IDT Corporation Reports Record Second Quarter 2025 Results

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Record levels of gross profit +16%; income from operations +77%; Adjusted EBITDA^* +56%

GAAP EPS increased to $0.80 from $0.57; Non-GAAP EPS^* increased to $0.84 from $0.67

IDT raised its quarterly dividend 20% to 6 cents

NEWARK, NJ, March 06, 2025 (GLOBE NEWSWIRE) -- IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications solutions, today reported results for its second quarter fiscal year 2025, the three months ended January 31, 2025.

SECOND QUARTER HIGHLIGHTS

(Throughout this release, unless otherwise noted, results for the second quarter of fiscal year 2025 (2Q25) are compared to the second quarter of fiscal year 2024 (2Q24). All earnings per share (EPS) and other 'per share' results are per diluted share.

• Key Businesses / Segments
  • NRS
    • Recurring revenue^**: +32% to $31.6 million;
    • Income from operations: +71% to $9.1 million;
    • Adjusted EBITDA: +65% to $10.1 million;
    • 'Rule of 40' score**: 55
  • BOSS Money / Fintech segment
    • BOSS Money transactions: +36% to 5.7 million;
    • BOSS Money revenue: +34% to $33.5 million;
    • Fintech segment gross profit: +35% to $21.7 million;
    • Fintech segment income from operations: increased to $3.1 million from a loss of $(0.7) million;
    • Fintech segment Adjusted EBITDA: increased to $3.9 million from a loss of $(12) thousand;
  • net2phone
    • Subscription revenue^**: +9% to $21.0 million (+14% on a constant currency basis);
    • Income from operations: increased to $1.1 million from $0.4 million;
    • Adjusted EBITDA: +55% to $2.9 million;
  • Traditional Communications
    • Gross profit: +2% to $43.1 million;
    • Income from operations: +24% to $18.1 million;
    • Adjusted EBITDA: +19% to $20.2 million;
• IDT Consolidated
  • Revenue: +2% to $303.3 million;
  • Gross profit (GP) / margin: GP +16% to $112 million; GP margin +420 bps to 37.0%;
  • Income from operations: +77% to $28.3 million;
  • Net income attributable to IDT: +41% to $20.3 million;
  • GAAP EPS: Increased to $0.80 from $0.57;
  • Non-GAAP net income: +26% to $21.3 million;
  • Non-GAAP EPS: Increased to $0.84 from $0.67;
  • Adjusted EBITDA: +56% to $34.0 million;
  • CapEx: +6% to $4.8 million;
  • Stock buyback: Repurchased 179,338 shares of IDT Class B common stock in market transactions during 2Q25 for $8.5 million at an average share price of $47.59;
  • Common stock dividend: IDT increased its quarterly dividend from $0.05 to $0.06.

REMARKS BY SHMUEL JONAS, CEO

"IDT had a strong second quarter led by NRS and BOSS Money, and supported by robust results from our Traditional Communications segment, which increased its cash generation for the third consecutive quarter. On a consolidated basis, we again generated record levels of gross profit, income from operations, and Adjusted EBITDA.

"NRS continued to deepen its penetration of the independent retailer market. We are now launching new features and functionalities that increase the value of our solution for retailers and will help us to drive additional growth.

"BOSS Money delivered another quarter of strong year-over-year transaction and revenue growth. In the second quarter, we continued to focus on improving the margin contribution, particularly in our retail channel, and that effort helped to boost our Fintech segment's gross profit and Adjusted EBITDA less CapEx to record levels.

"net2phone continued its expansion led by further growth in the U.S. market. We are especially excited about last week's launch of net2phone's virtual AI agent. It has been very well received by our internal BOSS and NRS teams that are using it with great success to enhance the quality and consistency of customer interactions while reducing costs. We are confident that net2phone clients will find that it provides them with great value right out of the gate. Moreover, as they build with our AI agent, it will provide clients with increasingly sophisticated, tailored solutions that add value across disparate functions within their organizations.

"Our Traditional Communications segment increased Adjusted EBITDA for the third sequential quarter and surpassed $20 million for the first time since fiscal 2022.

"In light of our solid financial position and positive outlook, and mindful of the feedback we've received from our investors, we stepped up our repurchases of stock during the second quarter and have increased our regular quarterly dividend by 20%.”

2Q25 RESULTS BY SEGMENT

(For all periods presented, capital expenditures (CapEx), previously provided on a consolidated basis, is now also provided for each business segment.)

National Retail Solutions (NRS)

NRS Take-Aways / Updates:

• NRS added approximately 1,700 net active terminals and approximately 1,200 net payment processing accounts during 2Q25. Net active terminal additions included the impact of approximately 300 terminals operating in seasonal stores that suspended operations following the quarter close.
• The 45% year-over-year increase in Merchant Services & Other revenue was driven by the growth in payment processing accounts, and higher merchant services revenue per account, driven in part by the increased percentage of retail transactions paid with a credit or debit card.
• The 30% year-over-year increase in SaaS Fees revenue reflects the growth of net active terminals and migration of retailers to premium SaaS plans.

Fintech

Fintech Take-Aways:

• The 36% increase in BOSS Money transactions reflected a 40% year-over-year increase in digital transactions and a 22% increase in retail transactions.
• BOSS Money revenue increased 34% year-over-year driven by a 38% year-over-year increase in digital channel revenue. The 1% sequential decrease in revenue reflected BOSS Money's continued focus on expanding per-transaction margins, particularly at retail, which boosted gross profit while dampening transaction volume growth and revenue.
• The strong increases in the Fintech segment's income from operations and Adjusted EBITDA were driven by BOSS Money revenue growth, higher margins on BOSS Money transactions and improved operating leverage as the business continues to scale.
• BOSS Money continued to expand to new destinations during 2Q25 (Venezuela and Eritrea) with Brazil expected to come online in 3Q25. BOSS Money also launched debit card payment capabilities at BOSS Money retailers across the U.S. and continued to build out its already extensive payout network in key destination markets.

net2phone

net2phone Take-Aways:

• The 9% year over year increase in total seats served was powered by continued expansion in key markets led by the U.S., Brazil, and Mexico. CCaaS seats served increased by 10% year-over year.
• Subscription revenue increased by 9% year-over-year. The increase reflected net seat growth and increased subscription revenue per seat^** in the U.S., offset by the negative FX impact of a strengthened U.S. dollar versus local currencies in net2phone's key Latin American markets. On a constant currency basis, subscription revenue increased by 14% year over year.
• Operating margin^** increased to 5% from 2% in 2Q24, and Adjusted EBITDA margin^** increased to 13% from 9% in 2Q24. Additional steady margin improvement remains a key strategic focus.
• Following the quarter close, net2phone launched its AI agent, a scalable virtual assistant providing exceptional customer experiences across sales, support, and administrative tasks.

Traditional Communications