IDT's Fourth-Quarter Growth Accelerates After a Slower Third
Revenue reached $339.0 million and Adjusted EBITDA $41.2 million as National Retail Solutions posted a 60 Rule-of-40 score.
IDT Corporation (IDT), a global provider of fintech, communications, and AI-powered customer experience solutions, reported fourth-quarter revenue of $339.0 million, up 7% from a year earlier, after a 5% year-over-year increase in the third quarter.
Gross profit rose 18% to $134.8 million, and gross margin expanded 360 basis points to 39.8%, after a 9% gross-profit increase and 170 basis points of margin expansion in the prior quarter. Income from operations rose 52% to $33.2 million. Adjusted EBITDA rose 22% to $41.2 million. GAAP earnings were $0.87 a share, up from $0.67. Non-GAAP earnings were $0.94 a share.
Chief Executive Shmuel Jonas said the quarter capped a fiscal year in which the three higher-margin growth segments each increased their contributions.
National Retail Solutions was the sharpest turn. NRS revenue rose 31% to $45.0 million, after $38.0 million in the third quarter. Income from operations rose 105% to $12.0 million, and Adjusted EBITDA rose 47% to $14.0 million, after third-quarter operating income of $8.2 million and Adjusted EBITDA of $9.8 million. The quarter’s Rule of 40 score was 60.
Merchant Services and Other revenue rose 31% to $28.5 million. Advertising and Data revenue rose 49% to $10.1 million, after $5.7 million in the third quarter. Jonas said Advertising and Data returned to growth, bolstered by a recent acquisition, and that Merchant Services gains were supplemented by new retailer functionalities, including an Uber Eats integration following DoorDash and Grubhub partnerships.
Retailer locations stood at 35,400. Average monthly gross profit per location rose 22% to $383 from $315 a year earlier, primarily reflecting growth in NRS Pay.
The Fintech segment, which includes BOSS Money, posted revenue of $47.1 million. BOSS Money digital revenue rose 22% to $33.7 million. Retail-channel BOSS Money revenue fell 17% to $8.7 million. Digital transactions rose 20% to 6.6 million, and digital share of total transactions rose 480 basis points to 88.1%. Fintech gross profit margin expanded 650 basis points to 65.6%. Income from operations rose 15% to $5.5 million, and Adjusted EBITDA rose 17% to $6.5 million. The mix shift to higher-margin digital transactions, higher average send amounts, and more favorable payout terms drove the margin expansion, and a federal tax on retail remittances beginning January 1, 2026, accelerated the migration.
Jonas said remittances surpassed a 30 million annual transaction run-rate for the first time in May and that the digital channel contributed 88% of total transaction volume.
net2phone subscription revenue rose 10% to $24.5 million. Income from operations rose 75% to $2.6 million, and Adjusted EBITDA rose 26% to $4.4 million. The profitability gains reflected operating leverage and incremental contributions from AI-powered offerings, including an integration layer introduced in the quarter. Jonas said net2phone is on track to surpass a $100 million annual recurring revenue milestone in the current quarter and expects continued topline expansion throughout fiscal 2027.
Traditional Communications revenue rose 2% to $222.0 million. Adjusted EBITDA rose 12% to $19.9 million. Within the segment, IDT Digital Payments revenue rose 6% to $113.9 million, and BOSS Revolution revenue fell 10% to $44.2 million.
Corporate Adjusted EBITDA was ($3.5) million. Unrestricted cash, cash equivalents, debt securities, and current equity investments were $271.9 million as of July 31, 2026. The company had no outstanding debt. Net cash provided by operating activities was $44.4 million. Adjusted operating cash flow excluding customer funds deposits was $26.4 million. IDT repurchased 30,752 Class B shares for about $2.0 million.
For fiscal 2027, IDT expects consolidated gross profit of $545 million to $555 million and Adjusted EBITDA of $176 million to $180 million, versus fiscal 2026 Adjusted EBITDA of $154.6 million. The board declared a quarterly cash dividend of $0.07 a share, payable October 14, 2026.