IDT Corporation Reports Fourth Quarter and Fiscal Year 2025 Results

Core Insights - IDT Corporation reported a strong financial performance for the fourth quarter and full fiscal year 2025, with significant increases in gross profit, income from operations, and adjusted EBITDA, indicating robust growth across its business segments [1][7][11]. Financial Performance - 4Q25 gross profit increased by 12% to $114 million, while FY 2025 gross profit rose by 14% to $446 million [1]. - Income from operations for 4Q25 grew by 9% to $22 million, and for FY 2025, it surged by 55% to $100 million [1][11]. - Adjusted EBITDA for 4Q25 was up 33% to $33 million, and for FY 2025, it increased by 43% to a record $129 million [1][11]. - 4Q25 earnings per share (EPS) were $0.67, with non-GAAP EPS at $0.76; FY 2025 EPS reached $3.01, and non-GAAP EPS was $3.19 [1][11]. Segment Performance National Retail Solutions (NRS) - NRS reported a 22% increase in recurring revenue to $32.6 million, with adjusted EBITDA rising by 32% to $9.3 million [4]. - The segment added approximately 1,500 net active terminals in 4Q25, contributing to a total of 37,200 active POS terminals [14]. - NRS is addressing customer churn through AI for prediction and enhanced service levels [14]. BOSS Money / Fintech Segment - BOSS Money digital revenue increased by 31% to $27.6 million, with total revenue up 21% to $38.2 million [4]. - The segment's income from operations grew by 88% to $4.8 million, and adjusted EBITDA soared by 267% to $5.5 million [4]. - BOSS Money's digital channel now accounts for over 80% of remittance volume, reflecting a significant shift from retail to digital [9][19]. net2phone - Subscription revenue for net2phone increased by 8% to $22.2 million, with income from operations rising by 74% to $1.5 million [4][20]. - The segment is focusing on AI solutions, with expectations that 30% of sales will involve AI offerings by year-end [10][23]. Traditional Communications - Traditional communications revenue decreased by 3% to $217.4 million, with gross profit up 2% to $41 million [22]. - The segment's income from operations increased by 11% to $15.4 million, indicating some resilience despite overall revenue decline [22]. Cash Flow and Capital Expenditures - Net cash provided by operating activities in 4Q25 increased to $31 million from $25.4 million in 4Q24, with FY 2025 net cash rising to $127.1 million from $78.2 million in FY 2024 [28][29]. - Capital expenditures for FY 2025 increased to $20.8 million from $18.9 million in FY 2024, reflecting ongoing investments in growth initiatives [29]. Future Outlook - IDT expects to generate between $141 million and $145 million of adjusted EBITDA in FY 2026, following a revision in its non-GAAP Adjusted EBITDA definition [30][31]. - The company plans to continue investing in new growth initiatives and return cash to stockholders through dividends and share repurchases [12][34].