IDT CORP Q2 FY2026 earnings call

• NRS: Recurring revenue grew powered by merchant services and SaaS fee revenues, continuing progress on initiatives to drive growth and expand partnerships, developing offerings for differentiated retailer verticals. - Boss Money: Digital channel outperformed industry with 17% year-over-year transaction increase, tax implementation accelerated customer migration to digital channel. - NetPhone: Bottom line benefited from gross margins, operating leverage and favorable foreign exchange rates, AI offerings generating positive customer reviews and increased spend, planning new offering Agentic AI. - Traditional communications: Strong cash generator, contributed $19 million in adjusted EBITDA in Q2. - Stock repurchase and dividend: Repurchased stock in Q2, board increased annual dividend by 17% to $0.28 per year.

NRS: Recurring revenue grew year over year driven by large increases in merchant services and SaaS fee revenues, but advertising and data results were lower than expected due to decreases in CPM rates. Boss Money: Digital channel transactions increased 17% year over year, with the new federal remittance tax accelerating customer migration from lower margin retail channel to higher margin digital channel. NetPhone: Bottom line benefited from strengthening gross margins, operating leverage and favorable foreign exchange rates. Traditional communications: Contributed $19 million in adjusted EBITDA during the second quarter, a decrease from the year-ago quarter but approximately the same as in the prior two quarters.

• IDT raised consolidated adjusted EBITDA guidance for fiscal 2026 from 141 - 145 million to 147 - 149 million. - NetPhone: Second quarter adjusted EBITDA increased 37% year over year to 3.9 million, growth rate expected to moderate somewhat in the second half. - Boss Money: Fintech segment gross profit increased 15% in Q2, adjusted EBITDA increased 44% year over year, benefiting from rotation to digital channel and cost advantages. - Traditional communications: Adjusted EBITDA decline in first six months of the year was lower than expected. - NRS: Merchant services and set fee revenue outperformed, adjusted EBITDA on track to achieve 20%-25% growth for fiscal 2026 despite CPM rate softening in advertising markets.

• Forward-looking statements subject to risks and uncertainties discussed in SEC filings. - Risks related to non-GAAP adjusted measures, including reconciliation of non-GAAP measures to GAAP measures.

Q: Inigo Alonso asked about NRS monthly report, SG&A pickup, MarketSpark plan, M&A updates.

A: NRS report likely to go out soon, SG&A increase due to new product hiring, resellers, etc.; no comment on MarketSpark plan; no updates on M&A currently.

Q: William Vaughn asked about NRS single-store operator market trends, Boss Money digital transaction acceleration and competitive dynamics, capital allocation.

A: Retailer economics more affected by larger economy than immigration; Boss Money digital transaction accelerating, competitive market with strong competitors, spending more on customer acquisition; capital allocation to continue buybacks opportunistically with cash available for acquisitions