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IDT Conference Call Summary Company Overview - **Company**: IDT Corporation (NYSE: IDT) - **Market Cap**: $1.2 billion - **Fiscal Year**: Results discussed for the second quarter of fiscal year 2026, ended January 31, 2026 - **Key Metrics**: - Cash: $246 million - No debt - Adjusted EBITDA: $143 million - Adjusted net cash from operating activities: $122 million - Revenue: $1.3 billion - Employees: 1,950 globally, with about 25% in Newark, New Jersey [3][2][4] Business Segments - **High-Margin Growth Businesses**: - National Retail Solutions (NRS) - BOSS Money - net2phone - **Traditional Communications Segment**: - IDT Digital Payments - BOSS Revolution Calling - IDT Global Carrier Services [4][19] National Retail Solutions (NRS) - **Services**: Point-of-sale and payment processing for independent retailers - **Recurring Revenue**: Exceeded $37 million in the most recent quarter, with two-thirds from payment processing [5][6] - **Market Penetration**: Less than 20% of an estimated 200,000 convenience stores in the U.S. [6] - **Growth**: Annualized recurring revenue grew from $45 million in 2022 to $134 million, a 39% CAGR [7] - **Adjusted EBITDA**: Over $39 million with a 30% margin [8] BOSS Money - **Services**: International money remittance primarily for immigrants in the U.S. and Canada - **Digital Transactions**: Almost 90% of transfers via apps; revenue increased 14% in the most recent quarter [9][11] - **Adjusted EBITDA**: $23.8 million on revenue of $165 million, with a margin of 13.7% [12] - **Impact of Federal Tax**: A new 1% tax on cash remittances has positively impacted digital transactions, increasing by 20% year-over-year [23][24] net2phone - **Services**: Intelligent communication solutions for businesses - **Revenue Growth**: 17% subscription revenue CAGR over the past four years, with TTM subscription revenue of $90 million [15] - **Adjusted EBITDA**: Over $14 million with a margin of 16.5% [16] - **AI Solutions**: Introduction of net2phone AI Agent and Coach to enhance customer interactions and agent performance [14][32] Financial Performance - **Consolidated Revenue Growth**: Increased by 14% in the second quarter, with high-margin segments contributing 33% of total revenue [18] - **Adjusted EBITDA Margin**: Increased to a record 11.9%, with growth businesses contributing 56% of adjusted EBITDA [19] - **Long-Term Outlook**: Expected robust increases in cash generation and profitability from high-margin businesses [20] Competitive Landscape - **NRS Competition**: Increased competition from small players; IDT is focusing on enhancing service quality and features [30][31] - **BOSS Money Economics**: Retail transactions generate double the revenue of digital transactions, but digital transactions are more profitable on a margin basis [28][29] Strategic Initiatives - **Digital Marketing**: Increased spending to capture migrating retail customers to digital platforms [24] - **AI Focus**: Transitioning net2phone to emphasize AI offerings and exploring direct-to-market channels [32][34] Conclusion - **IDT's Position**: The company is well-positioned for growth through its high-margin businesses, with a focus on digital transformation and strategic investments in technology and customer experience [19][20]

Investor Presentation NYSE: IDT Sidoti Small Cap Conference (March 2026) ForwýrĀ-Looking Stýtāmānts All statements in this presentation that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current jud ...

Core Insights - IDT Corporation reported a revenue increase of 5.7% year-over-year for Q2 fiscal 2026, reaching $320.5 million, with GAAP EPS rising 5% to $0.84 and non-GAAP EPS increasing 19% to $1.00 [2][8] Financial Performance - Revenues for the second quarter were $320.5 million, up from $303.3 million a year ago [2] - GAAP EPS rose to $0.84 from $0.80, while non-GAAP EPS increased to $1.00 from $0.84 [2] - Gross profit increased 8.2% to $121.3 million, with gross margin improving to 37.8% from 37% [2] - Adjusted EBITDA rose 9% to $38 million from $34.9 million [2] Segment Performance - National Retail Solutions (NRS) generated revenues of $39.4 million, up 19% from $33 million [3] - Fintech segment revenues reached $41.2 million, a 12% increase from $36.8 million [3] - net2phone posted revenues of $23.9 million, rising 11% from $21.5 million [3] - Traditional Communications segment revenues increased 2% to $216.1 million, but profitability declined [3][7] Operational Metrics - NRS active POS terminals increased 12% to 38,900, and payment processing accounts rose 18% to 28,100 [4] - Total recurring revenue climbed 18% to $37.5 million, driven by a 32% increase in merchant services revenue [4] - In the Fintech segment, BOSS Money transactions increased 13% to 6.4 million [5] - net2phone's subscription revenue rose 12%, with total revenue increasing 11% to $23.9 million [6] Management Commentary - Management highlighted the growth in higher-margin segments (NRS, Fintech, net2phone), which accounted for 53% of consolidated adjusted EBITDA [8] - A new federal remittance tax has accelerated the shift from retail to digital channels in Fintech, impacting revenue per transaction but improving margins [9][10] - Management noted that lower advertising CPM rates affected advertising revenue in NRS [11] Guidance and Capital Allocation - IDT raised its fiscal 2026 adjusted EBITDA guidance to $147 million to $149 million, reflecting stronger-than-expected performance [12] - The company repurchased approximately 149,000 shares for $7.4 million and increased the annual dividend by 17% to $0.28 per share [13] Cash Position and Developments - IDT ended the quarter with $246.2 million in cash and equivalents, reporting no outstanding debt [14] - Operating cash flow improved significantly, with net cash from operating activities rising to $38.3 million from $20.2 million [14] - net2phone launched AI-powered communications solutions for healthcare and hospitality sectors [15]

Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2026 or UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-16371 IDT CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 22-3415036 (State or other jurisdiction of incorporation or organization) (I.R.S. Empl ...

Core Insights - February same-store sales increased by 4% year-over-year, showing a durable trend in retail sales growth [5][7] - The average price for the top 500 items rose by 2.7% year-over-year, marking a significant increase from the previous month's 1.2% [6][8] Sales Performance - Same-store sales increased by 4.4% compared to January 2026, following a decrease of 6.6% in January compared to December 2025 [6] - For the three months ending February 28, 2026, same-store sales rose by 4.3% compared to the same period last year [6][10] Units Sold and Transactions - Units sold decreased by 0.2% year-over-year, contrasting with a 2.9% increase in January 2026 [6] - The number of baskets (transactions) per store decreased by 0.8% year-over-year, although there was a 3.7% increase compared to January 2026 [6] Regional Performance - Sales growth was particularly strong in Midwestern cities like Chicago and Detroit, while growth slowed along the East Coast, indicating the influence of regional factors such as weather [8] Transaction Data - The NRS retail network included approximately 38,700 active terminals across 33,600 stores as of February 28, 2026 [2] - In February 2026, NRS' POS terminals processed $1.9 billion in sales, reflecting a 14% year-over-year increase across 122 million transactions [11]

Core Insights - IDT Corporation raised its 2026 adjusted EBITDA guidance to a range of $147 million to $149 million, driven by accelerated digital and AI initiatives [2] Group 1: Financial Performance - CEO Samuel Jonas reported strong overall results, attributing the performance to growth in both top and bottom lines across NRS, BOSS Money, and net2phone [2] - NRS recurring revenue saw significant increases, particularly in Merchant Services and SaaS fees [2]

Chief Executive Officer Shmuel Jonas said NRS recurring revenue grew year-over-year, driven by “large increases in merchant services and SaaS fee revenues.” He added that the company is continuing initiatives to drive additional growth in those areas, expand delivery partnerships, and develop offerings for “differentiated retailer verticals.”Fischer noted that the three growth segments together contributed 53% of consolidated “adjusted EBITDA less CapEx” in the quarter—IDT’s proxy for free cash flow—up from ...

Financial Data and Key Metrics Changes - IDT achieved record levels in several key consolidated financial metrics including gross profit, gross profit margin, Adjusted EBITDA, Adjusted EBITDA margin, and non-GAAP EPS in Q2 of fiscal year 2026 [8] - The company raised its consolidated Adjusted EBITDA guidance for fiscal 2026 from the range of $141-$145 million to $147-$149 million, reflecting a $5 million increase and a 12% increase compared to fiscal 2025 actuals [10] Business Line Data and Key Metrics Changes - NRS recurring revenue grew year-over-year, driven by significant increases in merchant services and SaaS fee revenues [4] - BOSS Money's digital channel transactions increased by 17% year-over-year, benefiting from the new federal remittance tax that accelerated customer migration from lower margin retail to higher margin digital channels [4][5] - Net2Phone's Adjusted EBITDA increased by 37% year-over-year to $3.9 million, exceeding initial expectations [11] Market Data and Key Metrics Changes - The implementation of the federal remittance tax has led to a shift in customer behavior, with a notable increase in digital transactions as customers adapt to minimize costs [26] - The overall market for remittances has been impacted by federal immigration policies, but the digital segment has shown resilience and growth [12][39] Company Strategy and Development Direction - The company is focusing on expanding its higher margin growth segments, specifically NRS, Fintech, and Net2Phone, while reducing reliance on the lower margin Traditional Communications segment [8] - IDT is developing new AI offerings, such as Agentic AI, targeting small and medium businesses, which are expected to enhance customer engagement and revenue [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's financial performance and outlook, highlighting strong cash flow contributions from growth segments [9] - The company is committed to increasing shareholder returns through stock repurchases and dividend increases, with a 17% increase in the annual dividend to $0.28 per share [7][9] Other Important Information - The company has repurchased $15 million in stock in the first six months of fiscal 2026, indicating a proactive approach to capital allocation [9] - The management noted that the advertising and data results were lower than expected due to decreases in CPM rates, which pressured revenues [4] Q&A Session Summary Question: Will NRS release its monthly report again? - Management indicated that the report would likely be released soon [18][19] Question: What caused the increase in SG&A and advertising costs? - Management attributed the increase to new product sales, hiring in advance of product launches, and a higher percentage of sales through resellers [20] Question: How is BOSS Money adapting to the new remittance tax? - Management noted a significant increase in digital transactions since the tax implementation, with ongoing efforts to understand its long-term impact [26][28] Question: What is the competitive landscape for BOSS Money? - Management acknowledged strong competition but emphasized the quality of their app and customer experience as key differentiators [42][43] Question: What are the plans for capital allocation and potential M&A? - Management expressed a preference for maintaining cash reserves for various purposes, including potential acquisitions, while continuing share buybacks opportunistically [47]

Financial Data and Key Metrics Changes - IDT achieved record levels in several key consolidated financial metrics including gross profit, gross profit margin, adjusted EBITDA, adjusted EBITDA margin, and non-GAAP EPS in Q2 of fiscal year 2026 [8] - The consolidated adjusted EBITDA guidance for fiscal 2026 was raised from the range of $141-$145 million to $147-$149 million, reflecting a $5 million increase and a 12% rise compared to fiscal 2025 actuals [10][11] - The three higher margin growth segments (NRS, Fintech, and Net2Phone) contributed 53% of IDT's consolidated adjusted EBITDA less CapEx, up from 45% in the year-ago quarter [9] Business Line Data and Key Metrics Changes - NRS recurring revenue grew year-over-year, driven by significant increases in merchant services and SaaS fee revenues [4] - BOSS Money's digital channel transactions increased by 17% year-over-year, benefiting from the new federal remittance tax that accelerated customer migration to the higher margin digital channel [4][12] - Net2Phone's adjusted EBITDA grew by 37% year-over-year to $3.9 million, exceeding initial expectations [11] Market Data and Key Metrics Changes - The implementation of the federal remittance tax on January 1 led to a shift from lower margin retail transactions to higher margin digital transactions, positively impacting revenue dynamics [5][12] - The advertising and data segment experienced lower-than-expected results due to decreases in CPM rates, which pressured revenues [4] Company Strategy and Development Direction - The company is focusing on expanding its merchant services and SaaS growth while developing offerings for differentiated retailer verticals [4] - IDT is investing in AI product development, with positive customer reviews and increased spending on new offerings like Agentic AI [5] - The company plans to continue increasing shareholder returns through stock repurchases and dividend increases, with a 17% increase in the annual dividend to $0.28 per share [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing rotation towards higher margin segments and the positive outlook for the remainder of the fiscal year [9][10] - The company noted that the remittance tax has had a significant impact on the remittance industry, particularly benefiting digital channels [12] - Management acknowledged the competitive landscape but emphasized the strength of their app and customer experience as key differentiators [41][42] Other Important Information - The company repurchased $15 million in stock during the first six months of fiscal 2026, indicating a commitment to returning capital to shareholders [10] - Traditional Communications segment remains a strong cash generator, contributing $19 million in adjusted EBITDA, although it saw a decrease compared to the previous year [7][14] Q&A Session Summary Question: Will NRS monthly reports be released again? - Management indicated that the report would likely be released soon [20] Question: What caused the increase in SG&A and advertising? - Management attributed the increase to new product sales, hiring in advance of product launches, and a higher percentage of sales through resellers [21] Question: How is BOSS Money adapting to the new remittance tax? - Management noted a significant increase in digital transactions since the tax implementation and observed a migration of retail customers to digital [28][29] Question: What is the outlook for MarketSpark? - Management refrained from commenting on MarketSpark's future plans due to confidentiality [30] Question: Any updates on M&A plans? - Management stated there are no updates on M&A discussions at this time [33] Question: What are the trends in the single store operator market? - Management indicated that economic factors are more impactful than immigration policies on retailer performance [38] Question: How does BOSS Money view competition in the digital space? - Management acknowledged strong competition but emphasized their app's quality and customer experience as competitive advantages [41][42]