alonso, Analyst at Stoic Capital Okay. And one last question on Boss Money.

The performance this quarter has been impressive. You are acquiring customers like, like I haven't seen in a long time. And I'm wondering, you expanded margin despite this customer acquisition cost. If we think about Boss Money in a steady state, what kind of EBITDA margins do you think it can produce?

A steady state meaning less marketing expense? Shmuel Jonas, Chief Executive Officer Yeah, I don't know the answer to the question. I mean, you know, we had, you know, relatively good margins. I agree.

You know, we try to, you know, be opportunistic, you know, you know, when we can be. And you know, by the same token, we're very, you know, I'll say, sensitive to the fact that we want to continue to have our customers for a long time and continue to attract new customers. And to do so, you cannot have prices that aren't correct in the market.