IDT CORP Q1 FY2026 earnings call

• IDT delivered consolidated revenue growth and record gross profit, adjusted EBITDA. NRS led top line expansion with 22% y-o-y recurring revenue growth. - Fintech segment income from operations and adjusted EBITDA nearly doubled aided by BOSS Money's operating leverage and AI integration. - net2phone pivoted to holistic solutions, introduced AI agent and added Coach AI solution. - Resolved Straight Path litigation with Delaware Supreme Court affirming dismissal of claims. - Tribute to Suzy Sillman who led NRS data division.

Consolidated revenue increased 4% to $323 million. NRS segment: recurring revenue climbed 22% to $35 million, income from operations up 35%, adjusted EBITDA up 33% to $10.3 million; monthly average recurring revenue per terminal increased to $313 from $295. Fintech segment: income from operations nearly doubled y-o-y, adjusted EBITDA nearly doubled, adjusted EBITDA margin climbed to 18%. net2phone: seats increased 7% to 432,000, revenue up 10% net reported and 9% constant currency, income from operations up 94%, adjusted EBITDA up 44%. Traditional Communications segment: income from operations up 1% y-o-y, adjusted EBITDA up 2% y-o-y, providing steady cash generation.

• First quarter adjusted EBITDA $37.9 million, 26% y-o-y growth. - Full year 2026 adjusted EBITDA guidance $141 million to $145 million, 7%-10% full year-over-year growth. - Will monitor Q2 performance and update guidance when reporting next quarterly results in early March.

• Risks and uncertainties discussed in SEC filings, including those affecting forward-looking statements.

Q: Congratulations on the 26% EBITDA growth and on the resolution of the Straight Path litigation. Wondering if we could expect any special dividend accelerated buybacks in the second half of the year or if M&A is the way to go for capital allocation.

A: On the M&A front, not looking at anything very large right now unless regulatory changes in the market. NRS has 1 or 2 small acquisitions in mind. Continuing to plan next big move.

Q: Another question on additions of net payment processing accounts exceeding that of the terminal accounts. Wondering if these additions are coming from businesses that do not require a POS and how relevant a percentage of businesses to revenue.

A: It's coming from ones that require a POS.

Q: On NRS adjacent markets. Wondering what those adjacent markets are.

A: Bunch of adjacent markets like food service, international markets (except Canada), various verticals like hardware stores, CBD shops, etc.

Q: In the international market comment, do you think we could see other countries added to the IDT ecosystem in '26?

A: Yes, looking at an acquisition outside the country to accelerate, definitely on the road map though not sure for '26 specifically.

Q: On IDT Global. Commented Traditional exceeding expectations, but not on record IDT global top line revenue. Could provide color there.

A: IDT Global's account managers incentivized to generate maximum gross profit. Despite minutes business decline, consistently delivered $9 million to $10 million of GP every quarter. Revenue growth in last 2 quarters is small indicator of business resilience, focus is on maximizing gross profit.