IDT Q4 FY26 earnings call IDT

IDT's financial performance is increasingly driven by its NRS, Fintech, and net2phone segments, which collectively contributed 53% of consolidated adjusted EBITDA in fiscal year 2026, up from 46% in fiscal year 2025. These higher-margin growth businesses generated only one-third of the company's consolidated revenue, indicating significant operating leverage. Management expects this ongoing rotation to continue, driving sustained growth and profitability in the coming quarters^⏳ and years.

The NRS segment closed fiscal year 2026 with its strongest quarter, reporting a 31% year-over-year increase in total revenue to $45 million and a 47% increase in adjusted EBITDA, achieving a 31% adjusted EBITDA margin. Merchant Services revenue grew 31% to $28.5 million, while advertising and data revenue surged 49% to $10 million, partly bolstered by a recent acquisition. The company is focusing on attracting higher-volume retailers and plans to invest more in sales to accelerate network growth, while also developing new product functionalities like the Uber Eats integration to increase sales to the existing retailer base.

BOSS Money remittances surpassed a $30 million annual transaction run rate for the first time in May, driven by strong Mother's Day results. The digital channel contributed 88% of total transaction volume in Q4, with transactions and revenue increasing by over 20% and 22% respectively, and digital send volume growing 38%. Recent launches include money transfers via WhatsApp and a U.S. digital wallet. The BOSS Money app is also expanding internationally with differentiated features, including peer-to-peer remittances, stablecoin-backed wallets with reloadable debit cards, and a new rechargeable card with credit-building features, marking early steps towards a broader suite of global financial services.

net2phone delivered another solid quarter, enhancing its cloud communications portfolio with native and stand-alone AI solutions like AI Agent and Coach. These agentic AI solutions, combined with a new integration layer, enable customers to connect business applications with net2phone's services, driving new logo acquisition and accelerating accretive sales. The segment is on track to surpass the $100 million ARR milestone in Q1 FY27 and anticipates continued top-line expansion throughout fiscal year 2027. Q4 subscription revenue increased 10% year-over-year (7% on a constant currency basis), and adjusted EBITDA margins reached approximately 17% for the full year.

The Traditional Communications segment once again outperformed expectations, growing both revenue and adjusted EBITDA in fiscal year 2026 for the second consecutive year. Full-year adjusted EBITDA increased 1% to $77 million, primarily due to a nearly 6% reduction in SG&A expenses compared to FY25, which compensated for a 4% decline in gross profit to $163 million. The segment continues to benefit from top-line growth at IDT Digital Payments, offsetting low single-digit declines in IDT Global and BOSS Revolution Calling, and is expected to remain a reliable contributor to cash generation.

IDT ended fiscal year 2026 with a robust financial position, holding $272 million in unrestricted cash and liquid investments and carrying no debt. The company continued its opportunistic share repurchase program, buying back approximately 31,000 shares in the fourth quarter and a total of 422,000 shares for $21 million over the course of fiscal year 2026. This strong balance sheet and increasing cash generation afford IDT strategic flexibility as it enters the new fiscal year with significant momentum.