10-K: IDT Reports Strong Fiscal 2025 Growth, Profitability Surges

IDT Corporation's fiscal 2025 annual report highlights significant revenue and income growth across its fintech and communications segments, driven by strategic expansion and operational efficiencies.

Summary

• IDT Corporation reported total revenues of $1,231.5 million in fiscal 2025, an increase from $1,205.8 million in fiscal 2024.
• Consolidated income from operations surged by 55.1% to $100.4 million in fiscal 2025, up from $64.8 million in fiscal 2024.
• Net income attributable to IDT Corporation increased by 18.1% to $76.1 million in fiscal 2025, compared to $64.5 million in fiscal 2024.
• The National Retail Solutions (NRS) segment grew revenues by 24.9% to $128.8 million and increased income from operations by 28.3% to $27.8 million.
• NRS expanded its active POS terminal network to 37,200, a 15.8% increase, and payment processing accounts to 26,500, a 24.1% increase.
• The Fintech segment's revenues rose by 28.1% to $154.6 million, achieving a positive income from operations of $15.4 million, a significant improvement from a $0.1 million loss in fiscal 2024.
• BOSS Money, part of the Fintech segment, handled 2.3 million remittances in May 2025.
• The net2phone segment's revenues increased by 6.7% to $87.9 million, with income from operations soaring by 194.4% to $4.9 million, and seats served growing to 422,000.
• Traditional Communications segment revenues decreased by 4.4% to $860.2 million, but income from operations improved by 17.9% to $66.5 million, primarily due to a shift to higher-margin routes in IDT Global.
• The company initiated a quarterly cash dividend of $0.05 per share in March 2024, which was subsequently increased to $0.06 per share in March 2025.

Sentiment

Score: 8

Explanation: The company demonstrated robust financial performance in fiscal 2025, with substantial increases in consolidated income from operations and net income, driven by strong growth in its high-margin NRS, Fintech, and net2phone segments. The shift of the Fintech segment to profitability and the significant improvement in net2phone's operating income are particularly positive. The company also initiated and increased its quarterly dividend, reflecting confidence in its financial health. However, the continued decline in revenue and minutes of use in the Traditional Communications segment, along with ongoing legal and regulatory challenges and geopolitical risks, temper the overall positive outlook.

Positives

• Consolidated income from operations increased significantly by 55.1% to $100.4 million in fiscal 2025.
• Net income attributable to IDT Corporation grew by 18.1% to $76.1 million in fiscal 2025.
• Strong revenue growth in NRS (24.9%) and Fintech (28.1%) segments.
• Fintech segment achieved positive income from operations of $15.4 million in fiscal 2025, reversing a $0.1 million loss in fiscal 2024.
• net2phone segment's income from operations nearly tripled, increasing by 194.4% to $4.9 million.
• NRS expanded its active POS terminal network by 15.8% to 37,200 terminals and payment processing accounts by 24.1% to 26,500.
• Traditional Communications improved its income from operations by 17.9% to $66.5 million, despite a revenue decline, indicating effective margin management and a shift to higher-margin routes in IDT Global.
• The company initiated and subsequently increased its quarterly cash dividend, reflecting confidence in financial health and commitment to shareholder returns.
• Maintained a strong balance sheet with $253.8 million in cash, cash equivalents, debt securities, and current equity investments at July 31, 2025.
• The technology organization achieved an aggregate service uptime of approximately 99.995% in fiscal 2025, meeting or exceeding industry standards.
• The software defect escape ratio for the flagship BOSS Revolution brand was 3% in fiscal 2025, indicating high quality and effective internal defect detection.

Negatives

• Traditional Communications segment revenue declined by 4.4% in fiscal 2025, continuing a multi-year trend.
• BOSS Revolution minutes of use decreased significantly by 26.4% in fiscal 2025, impacted by market-wide trends like unlimited calling plans and OTT services.
• IDT Global minutes of use also decreased by 0.4% in fiscal 2025, reflecting ongoing industry-wide declines in paid-minute voice traffic.
• NRS segment experienced an increase in bad debt expense related to a large programmatic advertising partner.
• Fintech segment saw increased debit and credit card processing charges due to higher transaction volumes through digital channels.
• The company is involved in ongoing legal proceedings related to the Straight Path class action, with the plaintiff having filed an appeal of a previously dismissed case.
• Significant accrued expenses for FCC-related regulatory fees, totaling $21.1 million at July 31, 2025, with potential for further liabilities from sales tax contingencies.

Risks

• Changes to immigrant populations could negatively impact certain businesses, particularly Boss Money, Boss Revolution, and IDT Digital Payments.
• Cyberattacks, network disruptions, security breaches, or other significant failures of IT infrastructure could adversely affect business operations, lead to data loss, and incur significant expenses.
• The failure, or perceived failure, of one or more products due to undetected errors or defects, or customer misuse, could harm reputation and market share.
• International operations are subject to geopolitical and other risks, including ongoing developments in Belarus, Ukraine, and Israel, which could impact technology and development personnel.
• Failures in data centers or cloud services (AWS, Google Cloud) could lead to significant costs and service disruptions.
• Dependence on industry standard protocols and third-party software, including open-source software, poses risks of additional costs or service interruptions.
• Reliance on a single supplier or small group of suppliers for critical business functions could lead to service interruptions or increased costs if those suppliers become unavailable.
• Changes to rates by suppliers and increasing regulatory charges, tariffs, or excise taxes (e.g., One Big Beautiful Bill Act) may require price increases, adversely affecting competitiveness and financial results.
• Customers, particularly IDT Global wholesale customers, could experience financial difficulties, increasing the risk of uncollectible receivables.
• Inability to retain or motivate highly skilled personnel, or to hire qualified personnel, could hinder effective growth.
• New and existing technologies could affect the ability to track advertising results and/or block ads online, harming advertising-dependent businesses.
• Substantial and increasingly intense competition in the POS industry and payment space may harm NRS's business.
• A decline in advertising on the NRS platform due to macroeconomic factors or otherwise could adversely affect NRS revenues.
• NRS's long-term success depends on its ability to develop products and services to address the rapidly evolving POS market, and failure to innovate could materially affect the business.
• BOSS Money faces a complex and dynamic regulatory landscape, and non-compliance or failure to comply with laws can result in hefty fines, penalties, operational restrictions, and reputational damage.
• BOSS Money depends on a licensed network of agents for its retail money remittance business, with risks of fraudulent activities, regulatory violations, or non-payment by agents.
• Adverse fluctuations in foreign exchange rates can materially impact BOSS Money's revenue and profitability.
• Money transfer services can be vulnerable to illegal activities and fraud schemes, leading to regulatory penalties and reputational harm.
• BOSS Money's rapid growth can strain resources and internal controls, potentially leading to operational inefficiencies and increased costs.
• Less brand recognition for BOSS Money compared to larger competitors could make it harder to attract and retain customers.
• Disruptions in mobile networks or changes in consumer preferences for mobile devices could impact BOSS Money's business.
• BOSS Money relies on partnerships with global banks and payout agents, and their operational, financial, or regulatory issues could severely impact the company's ability to conduct business.
• net2phone's VoIP or cloud-based communications service competes against established, well-financed alternative providers who may offer comparable services at lower pricing or deploy new services.
• net2phone depends on the capacity, reliability, and performance of several third-party providers and their network infrastructure, the failure of which could cause service delays or interruptions.
• net2phone may not be able to scale its business efficiently or quickly enough to meet its customers' growing needs, potentially harming operating results.
• BOSS Revolution and IDT Global businesses are highly sensitive to declining demand and prices in the telecommunications industry.
• Inability to obtain sufficient or cost-effective termination capacity to particular destinations could adversely affect Traditional Communications revenues and profits.
• Termination of carrier agreements with partners or inability to enter into future agreements could materially and adversely affect the ability to compete.
• Holdings of cash, cash equivalents, debt securities, and equity investments are subject to various market risks and price volatility.
• Failure to maintain an effective system of internal control over financial reporting could lead to inaccurate financial reporting and loss of investor confidence.
• Inability to protect proprietary technology or claims of infringement of intellectual property rights of others could harm the business.
• Tax and regulatory audits could result in the imposition of liabilities that may or may not have been reserved for.
• Failure to comply with laws and regulations regarding anti-money laundering and anti-terrorist financing could have a material adverse impact.
• Non-compliance with licensing and other requirements imposed by U.S. state regulators and the U.S. federal government for money transmitters could lead to license revocation or operational restrictions.
• Actual or perceived failure to comply with governmental regulations and legal obligations related to privacy and data security (Gramm-Leach-Bliley Act, PCI DSS, CCPA, GDPR) could harm business and lead to fines or litigation.
• Taxing authorities may successfully assert that the company should have collected sales and use, value added, or similar taxes, potentially resulting in assessments and penalties.
• Certain imminent FCC Orders and rules, such as STIR/SHAKEN, could significantly impact the telecommunications marketplace and the company's operations.
• Changes to net neutrality policies could negatively affect the business by allowing broadband providers to degrade or block services.
• States adding regulations for VoIP providers could increase costs and change certain aspects of service.
• Sales to certain market segments with additional privacy or security requirements (e.g., HIPAA) increase potential liability.
• Holders of Class B common stock have significantly less voting power than holders of Class A common stock.
• Howard S. Jonas, the Chairman, controls a majority of the voting power, limiting the ability of other stockholders to affect management.

Future Outlook

The company anticipates that its high-margin growth businesses (NRS, BOSS Money, and net2phone) will continue to increase their contributions to top and bottom-line results. It plans to accelerate this rotation through organic development and strategic acquisitions, focusing on POS, fintech, and AI technologies, and expanding into new markets. Capital expenditures for fiscal 2026 are projected to be between $19 million and $21 million, funded by operating cash flows and existing liquid assets. While IDT Global's minutes of use and revenues are expected to continue declining, the company will prioritize maximizing economics over sustaining volume. net2phone Canada is slated to begin production in early fiscal 2026, and the company will adopt new accounting standards (ASU 2024-03 and ASU 2023-09) in future fiscal years.

Management Comments

• Our offerings were built around, and continue to leverage, a common core of strategic assets, and we seek to maximize the synergies among them to achieve exceptional growth and profitability.
• The development of each of our current high margin growth businesses — NRS, BOSS Money, and net2phone has been principally organic and financed with the cash flows generated by our mature businesses. Consequently, we have avoided debt financing and dilutive capital raises.
• Today, each of these high-margin growth businesses is cash-flow positive, and in combination with our efforts to maximize the cash generation of our lower margin, mature offerings, have enabled us to improve our consolidated bottom-line performance in recent years, to further strengthen our balance sheet, and to return value to stockholders through purchases of our Class B common stock and payment of a quarterly dividend.
• We expect that this trend will continue as the three high-margin businesses steadily become larger contributors to our top and bottom-line results.
• We seek to accelerate and extend this rotation by developing new offerings organically and through acquisitions that leverage our balance sheet.
• We believe that our network of NRS retailers comprises the largest POS network serving independent convenience store retailers in the U.S. by a significant margin.
• We continue to compete successfully in part by migrating customers of our other BOSS offerings from their current remittance providers to BOSS Money leveraging our highly regarded BOSS brand, insights into our customers, and cross-marketing capabilities.
• We are prepared for the implementation of STIR/SHAKEN but are concerned about its impact on the market as a whole and on us specifically.
• We believe that we will be required to report under the California legislation, and may also be subject to other states legislation, if passed.

Industry Context

IDT operates in dynamic and competitive industries. Its NRS segment targets independent retailers, differentiating itself from larger POS providers like Square and Toast that focus on chains. BOSS Money competes in the highly competitive money transfer market against established players like Western Union and digital disruptors like Wise, leveraging its existing customer ecosystem. net2phone is in the rapidly evolving UCaaS and CCaaS markets, facing competition from both legacy telecom vendors and cloud-native solutions, with AI integration becoming a key differentiator. The Traditional Communications segment, encompassing international calling and wholesale voice, continues to face secular decline due to the proliferation of unlimited mobile plans and free over-the-top (OTT) messaging and video services. The money transfer and telecommunications industries are also subject to increasing regulatory scrutiny, including anti-money laundering, data privacy, and specific telecom regulations like STIR/SHAKEN, which can impact operational costs and market dynamics.

Comparison to Industry Standards

• NRS believes its network of 37,200 POS terminals comprises the largest POS network serving independent convenience store retailers in the U.S. by a significant margin, distinguishing it from competitors like Square, Toast, Lightspeed, Clover, and NCR who primarily serve retail chains or other segments.
• NRS's software-as-a-service fees are generally well below those of newcomers and smaller competitors, providing a competitive advantage.
• BOSS Money's customer base is expanding at rates well above the domestic remittance industry's average, despite having less brand recognition compared to larger players such as Western Union, Moneygram, Ria, Xoom, Wise, and Remitly.
• net2phone's technology organization maintained an aggregate service uptime of approximately 99.995% in fiscal 2025, which meets or exceeds industry standards for SaaS and technology-enabled services.
• BOSS Revolution's policy of not charging connection, usage, or breakage fees differentiates it from certain competitors in the international long-distance calling market.
• IDT Global is positioned as one of the larger wholesale carriers of international long-distance minutes in the world, leveraging its network and proprietary software for competitive pricing and quality.

Corporate Governance

Legal Proceedings

• A class action lawsuit (JDS1, LLC vs. IDT Corporation, et al.) filed on July 5, 2017, alleging aiding and abetting breach of fiduciary duties related to the Straight Path Communications Inc. spin-off and settlement.
• The Court of Chancery of the State of Delaware dismissed all claims against the company on October 3, 2023, finding no damages.
• The plaintiff filed a notice of appeal of the Final Order and Judgment to the Supreme Court of the State of Delaware on January 14, 2025.
• The company filed its answering brief to the appeal on April 22, 2025, with oral argument scheduled for October 2025.
• In fiscal 2025, the company recorded an aggregate expense of $4.0 million related to the settlement of litigation, with $1.6 million in Corporate and $2.4 million in the NRS segment.
• Legal fees related to this action were $0.5 million in fiscal 2025 and $7.2 million in fiscal 2024, with offsetting insurance claims of nil in fiscal 2025 and $2.9 million in fiscal 2024.
• The company is subject to other legal proceedings in the ordinary course of business, which are not expected to have a material adverse effect on results of operations, cash flows, or financial condition.
• Potential sales tax contingency related to the South Dakota v. Wayfair, Inc. Supreme Court decision, which could result in tax assessments, penalties, and interest.
• Regulatory fees audit by the Universal Service Administrative Company (USAC) for the 2017 FCC Form 499-A resulted in a $2.9 million charge for the Federal Telecommunications Relay Service (TRS) Fund, which the company has appealed to the FCC.
• Accrued expenses for FCC-related regulatory fees totaled $21.1 million at July 31, 2025, and $25.9 million at July 31, 2024, covering the audited year and prior/subsequent years.

Related Party Transactions

• IDT charged Rafael Holdings, Inc. $0.3 million in fiscal 2025 for administrative and other services, with a net receivable of nil at July 31, 2025. Howard Jonas is Chairman of IDT and Vice-Chairman of Rafael.
• IDT charged Genie Energy Ltd. $0.9 million in fiscal 2025 for services, with a receivable of $0.3 million at July 31, 2025. Howard Jonas is Chairman of Genie.
• IDT provided legal services to Zedge, Inc. for $126,000 in fiscal 2025 and paid Zedge $86,000 for consulting services. NRS received $0.2 million from a marketing relationship with Zedge in fiscal 2025. Howard Jonas is a director and vice chairman of Zedge, and his son, Michael Jonas, is chairman and controlling stockholder.
• NRS billed CTM Media Group $0.5 million for a marketing relationship in fiscal 2025, with CTM owing NRS $0.5 million at July 31, 2025. Howard Jonas is the owner of CTM.
• IDT provides office space, connectivity, and other services to Jonas Media Group (owned by Howard Jonas), with billings of $1,180 in fiscal 2025 and a balance owed of $6,461 at July 31, 2025.
• Mason and Company Consulting, LLC (owned by Jonathan Mason, husband of Joyce J. Mason, IDT's General Counsel, and brother-in-law of Howard S. Jonas) received $54,000 in commissions and fees from IDT payments in fiscal 2025 for insurance brokerage referral.
• In April 2025, IDT exchanged 127,500 shares of NRS for 7,685 shares of IDT Class B Common Stock (valued at $395,250) with Alexander Mason, son of Joyce Mason.
• IDT Domestic Telecom, Inc. leases office space in a building jointly owned by Howard S. Jonas and Shmuel Jonas, with an annual rent of $18,600.
• Loans receivable from employees aggregated $0.4 million at July 31, 2025.

Stakeholder Impact

• Shareholders: Positive impact from increased profitability, initiation and increase of quarterly dividends, and ongoing stock repurchase program. Potential negative impact due to concentrated voting power held by Howard S. Jonas.
• Customers: Benefit from new AI-powered communication solutions (net2phone), expanded POS network and services (NRS), and a growing, more convenient money transfer network (BOSS Money). Risks include potential service disruptions, price changes, and regulatory non-compliance affecting service availability or cost.
• Employees: Positive impact from equity incentive plans, 401(k) plan with discretionary matching contributions, and a stated employee-friendly culture. Potential risks for technology and development personnel due to geopolitical instability in regions like Belarus.
• Retailers/Agents: NRS POS network and BOSS Money/BOSS Revolution agent networks are critical distribution channels, offering them enhanced tools and services. Risks include stricter bank restrictions on money remittance retailers and intense competition.
• Suppliers/Partners: Continued reliance on third-party providers for network infrastructure and software, creating mutual dependencies. Risks if these partners face operational or financial difficulties, or if terms of agreements change.

Next Steps

• Accelerate and extend business rotation by developing new offerings organically and through acquisitions, focusing on POS, fintech, and AI.
• NRS plans to expand its POS terminal network into new retail verticals, subsidize POS hardware, convert existing NRS terminal customers to NRS Pay, increase advertising integrations, develop home delivery options, and build digital wholesale supply channels.
• BOSS Money aims to expand its international payout network (Latin America, Africa, Asia), continue migrating BOSS Revolution and IDT Digital Payments customers, enhance its apps, increase retail agents, and add new features like a wallet.
• net2phone intends to further develop and distribute its AI Agent and Coach offerings, refine its AI agent for industry-specific variants, expand AI-powered functionalities in UCaaS, introduce burstable line capacity, and integrate WhatsApp for Mexico/Brazil UCaaS customers.
• net2phone will focus on upselling premium plan tiers and expanding partnerships with Managed Service Providers (MSPs) and resellers, as well as selectively pursuing acquisitions and strategic investments.
• The company anticipates total capital expenditures in fiscal 2026 to be between $19 million and $21 million.
• Oral argument for the appeal in the Straight Path class action lawsuit is scheduled for October 2025.
• net2phone Canada is slated to go into production early in fiscal 2026.
• The Board of Directors approved an amendment to the 2024 Equity Incentive Plan to increase shares available for awards by an additional 175,000, subject to stockholder approval at the annual meeting in December 2025.
• The company will adopt ASU 2024-03 (Expense Disaggregation Disclosures) for its fiscal year beginning August 1, 2027.
• The company will adopt ASU 2023-09 (Improvements to Income Tax Disclosures) for its fiscal year ended 2026.

Key Dates

Recommendation

IDT Corporation demonstrates strong financial momentum with significant increases in consolidated income from operations and net income in fiscal 2025. The company's strategic pivot towards high-margin fintech (BOSS Money) and cloud communications (net2phone) is yielding substantial results, with both segments showing impressive growth and profitability. The NRS segment continues its robust expansion, solidifying its market position. While the Traditional Communications segment faces secular declines, its improved operating income indicates effective management of mature assets. The initiation and subsequent increase of quarterly dividends signal management's confidence and commitment to shareholder returns. The company's strong balance sheet and organic growth strategy, avoiding dilutive capital raises, further enhance its investment appeal. Despite ongoing legal and regulatory risks, the overall trajectory of growth in key strategic areas and improved financial health makes IDT Corporation an attractive 'buy' for long-term investors.

Keywords

Fintech, Communications, POS, Money Transfer, UCaaS, CCaaS, AI, Digital Payments, Wholesale Telecom, International Calling, SEC Filing, 10-K, IDT Corporation, NRS, BOSS Money, net2phone, BOSS Revolution, IDT Global