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]

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]

Core Insights - IDT reported significant growth in recurring revenue, primarily driven by increases in merchant services and SaaS fee revenues, with a focus on expanding delivery partnerships and developing offerings for differentiated retailer verticals [1] - The three growth segments contributed 53% of consolidated adjusted EBITDA less CapEx, an increase from 45% in the previous year, indicating improved cash flow contributions from these segments [1] - Record levels were achieved in gross profit, gross profit margin, adjusted EBITDA, adjusted EBITDA margin, and non-GAAP earnings per share, attributed to a shift towards higher-margin segments [1] Financial Performance - The annual dividend was increased by 17% to $0.28, and $15 million of stock was repurchased in the first half of fiscal 2026, with management indicating that buybacks will remain opportunistic [2][16] - Adjusted EBITDA guidance for fiscal 2026 was raised to a range of $147 million to $149 million, reflecting stronger-than-expected profitability across segments [15] Segment Performance - BOSS Money experienced a 17% increase in digital transactions and a 15% rise in gross profit, with adjusted EBITDA for the segment jumping 44% year-over-year, driven by a new remittance tax that accelerated customer migration to digital transactions [3][5][7] - net2phone's adjusted EBITDA rose 37% year-over-year to $3.9 million, supported by improved gross margins and disciplined investment in AI offerings [10][11] - Traditional Communications generated $19 million in adjusted EBITDA, showing resilience despite a slight decline compared to the previous year [13][14] Market Conditions - The competitive landscape remains strong, with both traditional and digital-only rivals, prompting increased spending on customer acquisition [9] - Management noted that the economics of single-store operators are more influenced by the broader economy than immigration issues, although market-specific impacts may exist [4]

Core Insights - IDT Corporation reported record quarterly gross profit, gross profit margin, Adjusted EBITDA, and Non-GAAP EPS for the second quarter of fiscal year 2026, with significant growth in income from operations across its segments [1][2][3] Financial Performance - Revenue increased by 6% to $320.5 million from $303.3 million year-over-year [3] - Gross profit rose by 8% to $121.3 million from $112.1 million [3] - Gross profit margin improved by 88 basis points to 37.8% from 37.0% [3] - Income from operations decreased by 4% to $27.2 million from $28.3 million [3] - GAAP EPS increased by $0.04 to $0.84 from $0.80 [3] - Non-GAAP EPS increased by $0.16 to $1.00 from $0.84 [3] - Adjusted EBITDA grew by 9% to $38.0 million from $34.9 million [3] Segment Performance National Retail Solutions (NRS) - Active POS terminals increased by 12% to 38,900 from 34,800 [10] - Payment processing accounts grew by 18% to 28,100 from 23,900 [10] - Merchant Services revenue increased by 32% to $24.0 million from $18.1 million [10] - Total recurring revenue rose by 18% to $37.5 million from $31.6 million [10] - NRS' 'Rule of 40' score was 46, indicating a strong balance between growth and profitability [10] BOSS Money and Fintech Segment - BOSS Money transactions increased by 13% to 6.4 million from 5.7 million [11] - Digital channel transactions rose by 17% year-over-year [11] - Fintech segment revenue increased by 12% to $41.2 million from $36.8 million [11] - Average revenue per transaction decreased by 4% to $5.63 [11] net2phone - Subscription revenue increased by 12% year-over-year [17] - Gross profit rose by 13% year-over-year [17] - Income from operations increased by 96% to $2.2 million [17] - Adjusted EBITDA grew by 37% to $3.9 million [17] Capital Management - IDT repurchased 308,000 shares for $15 million in the first half of FY2026 [1] - The annual dividend was increased by 17% to $0.28 per share [1][24] Financial Outlook - IDT raised its FY 2026 guidance for consolidated Adjusted EBITDA to a range of $147-$149 million, representing a 12% increase from FY 2025 [23]

Core Viewpoint - IDT Corporation is set to release its financial and operational results for the second quarter of fiscal year 2026 on March 10, 2026, at approximately 4:30 PM Eastern [1]. Financial Reporting - The earnings conference call will take place at 5:30 PM Eastern on the same day, featuring management's discussion of the results followed by a Q&A session with investors [2]. - A replay of the conference call will be available approximately three hours after its conclusion until March 24, 2026, accessible via phone and streaming audio on the IDT investor relations website [3]. Company Overview - IDT Corporation is a global provider of fintech and communications solutions, operating through various synergistic businesses, including: - National Retail Solutions (NRS) which offers a point-of-sale (POS) platform for independent retailers [4]. - BOSS Money, which facilitates international remittances and fintech payment solutions [4]. - net2phone, providing unified communications and AI-driven workflow solutions for businesses [4]. - IDT Digital Payments and BOSS Revolution, which offer convenient prepaid products and international calling services [4]. - IDT Global and IDT Express, enabling international voice and SMS messaging services [4].

Core Viewpoint - IDT Corporation reported solid first-quarter fiscal 2026 results, with significant year-over-year growth in revenue, income, and profitability metrics, despite a recent decline in stock performance compared to the S&P 500 Index. Financial Performance - Revenue increased by 4.3% year over year to $322.8 million from $309.6 million [2] - Income from operations rose 30.8% to $30.9 million from $23.6 million [2] - Net income attributable to IDT grew 29.6% to $22.4 million from $17.2 million [2] - GAAP earnings per share (EPS) improved 30.9% to $0.89 from $0.68 [2] - Non-GAAP diluted EPS advanced 32.4% to $0.94 from $0.71 [2] Profitability Metrics - Gross profit climbed 9.8% to $118.2 million from $107.6 million [3] - Gross margin expanded by 180 basis points to 36.6% from 34.8% [3] - Adjusted EBITDA increased by 26% to $37.9 million from $30 million [3] Segment Performance - **National Retail Solutions (NRS)**: Revenue increased 22% year over year to $37.1 million from $30.4 million, with recurring revenue reaching $35.3 million, up 22% [4] - **Fintech**: Total segment revenue grew 15% to $42.7 million from $37.1 million, with digital send volume increasing 34% year over year [5] - **net2phone**: Subscription revenue increased 10% to $23.0 million from $21 million, supported by a 7% rise in seats [6] - **Traditional Communications**: Revenue declined 0.5% to $219.5 million from $220.5 million, but income from operations increased 1% to $15.8 million [7] Key Business Metrics - Digital transactions from BOSS Money accounted for 84% of total transactions, growing 22% year over year [8] - Active POS terminals at NRS expanded by 4,800 year over year to 37,900 [4] Management Commentary - Management emphasized the importance of higher-margin growth segments (NRS, Fintech, net2phone) in enhancing consolidated profitability [10] - The CEO highlighted the rollout of premium NRS services as a driver of recurring revenue growth [10] - In Fintech, leadership expects digital outperformance to widen due to upcoming federal excise tax on cash remittances [11] Factors Influencing Performance - Higher gross profit and margin expansion attributed to a shift towards growth segments with higher margins [12] - Fintech profitability gains supported by operating leverage and lower costs [12] Cash Flow and Guidance - Cash flow from operations was negative due to working-capital timing [13] - IDT maintained its full-year fiscal 2026 adjusted EBITDA guidance of $141 million to $145 million, implying 7%-10% growth compared to fiscal 2025 [14] Other Developments - No acquisitions or restructuring actions were announced; the company repurchased 158,000 shares for $7.6 million and declared a quarterly dividend of $0.06 per share [15]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 4% to $323 million, driven by growth in the three segments: NRS, fintech, and net2phone, which together grew by 16% [9][10] - Consolidated gross profit rose by 10% to a record $118 million, resulting in a gross margin of 37% [9][10] - Adjusted EBITDA reached a record $37.9 million, with an adjusted EBITDA margin of 11.7%, representing a 26% year-over-year growth [10][18] - Earnings per share (EPS) increased by 31% to $0.89, while non-GAAP diluted EPS climbed by 32% to $0.94 [10] Business Line Data and Key Metrics Changes - NRS reported a 22% increase in recurring revenue, reaching $35 million, with income from operations up 35% to $9 million [12] - The fintech segment's income from operations nearly doubled, increasing by 97% to $6 million, and adjusted EBITDA climbed 87% to $7.5 million [14] - Net2phone's income from operations increased by 94% to $2 million, while adjusted EBITDA rose by 44% to $3.6 million [16] Market Data and Key Metrics Changes - Boss Money's digital channel generated 84% of transactions, with revenue growth of 20% [12] - The fintech segment is benefiting from reduced transaction costs due to AI and machine learning, enhancing profitability [14] Company Strategy and Development Direction - The company is focusing on innovation and expanding premium services, which are becoming significant growth drivers [4] - There is a strategic shift from standalone products to holistic solutions tailored to customer needs, particularly in net2phone [7][15] - The company is exploring adjacent markets for growth, including food service and international markets [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth opportunities through innovation in both current and adjacent markets [4][24] - The company is monitoring the impact of new federal excise taxes on cash remittances and its effects on retail businesses [22] - IDT is well-positioned to achieve its full-year adjusted EBITDA guidance of $141-$145 million, indicating a 7%-10% growth rate [18] Other Important Information - The Delaware Supreme Court dismissed all claims against IDT in the Straight Path Class Action suit, positively impacting the company [7] - The company repurchased $7.6 million in stock during the first quarter and plans to continue opportunistic buybacks [17][18] Q&A Session Summary Question: Any special dividend or accelerated buybacks expected in the second half of the year? - Management indicated they are not looking at large M&A opportunities currently but are considering small acquisitions and monitoring the market [22] Question: Are new payment processing accounts coming from businesses that do not require a POS? - Management confirmed that new accounts are coming from businesses that require a POS [23] Question: What adjacent markets are being considered for growth? - Management mentioned various adjacent markets, including food service and specialty businesses within the U.S. [24] Question: Will IDT expand into other countries in 2026? - Management stated that while they are exploring international expansion, it is not guaranteed for 2026 [26] Question: Can you provide insights on IDT Global's top-line revenue? - Management highlighted that IDT Global has been performing well in maximizing gross profit despite fluctuations in revenue [30]

Core Insights - IDT Corporation reported strong financial results for the first quarter of fiscal year 2026, with significant growth in revenue, gross profit, and Adjusted EBITDA, driven by its National Retail Solutions (NRS) and Fintech segments [4][5][7]. Financial Performance - Consolidated revenue increased by 4% year-over-year to $322.8 million, with gross profit rising by 10% to $118.2 million, resulting in a gross margin of 36.6% [7][40]. - Adjusted EBITDA grew by 26% to $37.9 million, and net income attributable to IDT increased by 30% to $22.3 million, leading to a GAAP EPS rise from $0.68 to $0.89 [7][40]. Segment Performance National Retail Solutions (NRS) - Recurring revenue for NRS increased by 22% to $35.3 million, with income from operations up by 35% to $8.9 million and Adjusted EBITDA rising by 33% to $10.3 million [7][10]. - The segment added approximately 800 net active terminals and payment processing accounts, reflecting both seasonal and non-seasonal factors [11]. - NRS launched partnerships with DoorDash and Grubhub to enhance retail delivery options, contributing to revenue growth [12]. Fintech Segment - BOSS Money digital revenue grew by 20% to $27.9 million, with total Fintech revenue increasing by 15% to $42.7 million [7][15]. - Income from operations in the Fintech segment nearly doubled year-over-year, driven by transaction growth and improved operating leverage [6][17]. - Digital channel send volume increased by 34%, indicating strong demand for BOSS Money services [16]. net2phone - Subscription revenue for net2phone rose by 10% to $23.0 million, with income from operations increasing by 94% to $1.9 million [7][18]. - The segment introduced AI solutions to enhance customer service and operational efficiency, contributing to profitability despite increased investments in AI development [19]. Traditional Communications - Revenue for the Traditional Communications segment decreased slightly by 0.5% to $219.5 million, with income from operations up by 1% to $15.8 million [7][20]. - IDT Digital Payments showed growth, with a 90% year-over-year increase in revenue from the Zendit B2B platform [21]. Cash Flow and Capital Expenditures - Net cash used in operating activities was $10.1 million, a decline from the previous year, attributed to working capital timing [24]. - Capital expenditures increased to $5.8 million from $5.3 million in the prior year [25]. Outlook - IDT maintains its FY 2026 guidance, expecting to generate Adjusted EBITDA in the range of $141-$145 million [29]. - The company declared a quarterly cash dividend of $0.06 per share, payable on December 23, 2025 [30].