IDT Highlights Growth Engines, Delays net2phone Spin-Off Until Markets Improve

IDT Highlights Growth Engines, Delays net2phone Spin-Off Until Markets Improve

IDT’s higher-margin growth businesses are expanding: National Retail Solutions, BOSS Money and net2phone now generate about one-third of revenue and two-thirds of gross profit.

Together, they grew revenue 17% year over year in the latest quarter.

Key operating metrics improved: NRS reached $141 million in trailing-12-month recurring revenue, BOSS Money benefited from accelerating digital remittances, and net2phone posted record 17% adjusted EBITDA margins after subscription revenue rose 12% year over year.

The net2phone spin-off remains delayed: IDT wants the business to achieve greater scale and is waiting for more favorable capital-market conditions before pursuing a separation.

IDT ended the quarter with $251 million in cash and no debt, while consolidated adjusted EBITDA rose 13% to $37.5 million.

IDT NYSE: IDT highlighted the expanding contribution of its higher-margin growth businesses during a company presentation, while executives said the company intends to wait for larger business scale and more favorable capital-market conditions before reconsidering a potential net2phone spin-off.

Bill Ulrey, IDT’s vice president of investor relations and external affairs, said the company’s fiscal year ends July 31 and that the presentation covered the third quarter of fiscal 2026, ended April 30.

IDT expects to report fourth-quarter and full-year results in the last week of September.

As of April 30, IDT had $251 million of cash and no debt, Ulrey said.

Over the trailing 12 months, the company generated $1.3 billion of revenue and $147 million of adjusted EBITDA.

Share repurchases and quarterly dividends totaled $26 million over that period, according to the presentation.

IDT operates six primary businesses, with management emphasizing three higher-margin growth operations: National Retail Solutions, BOSS Money and net2phone.

These businesses collectively account for about one-third of revenue and two-thirds of gross profit, Ulrey said.

The company’s traditional communications operations continue to provide cash flow that has supported the development of those growth businesses.

National Retail Solutions expands recurring revenue

National Retail Solutions, or NRS, provides point-of-sale technology to independent retailers including bodegas, convenience stores, liquor stores and tobacco shops.

The business operated about 40,000 POS terminals across 34,000 retail locations at the end of the quarter.

NRS generated $36 million in recurring revenue in the most recent quarter, excluding hardware sales.

Merchant services accounted for more than two-thirds of that total, while advertising and data sales contributed 16% and software subscription charges represented 12%.

Ulrey said NRS estimates its U.S. addressable market at roughly 200,000 convenience stores, bodegas, independent liquor stores and tobacco shops, putting its current market penetration near 20%.

Annual recurring revenue increased from $45 million in 2022 to $141 million over the trailing 12 months.

Average monthly revenue per terminal rose to $307 in the latest quarter from $279 a year earlier.

NRS generated more than $41 million of trailing-12-month adjusted EBITDA, representing a 28% margin, and recorded a “rule of 40” score of 50% in the latest quarter, Ulrey said.

BOSS Money benefits from digital remittance growth

BOSS Money, IDT’s international remittance offering within its Fintech segment, serves primarily first- and second-generation immigrants in the U.S. and Canada sending money to family and friends abroad.

Nearly 90% of transfers now originate through the BOSS Money or BOSS Revolution Calling apps, according to Ulrey.

Digital-channel revenue increased 2...