Key Earnings Metrics

IDT's fiscal 2026 results reflect a company whose revenue mix is rotating decisively toward higher-margin digital businesses. Consolidated Q4 revenue grew 7% year-over-year, accelerating from 2% full-year growth in FY2025 to 5% in FY2026, while gross profit and adjusted EBITDA reached record levels.

• NRS Q4 revenue: $45M (up 31% YoY) — Merchant Services revenue reached $28.5M and advertising/data revenue hit $10M, with adjusted EBITDA margin of 31% and a Rule of 40 score of 60, up from 49 a year earlier.
• Fintech FY26 revenue: $176M (up 14% YoY) — Q4 gross profit margin expanded 650 basis points to 66%, driven by digital channel mix shift, higher average send amounts, and improved payout partner pricing.
• BOSS Money digital channel: 88% of transaction volume — Transactions and revenue both grew 20%+ in Q4, with digital send volume up 38% as customers sent more money per transaction.
• net2phone FY26 subscription revenue: $94.6M (up 10%) — Seats reached 447,000, up 6%, with CCaaS revenue growing 24% and adjusted EBITDA margin reaching approximately 17%.
• Full-year adjusted EBITDA: $154.6M (up 17%) — Exceeded revised guidance of $150M–$152M; Traditional Communications contributed $77M, its second consecutive year of EBITDA growth.
• Balance sheet: $272M cash, zero debt — IDT repurchased approximately 422,000 shares for $21M during FY2026 and closed the year with unrestricted cash and liquid investments.

Management Commentary

CEO Shmuel Jonas emphasized that the three high-margin growth segments — NRS, Fintech, and net2phone — now contribute 53% of consolidated adjusted EBITDA while generating only one-third of total revenue. This concentration of profitability in faster-growing, higher-margin businesses is the central narrative management wants investors to track.

At NRS, Jonas highlighted new high-value retailer functionalities including the recent Uber Eats integration, following earlier Grubhub and DoorDash partnerships. These additions supplement merchant services revenue growth and contributed to a 47% year-over-year increase in NRS Q4 adjusted EBITDA. Management also noted a return to growth in advertising and data revenue, bolstered by a recent acquisition.

The BOSS Money remittance business surpassed $30M in annual transaction run rate for the first time in May, driven by strong Mother's Day digital channel performance. CFO Marcelo Fischer detailed how the new federal tax on remittances, which applies only to cash-originated transfers at retailer agents, accelerated the existing migration from retail to digital. Retailer agent channel revenue declined 17% in Q4, but every migrated customer contributes more profitable transactions.

Fischer reported that Fintech Q4 gross profit margin reached 66%, up 650 basis points, reflecting the digital mix shift, higher average send amounts, and better pricing terms from payout partners. He also noted that AI-driven process automation is being deployed throughout the Fintech segment to achieve measurable productivity gains that enhance operating leverage.

At net2phone, Jonas described how agentic AI solutions — AI Agent and Coach — combined with a new integration layer are driving nearly every customer conversation. The business is on track to surpass $100M ARR in the current quarter. Fischer noted that management budgeted a conservative EBITDA increase for net2phone in FY2027, intentionally allowing the team to reinvest in AI development.

The Traditional Communications segment again outperformed expectations, growing both revenue and adjusted EBITDA in FY2026. Fischer attributed this to SG&A reductions of nearly 6% and continued growth at IDT Digital Payments, which offset low-single-digit declines in IDT Global and BOSS Revolution Calling gross profit.

Strategic Implications

IDT's FY2027 guidance of $545M–$555M in consolidated gross profit and $176M–$180M in adjusted EBITDA reflects management's confidence that the segment rotation will continue compounding. NRS is expected to grow revenue 20–25% with EBITDA growing at a higher rate, mirroring FY2026 performance. Fintech EBITDA is projected to continue growing meaningfully as BOSS Money scales and AI automation expands.

The BOSS Money product roadmap is particularly relevant for Fintech operators. The company launched money transfers via WhatsApp, deployed a U.S. digital wallet enabling fund loading, promotion storage, and service payments, and is preparing an international launch featuring a stablecoin-backed wallet, reloadable debit card, and peer-to-peer remittances customized by country. A BOSS Money branded rechargeable card with credit-building features is also in development.

These initiatives position BOSS Money as a broader financial services platform rather than a single-product remittance app. The stablecoin-backed wallet and credit-building card, in particular, represent moves into product categories where regulatory compliance and unit economics will determine scalability.

At NRS, management acknowledged a shift in sales strategy from quantity to quality — targeting retailer locations that produce better economics rather than maximizing terminal count. Jonas indicated plans for significant sales hiring in FY2027 to expand the network while maintaining this quality-focused approach. The new KPIs introduced this quarter — retailer locations and average monthly gross profit per location — replace the prior average recurring revenue per terminal metric and align reporting with this strategy.

net2phone's AI integration strategy has both internal and external dimensions. Jonas noted that within IDT's own operations, over 70% of customer communications are now handled by AI in some form. This internal validation supports the external product narrative and provides a concrete reference point for prospective customers evaluating the platform.

The debt-free balance sheet with $272M in unrestricted cash gives IDT strategic flexibility for continued share repurchases, selective acquisitions, and product investment without requiring external financing. The FY2026 repurchase of 422,000 shares for $21M demonstrates management's willingness to return capital opportunistically.

What to Watch Next

I would watch four things over the next two quarters:

• NRS sales hiring impact — Management plans significant sales headcount expansion in FY2027. The pace of new retailer location additions and the average gross profit per location will reveal whether the quality-focused strategy scales alongside the hiring push.
• BOSS Money international launch — The stablecoin-backed wallet, reloadable debit card, and country-specific P2P remittances represent IDT's most ambitious Fintech product expansion. Early adoption metrics and regulatory milestones in initial launch markets will indicate whether the platform thesis holds.
• Fintech AI automation productivity — Management cited measurable productivity gains from AI-driven process automation but did not quantify them. Fintech segment adjusted EBITDA growth relative to revenue growth in FY2027 will show whether these gains are material enough to expand margins further.
• net2phone ARR milestone and AI monetization — The business is expected to surpass $100M ARR in the current quarter. Whether AI Agent and Coach drive incremental seat growth, higher ARPU, or reduced churn will determine whether the AI investment translates into durable revenue acceleration.

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