IDT Corporation — FY2026 Form 10-K
Reporting period: Fiscal year ended July 31, 2026; comparisons are primarily with FY2025. IDT provides fintech and communications services through four reportable segments: NRS, Fintech, net2phone, and Traditional Communications.
Financial performance and liquidity
| Metric | FY2026 | FY2025 | Change |
|---|
| Revenue | $1,298.0 million | $1,231.5 million | +5.4% |
| Gross profit / margin | $496.8 million / 38.3% | $446.2 million / 36.2% | Margin +2.1 percentage points |
| Operating income / margin | $121.2 million / 9.3% | $100.4 million / 8.2% | +20.7% |
| Net income | $95.1 million | $81.1 million | +17.2% |
| Net income attributable to IDT | $86.6 million | $76.1 million | +13.8% |
| Diluted EPS | $3.46 | $3.01 | +15.0% |
| Cash from operating activities | $91.1 million | $127.1 million | Down $36.0 million |
- Operating cash flow less capital expenditures was approximately $68.0 million, versus $106.3 million in FY2025. The decline chiefly reflected a $75.1 million cash use from changes in settlement assets and disbursement prefunding, amid higher BOSS Money activity.
- At July 31, 2026, cash and cash equivalents were $220.7 million; cash, cash equivalents, debt securities, and current equity investments totaled $271.9 million, excluding restricted cash. Working capital was $303.5 million. Restricted cash was an additional $138.7 million, principally held for regulated or customer-related purposes.
- IDT reported no borrowings under its revolving credit facility at fiscal year-end. The facility was amended after year-end, effective August 11, 2026, extending maturity to July 2029 and increasing seasonal availability to $50 million in May and December from $25 million otherwise. The company reported covenant compliance.
- FY2026 capital expenditures were $23.1 million. Management expects FY2027 capital expenditures of $22.5–$23.5 million and states existing cash resources and operating cash flow should cover anticipated working capital and capital needs through July 31, 2027.
Segments and material year-over-year changes
| Segment | FY2026 revenue | FY2025 revenue | FY2026 operating income |
|---|
| NRS | $159.4 million | $128.8 million | $39.3 million |
| Fintech | $176.0 million | $154.6 million | $21.5 million |
| net2phone | $96.6 million | $87.9 million | $9.1 million |
| Traditional Communications | $865.9 million | $860.2 million | $63.4 million |
- NRS: Revenue rose 23.8% and operating income 41.6%. Recurring revenue increased 23.9% and represented about 95% of segment revenue. Active terminals grew 8.7% to 40,400 and payment-processing accounts grew 10.9% to 29,400. Higher revenue per terminal and payment-processing growth supported margins; advertising and data revenue declined amid lower industry CPMs and the loss of a demand partner. Retailer churn and competitive pressure moderated net additions.
- Fintech: Revenue rose 13.8% and operating income 39.5%. BOSS Money revenue increased 12.0%, supported by digital transaction growth and cross-marketing. Greater digital mix improved gross margin to 62.3% from 58.7%.
- net2phone: Revenue increased 10.0% and operating income 83.9%. Subscription revenue grew 10.7%; seats served reached 447,000, up 5.9%. Growth included CCaaS and newly introduced AI Agent and Coach offerings; gross margin increased to 80.6% from 79.3%.
- Traditional Communications: Revenue increased 0.7%, but operating income fell 4.7% and gross margin declined to 18.8% from 19.6%. IDT Digital Payments revenue rose 3.1% and IDT Global revenue rose 10.5%, offsetting a 14.6% decline in BOSS Revolution revenue. BOSS Revolution minutes fell 24.1%, while IDT Global minutes rose 8.7%.
Outlook, risks, and unusual items
- No quantified consolidated revenue or earnings guidance is provided. Management’s stated outlook emphasizes expanding NRS, BOSS Money, and net2phone, using AI in products and operations, and funding growth through cash generation and selective acquisitions.
- Management cites a 1% U.S. excise tax, effective January 1, 2026, on certain cash- or money-order-funded remittances. Digital transfers funded by card or ACH are exempt; IDT reports migration toward digital channels and accelerated digital growth after the tax took effect.
- Key risks include increased immigration enforcement potentially reducing customer populations or remittance activity; intense competition and continued substitution from free or unlimited calling services; NRS retailer churn, payment-network compliance and advertising-market weakness; foreign-exchange and counterparty exposure; and evolving financial-services, telecom, privacy, cybersecurity, and AI regulation.
- NRS acquired an 80% controlling interest in OnCore Digital in May 2026 for approximately $4.8 million in consideration, plus $0.1 million of assumed liabilities. The acquisition’s reported revenue and earnings contribution through year-end was not material. IDT expects integration to support NRS advertising monetization, but notes execution and integration risks.
- Stock-based compensation rose to $10.5 million from $3.1 million, largely due to deferred stock unit grants and their vesting schedule. Other income included $3.4 million in investment gains; the effective income-tax rate was 26.8%.
- Purchase commitments totaled $10.4 million. Separately disclosed exposures include $25.6 million in performance bonds, possible redemption of up to $10 million of NRS shares during a post-anniversary window, and up to $2.5 million of potential acquisition contingent consideration; timing or amounts are uncertain. The Straight Path class action was dismissed and the dismissal affirmed on appeal. A $2.9 million Universal Service Fund/TRS charge remains under appeal; IDT says it does not intend to pay unless the appeal is unsuccessful.
- Grant Thornton issued unqualified opinions on the financial statements and internal control over financial reporting; no critical audit matters were identified. Management also concluded disclosure controls and internal controls were effective as of July 31, 2026.
Investor facts to verify
- Whether FY2027 cash generation can recover from the working-capital demands of BOSS Money settlement and prefunding activity.
- Whether NRS can reduce churn and sustain terminal and payment-account growth while improving advertising revenue and integrating OnCore.
- Whether digital remittance growth offsets possible effects of immigration policy and the remittance excise tax, and whether BOSS Revolution’s declines continue.
- How quickly net2phone’s AI offerings gain paying customers, and whether growth supports sustained operating-margin improvement.
- Current borrowing availability and covenant terms under the amended credit facility; also monitor the USAC appeal, potential NRS share redemption, and other contingent obligations.
- Capital returns: IDT repurchased $21.0 million of shares in FY2026 and paid $6.5 million in dividends; the quarterly dividend was raised to $0.07 per share in May 2026. These distributions remain subject to board discretion.
