IDTの四半期報告

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-16371

IDT CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware		22-3415036
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

520 Broad Street, Newark, New Jersey		07102
(Address of principal executive offices)		(Zip Code)

(973) 438-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Class B common stock, par value $.01 per share		New York Stock Exchange

Trading symbol: IDT

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

As of March 6, 2025, the registrant had the following shares outstanding:

Class A common stock, $.01 par value:		1,574,326 shares outstanding (excluding 1,698,000 treasury shares)
Class B common stock, $.01 par value:		23,641,467 shares outstanding (excluding 4,868,887 treasury shares)

IDT CORPORATION

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION			3

	Item 1.	Financial Statements (Unaudited)	3

		Consolidated Balance Sheets	3

		Consolidated Statements of Income	4

		Consolidated Statements of Comprehensive Income	5

		Consolidated Statements of Equity	6

		Consolidated Statements of Cash Flows	8

		Notes to Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

	Item 3.	Quantitative and Qualitative Disclosures About Market Risks	34

	Item 4.	Controls and Procedures	34

PART II. OTHER INFORMATION			35

	Item 1.	Legal Proceedings	35

	Item 1A.	Risk Factors	35

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

	Item 3.	Defaults Upon Senior Securities	35

	Item 4.	Mine Safety Disclosures	35

	Item 5.	Other Information	35

	Item 6.	Exhibits	35

SIGNATURES			36

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

IDT CORPORATION

CONSOLIDATED BALANCE SHEETS

	(Unaudited)			(Note 1)
	January 31, 2025			July 31, 2024
	(Unaudited)			(Note 1)
	(in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	142,152		$	164,557
Restricted cash and cash equivalents		105,554			90,899
Debt securities		23,852			23,438
Equity investments		5,091			5,009
Trade accounts receivable, net of allowance for credit losses of $7,295 at January 31, 2025 and $6,352 at July 31, 2024		45,127			42,215
Settlement assets, net of reserve of $1,804 at January 31, 2025 and $1,866 at July 31, 2024		41,779			22,186
Disbursement prefunding		57,676			30,736
Prepaid expenses		15,989			17,558
Other current assets		24,914			25,927

Total current assets		462,134			422,525
Property, plant, and equipment, net		38,380			38,652
Goodwill		26,149			26,288
Other intangibles, net		5,583			6,285
Equity investments		6,748			6,518
Operating lease right-of-use assets		2,498			3,273
Deferred income tax assets, net		22,333			35,008
Other assets		11,903			11,546

Total assets	$	575,728		$	550,095

Liabilities, redeemable noncontrolling interest, and equity
Current liabilities:
Trade accounts payable	$	22,482		$	24,773
Accrued expenses		89,472			103,176
Deferred revenue		28,384			30,364
Customer funds deposits		104,720			91,893
Settlement liabilities		16,975			12,764
Other current liabilities		16,157			16,374

Total current liabilities		278,190			279,344
Operating lease liabilities		1,349			1,533
Other liabilities		1,093			2,662

Total liabilities		280,632			283,539
Commitments and contingencies		-			-
Redeemable noncontrolling interest		11,228			10,901
Equity:
IDT Corporation stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued		—			—
Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and 1,574 shares outstanding at January 31, 2025 and July 31, 2024		33			33
Class B common stock, $.01 par value; authorized shares—200,000; 28,233 and 28,177 shares issued and 23,491 and 23,684 shares outstanding at January 31, 2025 and July 31, 2024, respectively		282			282
Common stock		282			282
Additional paid-in capital		306,781			303,510
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 4,742 and 4,493 shares of Class B common stock at January 31, 2025 and July 31, 2024, respectively		(137,475	)		(126,080	)
Accumulated other comprehensive loss		(19,599	)		(18,142	)
Retained earnings		121,573			86,580

Total IDT Corporation stockholders’ equity		271,595			246,183
Noncontrolling interests		12,273			9,472

Total equity		283,868			255,655

Total liabilities, redeemable noncontrolling interest, and equity	$	575,728		$	550,095

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	2025			2024			2025			2024
	Three Months Ended January 31,						Six Months Ended January 31,
	2025			2024			2025			2024
	(in thousands, except per share data)

Revenues	$	303,349		$	296,098		$	612,915		$	597,302
Direct cost of revenues		191,239			199,171			393,178			406,382

Gross profit		112,110			96,927			219,737			190,920
Operating expenses (gain):
Selling, general and administrative (i)		70,721			67,346			141,772			131,723
Technology and development (i)		12,612			12,925			25,372			25,335
Severance		233			345			410			869
Other operating expense (gain), net (see Note 10)		227			294			227			(190	)

Total operating expenses		83,793			80,910			167,781			157,737

Income from operations		28,317			16,017			51,956			33,183
Interest income, net		1,354			1,195			2,782			2,039
Other income (expense), net		207			2,534			(76	)		(3,053	)

Income before income taxes		29,878			19,746			54,662			32,169
Provision for income taxes		(7,665	)		(3,992	)		(13,967	)		(7,939	)

Net income		22,213			15,754			40,695			24,230
Net income attributable to noncontrolling interests		(1,944	)		(1,329	)		(3,178	)		(2,146	)

Net income attributable to IDT Corporation	$	20,269		$	14,425		$	37,517		$	22,084

Earnings per share attributable to IDT Corporation common stockholders:
Basic	$	0.81		$	0.57		$	1.49		$	0.88
Diluted	$	0.80		$	0.57		$	1.48		$	0.87

Weighted-average number of shares used in calculation of earnings per share:
Basic		25,161			25,175			25,182			25,176
Diluted		25,324			25,317			25,343			25,297

(i) Stock-based compensation included in:

Selling, general and administrative expense	$	768		$	2,357		$	1,602		$	2,998
Technology and development expense	$	95		$	130		$	172		$	260

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	2025			2024			2025			2024
	Three Months Ended January 31,						Six Months Ended January 31,
	2025			2024			2025			2024
	(in thousands)
Net income	$	22,213		$	15,754		$	40,695		$	24,230
Other comprehensive income (loss):
Change in unrealized loss on available-for-sale securities		16			270			72			204
Foreign currency translation adjustments		94			(919	)		(1,529	)		(288	)

Other comprehensive income (loss)		110			(649	)		(1,457	)		(84	)

Comprehensive income		22,323			15,105			39,238			24,146
Comprehensive income attributable to noncontrolling interests		(1,944	)		(1,329	)		(3,178	)		(2,146	)

Comprehensive income attributable to IDT Corporation	$	20,379		$	13,776		$	36,060		$	22,000

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interests			Total Equity
	Three Months Ended January 31, 2025 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interests			Total Equity
BALANCE AT OCTOBER 31, 2024	$	33	$	282	$	305,918	$	(128,512	)	$	(19,709	)	$	102,568		$	10,568		$	271,148
Dividends declared ($0.05 per share)		—		—		—		—			—			(1,264	)		—			(1,264	)
Exercise of stock options
Repurchases of Class B common stock through repurchase program		—		—		—		(8,534	)		—			—			—			(8,534	)
Restricted Class B common stock purchased from employees		—		—		—		(429	)		—			—			—			(429	)
Restricted net2phone common stock purchased from employees
Exchange of National Retail Solutions shares for Class B common stock
Stock-based compensation		—		—		863		—			—			—			—			863
Distributions to noncontrolling interests		—		—		—		—			—			—			(50	)		(50	)
Other comprehensive income		—		—		—		—			110			—			—			110
Net income		—		—		—		—			—			20,269			1,755			22,024
BALANCE AT JANUARY 31, 2025	$	33	$	282	$	306,781	$	(137,475	)	$	(19,599	)	$	121,573		$	12,273		$	283,868

	Six Months Ended January 31, 2025 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interests			Total Equity
BALANCE AT JULY 31, 2024	$	33	$	282	$	303,510	$	(126,080	)	$	(18,142	)	$	86,580		$	9,472		$	255,655
Dividends declared ($0.10 per share)		—		—		—		—			—			(2,524	)		—			(2,524	)
Dividends declared		—		—		—		—			—			(2,524	)		—			(2,524	)
Repurchases of Class B common stock through repurchase program		—		—		—		(9,873	)		—			—			—			(9,873	)
Restricted Class B common stock purchased from employees		—		—		—		(1,522	)		—			—			—			(1,522	)
Stock issued to an executive officer for bonus payment		—		—		1,824		—			—			—			—			1,824
Stock-based compensation		—		—		1,447		—			—			—			—			1,447
Distributions to noncontrolling interests		—		—		—		—			—			—			(50	)		(50	)
Other comprehensive loss		—		—		—		—			(1,457	)		—			—			(1,457	)
Net income		—		—		—		—			—			37,517			2,851			40,368
BALANCE AT JANUARY 31, 2025	$	33	$	282	$	306,781	$	(137,475	)	$	(19,599	)	$	121,573		$	12,273		$	283,868

IDT CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY—Continued

(Unaudited)

	Three Months Ended January 31, 2024 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interests			Total Equity
BALANCE AT OCTOBER 31, 2023	$	33	$	279	$	302,351		$	(118,312	)	$	(16,627	)	$	32,321	$	6,922		$	206,967
Repurchases of Class B common stock through repurchase program		—		—		—			(319	)		—			—		—			(319	)
Restricted net2phone common stock purchased from employees		—		—		(3,611	)		—			—			—		53			(3,558	)
Exchange of National Retail Solutions shares for Class B common stock		—		2		81			—			—			—		(83	)		—
Stock-based compensation		—		—		1,810			—			—			—		—			1,810
Distributions to noncontrolling interests		—		—		—			—			—			—		(4	)		(4	)
Other comprehensive loss		—		—		—			—			(649	)		—		—			(649	)
Net income		—		—		—			—			—			14,425		1,215			15,640
BALANCE AT JANUARY 31, 2024	$	33	$	281	$	300,631		$	(118,631	)	$	(17,276	)	$	46,746	$	8,103		$	219,887

	Six Months Ended January 31, 2024 (in thousands)
	IDT Corporation Stockholders
	Class A Common Stock		Class B Common Stock		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interests			Total Equity
BALANCE AT JULY 31, 2023	$	33	$	279	$	301,408		$	(115,461	)	$	(17,192	)	$	24,662	$	6,267		$	199,996
Balance	$	33	$	279	$	301,408		$	(115,461	)	$	(17,192	)	$	24,662	$	6,267		$	199,996
Exercise of stock options		—		—		172			—			—			—		—			172
Repurchases of Class B common stock through repurchase program		—		—		—			(3,155	)		—			—		—			(3,155	)
Restricted Class B common stock purchased from employees		—		—		—			(15	)		—			—		—			(15	)
Restricted net2phone common stock purchased from employees		—		—		(3,611	)		—			—			—		53			(3,558	)
Exchange of National Retail Solutions shares for Class B common stock		—		2		81			—			—			—		(83	)		—
Stock-based compensation		—		—		2,581			—			—			—		—			2,581
Distributions to noncontrolling interests		—		—		—			—			—			—		(59	)		(59	)
Other comprehensive loss		—		—		—			—			(84	)		—		—			(84	)
Other comprehensive income (loss)		—		—		—			—			(84	)		—		—			(84	)
Net income		—		—		—			—			—			22,084		1,925			24,009
BALANCE AT JANUARY 31, 2024	$	33	$	281	$	300,631		$	(118,631	)	$	(17,276	)	$	46,746	$	8,103		$	219,887
Balance	$	33	$	281	$	300,631		$	(118,631	)	$	(17,276	)	$	46,746	$	8,103		$	219,887

See accompanying notes to consolidated financial statements.

IDT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	2025			2024
	Six Months Ended January 31,
	2025			2024
	(in thousands)
Operating activities
Net income	$	40,695		$	24,230
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,490			10,146
Deferred income taxes		12,674			5,787
Provision for credit losses, doubtful accounts receivable, and reserve for settlement assets		2,472			1,696
Stock-based compensation		1,774			3,258
Other		1,077			2,829
Changes in assets and liabilities:
Trade accounts receivable		(4,978	)		(7,040	)
Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets		(46,244	)		9,966
Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities		(11,844	)		(6,200	)
Customer funds deposits		15,701			15
Deferred revenue		(1,500	)		(1,381	)

Net cash provided by operating activities		20,317			43,306
Investing activities
Capital expenditures		(10,100	)		(8,885	)
Purchase of convertible preferred stock in equity method investment		(673	)		(1,009	)
Purchases of debt securities and equity investments		(15,997	)		(19,357	)
Proceeds from maturities and sales of debt securities and redemption of equity investments		16,751			31,231

Net cash (used in) provided by investing activities		(10,019	)		1,980
Financing activities
Dividends paid		(2,524	)		—
Distributions to noncontrolling interests		(50	)		(59	)
Proceeds from borrowings under revolving credit facility		24,534			30,588
Repayment of borrowings under revolving credit facility		(24,534	)		(30,588	)
Purchase of restricted shares of net2phone common stock		—			(3,558	)
Proceeds from exercise of stock options		—			172
Repurchases of Class B common stock		(11,395	)		(3,170	)

Net cash used in financing activities		(13,969	)		(6,615	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents		(4,079	)		(3,182	)
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents		(7,750	)		35,489
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period		255,456			198,823
Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	247,706		$	234,312

Supplemental Schedule of Non-Cash Financing Activities
Shares of the Company’s Class B common stock issued to an executive officer for bonus payment	$	1,824		$	—
Value of the Company’s Class B common stock exchanged for National Retail Solutions shares	$	—		$	6,254

See accompanying notes to consolidated financial statements.

IDT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Basis of Presentation

The accompanying unaudited consolidated financial statements of IDT Corporation and its subsidiaries (the “Company” or “IDT”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended January 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2025. The balance sheet at July 31, 2024 has been derived from the Company’s audited financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2024, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2025 refers to the fiscal year ending July 31, 2025).

As of January 31, 2025, the Company owned 94.0% of the outstanding shares of its subsidiary, net2phone 2.0, Inc. (“net2phone 2.0”), which owns and operates the net2phone segment, and 81.5% of the outstanding shares of National Retail Solutions (“NRS”). On a fully diluted basis assuming all the vesting criteria related to various rights granted have been met, the Company would own 90.2% of the equity of net2phone 2.0 and 79.3% of the equity of NRS.

Reclassifications

From and after August 1, 2024, the Company reclassified certain customer funds for pending money transfers in its consolidated financial statements. In the consolidated balance sheet at July 31, 2024, $8.9 million previously included in “Settlement liabilities” was reclassified to “Customer funds deposits,” and in the consolidated statements of cash flows in the six months ended January 31, 2024, cash used for “Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities” of $2.2 million was reclassified to cash used for “Customer funds deposits”. These amounts were reclassified to conform to the current year’s presentation.

From and after February 1, 2024, the Company reclassified most of its technology and development expenses from “Selling, general and administrative” expense to a new “Technology and development” expense caption in the consolidated statements of income and reclassified an amount that was immaterial in all periods to “Direct cost of revenues.” The following table shows the amounts that were reclassified in the three and six months ended January 31, 2024 to conform to the current period’s presentation:

Schedule of Amount that were Reclassified

	Three Months Ended January 31, 2024		Six Months Ended January 31, 2024
	(in thousands)
Selling, general and administrative expense reclassified to:

Direct cost of revenues	$	472	$	907
Technology and development expense	$	12,925	$	25,335
Selling, general and administrative expense	$	12,925	$	25,335

Note 2—Business Segment Information

The Company has four reportable business segments, NRS, Fintech, net2phone, and Traditional Communications.

The NRS segment is an operator of a nationwide point-of-sale (“POS”) network providing independent retailers with store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.

The Fintech segment is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; and (ii) other, significantly smaller, financial services businesses, including a variable interest entity (“VIE”) that processes disbursement payments, and IDT Financial Services Limited (“IDT Financial Services”), the Company’s Gibraltar-based bank.

The net2phone segment is comprised of net2phone’s integrated cloud communications and contact center services.

The Traditional Communications segment includes: (i) IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts: (ii) BOSS Revolution, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada; and (iii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

The Company’s reportable segments are distinguished by types of service, customers, and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. There are no significant asymmetrical allocations to segments. The Company evaluates the performance of its business segments based primarily on income (loss) from operations.

Corporate costs mainly include compensation, consulting fees, treasury, tax and accounting services, human resources, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.

Operating results for the business segments of the Company were as follows:

Schedule of Operating Results of Business Segments

(in thousands)	National Retail Solutions			Fintech			net2phone			Traditional Communications			Corporate			Total
Three Months Ended January 31, 2025
Revenues	$	32,976		$	36,839		$	21,488		$	212,046		$	—		$	303,349
Income (loss) from operations		9,127			3,097			1,104			18,069			(3,080	)		28,317
Depreciation and amortization		(995	)		(758	)		(1,575	)		(1,905	)		(16	)		(5,249	)

Three Months Ended January 31, 2024
Revenues	$	25,223		$	27,987		$	20,353		$	222,535		$	—		$	296,098
Income (loss) from operations		5,349			(736	)		367			14,618			(3,581	)		16,017
Depreciation and amortization		(777	)		(724	)		(1,552	)		(2,029	)		(17	)		(5,099	)

Six Months Ended January 31, 2025
Revenues	$	63,338		$	73,909		$	43,108		$	432,560		$	—		$	612,915
Income (loss) from operations		15,740			6,333			2,103			33,740			(5,960	)		51,956
Depreciation and amortization		(1,955	)		(1,492	)		(3,133	)		(3,877	)		(33	)		(10,490	)

Six Months Ended January 31, 2024
Revenues	$	49,217		$	54,550		$	40,280		$	453,255		$	—		$	597,302
Income (loss) from operations		10,810			(2,120	)		360			30,024			(5,891	)		33,183
Depreciation and amortization		(1,511	)		(1,418	)		(2,991	)		(4,177	)		(49	)		(10,146	)

Note 3—Revenue Recognition

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications and payment offerings as well as wholesale international voice and SMS termination. BOSS Money, NRS, and net2phone are technology-driven, synergistic businesses that leverage the Company’s core assets. BOSS Money’s and NRS’ revenues are primarily recognized at a point in time, and net2phone’s revenue is mainly recognized over time. Traditional Communications’ offerings are mostly minute-based, paid-voice communications services, and revenue is primarily recognized at a point in time. The Company’s most significant revenue streams are from IDT Digital Payments, BOSS Revolution, and IDT Global. IDT Digital Payments and BOSS Revolution are sold direct-to-consumer and through distributors and retailers.

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:

Schedule of Revenues Disaggregated by Business Segment and Service Offered to Customers

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
National Retail Solutions	$	32,976	$	25,223	$	63,338	$	49,217

BOSS Money		33,505		25,039		67,198		49,278
Other		3,334		2,948		6,711		5,272
Total Fintech		36,839		27,987		73,909		54,550

net2phone		21,488		20,353		43,108		40,280

IDT Digital Payments		101,594		99,668		206,712		199,705
BOSS Revolution		53,307		66,655		110,150		137,826
IDT Global		51,281		48,741		103,657		100,775
Other		5,864		7,471		12,041		14,949
Total Traditional Communications		212,046		222,535		432,560		453,255

Total	$	303,349	$	296,098	$	612,915	$	597,302
Revenues	$	303,349	$	296,098	$	612,915	$	597,302

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location:

Schedule of Revenues Disaggregated by Geographic Region

(in thousands)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Total
Three Months Ended January 31, 2025
United States	$	32,976	$	35,620	$	12,483	$	158,953	$	240,032
Outside the United States:
United Kingdom		—		—		—		45,789		45,789
Other		—		1,219		9,005		7,304		17,528

Total outside the United States		—		1,219		9,005		53,093		63,317

Total	$	32,976	$	36,839	$	21,488	$	212,046	$	303,349

(in thousands)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Total
Three Months Ended January 31, 2024
United States	$	25,223	$	26,901	$	10,700	$	163,774	$	226,598
Outside the United States:
United Kingdom		—		—		—		50,390		50,390
Other		—		1,086		9,653		8,371		19,110

Total outside the United States		—		1,086		9,653		58,761		69,500

Total	$	25,223	$	27,987	$	20,353	$	222,535	$	296,098

(in thousands)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Total
Six Months Ended January 31, 2025
United States	$	63,338	$	71,509	$	24,776	$	324,174	$	483,797
Outside the United States:
United Kingdom		—		—		—		93,746		93,746
Other		—		2,400		18,332		14,640		35,372

Total outside the United States		—		2,400		18,332		108,386		129,118

Total	$	63,338	$	73,909	$	43,108	$	432,560	$	612,915

(in thousands)	National Retail Solutions		Fintech		net2phone		Traditional Communications		Total
Six Months Ended January 31, 2024
United States	$	49,217	$	52,734	$	21,388	$	326,842	$	450,181
Outside the United States:
United Kingdom		—		—		—		109,232		109,232
Other		—		1,816		18,892		17,181		37,889

Total outside the United States		—		1,816		18,892		126,413		147,121

Total	$	49,217	$	54,550	$	40,280	$	453,255	$	597,302

Remaining Performance Obligations

The following table includes revenue by business segment expected to be recognized in the future from performance obligations that were unsatisfied or partially unsatisfied as of January 31, 2025. The table excludes contracts that had an original expected duration of one year or less.

Schedule of Estimated Revenue by Business Segment

(in thousands)	National Retail Solutions		net2phone		Total
Twelve-month period ending January 31:
2026	$	8,244	$	40,724	$	48,968
2027		6,946		20,783		27,729
Thereafter		7,272		8,045		15,317

Total	$	22,462	$	69,552	$	92,014

Accounts Receivable and Contract Balances

The timing of revenue recognition may differ from the time of billing to the Company’s customers. Trade accounts receivable in the Company’s consolidated balance sheets represent unconditional rights to consideration. The Company would record a contract asset when revenue is recognized in advance of its right to bill and receive consideration. The Company has not currently identified any contract assets.

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The Company’s contract liability balance is primarily payments received for prepaid BOSS Revolution. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company’s consolidated balance sheets as “Deferred revenue”.

The following table presents information about the Company’s contract liability balance:

Schedule of Information About Contract Liabilities

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period	$	12,936	$	15,803	$	17,123	$	19,605

Deferred Customer Contract Acquisition and Fulfillment Costs

The Company recognizes as an asset its incremental costs of obtaining a contract with a customer that it expects to recover. The Company’s incremental costs of obtaining a contract with a customer are sales commissions paid to employees and third parties on sales to end users. If the amortization period were one year or less for the asset that would be recognized from deferring these costs, the Company applies the practical expedient whereby the Company charges these costs to expense when incurred.

The Company’s costs to fulfill its contracts do not meet the criteria to be recognized as an asset, therefore these costs are charged to expense as incurred.

The Company’s deferred customer contract acquisition costs were as follows:

Schedule of Deferred Customer Contract Acquisition Costs

	January 31, 2025		July 31, 2024
	(in thousands)
Deferred customer contract acquisition costs included in “Other current assets”	$	6,349	$	4,823
Deferred customer contract acquisition costs included in “Other assets”		4,609		4,276

Total	$	10,958	$	9,099

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:

Schedule of Amortization of Deferred Customer Contract Acquisition Costs

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
Amortization of deferred customer contract acquisition costs	$	1,435	$	1,194	$	2,933	$	2,409

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from less than one year to approximately five years. Certain of these leases contain renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise any of these options.

Supplemental disclosures related to the Company’s operating leases were as follows:

Schedule of Supplemental Disclosures Related to the Company’s Operating Leases

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
Operating lease cost	$	590	$	734	$	1,191	$	1,492
Short-term lease cost		249		132		506		459

Total lease cost	$	839	$	866	$	1,697	$	1,951

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	613	$	724	$	1,227	$	1,515
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases	$	613	$	724	$	1,227	$	1,515

Schedule of Supplemental Disclosure Related Weighted Average Operating Leases

	January 31, 2025			July 31, 2024
Weighted-average remaining lease term-operating leases		2.5 years			2.6 years
Weighted-average discount rate-operating leases		5.6	%		5.6	%

In the six months ended January 31, 2025 and 2024, the Company obtained right-of-use assets of $0.4 million and $0.9 million, respectively, in exchange for new operating lease liabilities.

The Company’s aggregate operating lease liability was as follows:

Schedule of Aggregate Operating Lease Liability

	January 31, 2025		July 31, 2024
	(in thousands)
Operating lease liabilities included in “Other current liabilities”	$	1,244	$	1,866
Operating lease liabilities included in noncurrent liabilities		1,349		1,533

Total	$	2,593	$	3,399

Future minimum maturities of operating lease liabilities were as follows:

Schedule of Future Minimum Maturities of Operating Lease Liabilities

(in thousands)
Twelve-month period ending January 31:
2026	$	1,345
2027		749
2028		381
2029		179
2030		149
Thereafter		—

Total lease payments		2,803
Less imputed interest		(210	)

Total operating lease liabilities	$	2,593

Note 5—Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported in the consolidated balance sheets that equal the total of the same amounts reported in the consolidated statements of cash flows:

Schedule of Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

	January 31, 2025		July 31, 2024
	(in thousands)
Cash and cash equivalents	$	142,152	$	164,557
Restricted cash and cash equivalents		105,554		90,899

Total cash, cash equivalents, and restricted cash and cash equivalents	$	247,706	$	255,456

Restricted cash and cash equivalents included the following:

Schedule of Restricted Cash And Cash Equivalents

	January 31, 2025		July 31, 2024
	(in thousands)
IDT Financial Services (Gibraltar)	$	90,930	$	83,284
Disbursement payments VIE		14,465		7,426
Other		159		189

Total restricted cash and cash equivalents	$	105,554	$	90,899

Certain of the electronic money financial services regulations in Gibraltar require IDT Financial Services to safeguard cash held for customer deposits, segregate cash held for customer deposits from any other cash that IDT Financial Services holds and utilize the cash only for the intended payment transaction. In addition, the VIE is contractually required to use customer funds only for the customers’ pending money disbursements.

Note 6—Debt Securities

The following is a summary of available-for-sale debt securities:

Schedule of Available-for-sale Securities

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
January 31, 2025:
U.S. Treasury bills and notes	$	18,615	$	13	$	(42	)	$	18,586
Government sponsored enterprise notes		1,867		—		(1	)		1,866
Corporate bonds		3,678		—		(278	)		3,400

Total	$	24,160	$	13	$	(321	)	$	23,852

July 31, 2024:
U.S. Treasury bills and notes	$	16,641	$	10	$	(66	)	$	16,585
Government sponsored enterprise notes		3,356		—		(3	)		3,353
Corporate bonds		3,821		1		(322	)		3,500

Total	$	23,818	$	11	$	(391	)	$	23,438

The gross unrealized losses in the table above are recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. As of January 31, 2025, the Company determined that the unrealized losses were due to changes in interest rates or market liquidity and were not due to credit losses. In addition, as of January 31, 2025 and July 31, 2024, the Company did not intend to sell any of the securities with unrealized losses, and it is not more likely than not that the Company will be required to sell any of these securities before recovery of the unrealized losses, which may be at maturity.

Proceeds from maturities and sales of debt securities and redemptions of equity investments were $6.9 million and $14.2 million in the three months ended January 31, 2025 and 2024, respectively, and $16.8 million and $31.2 million in the six months ended January 31, 2025 and 2024, respectively. There were no realized gains or realized losses from sales of debt securities in the three and six months ended January 31, 2025 and 2024. The Company uses the specific identification method in computing the realized gains and realized losses on the sales of debt securities.

The contractual maturities of the Company’s available-for-sale debt securities at January 31, 2025 were as follows:

Schedule of Contractual Maturities of Available-for-sale Debt Securities

	Fair Value
	(in thousands)
Within one year	$	17,357
After one year through five years		5,654
After five years through ten years		813
After ten years		28

Total	$	23,852

The following table includes the fair value of the Company’s available-for-sale debt securities that were in an unrealized loss position:

Schedule of Available-for-sale Securities, Unrealized Loss Position

	Unrealized Losses		Fair Value
	(in thousands)
January 31, 2025:
U.S. Treasury bills and notes	$	42	$	5,309
Government sponsored enterprise notes		1		1,567
Corporate bonds		278		3,295

Total	$	321	$	10,171

July 31, 2024:
U.S. Treasury bills and notes	$	66	$	12,936
Government sponsored enterprise notes		3		2,634
Corporate bonds		322		3,310

Total	$	391	$	18,880

The following available-for-sale debt securities included in the table above were in a continuous unrealized loss position for 12 months or longer:

Schedule of Continuous Unrealized Loss Position for 12 Months or Longer

	Unrealized Losses		Fair Value
	(in thousands)
January 31, 2025:
U.S. Treasury bills and notes	$	28	$	2,844
Corporate bonds		261		3,042

Total	$	289	$	5,886

July 31, 2024:
U.S. Treasury bills and notes	$	60	$	4,827
Corporate bonds		307		3,209

Total	$	367	$	8,036

Note 7—Equity Investments

Equity investments consist of the following:

Schedule of Equity Investments

	January 31, 2025		July 31, 2024
	(in thousands)
Zedge, Inc. Class B common stock, 42,282 shares at January 31, 2025 and July 31, 2024	$	115	$	153
Rafael Holdings, Inc. Class B common stock, 278,810 shares at January 31, 2025 and July 31, 2024		574		416
Other marketable equity securities		16		70
Fixed income mutual funds		4,386		4,370

Current equity investments	$	5,091	$	5,009

Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”)	$	892	$	695
Visa Inc. Series A Convertible Participating Preferred Stock (“Visa Series A Preferred”)		—		877
Convertible preferred stock—equity method investment		752		1,338
Hedge funds		2,879		2,883
Other		2,225		725

Noncurrent equity investments	$	6,748	$	6,518

Howard S. Jonas, the Chairman of the Company and the Chairman of the Company’s Board of Directors is also the Vice-Chairman of the Board of Directors of Zedge, Inc. and the Chairman of the Board of Directors and Executive Chairman of Rafael Holdings, Inc.

In June 2016, upon the acquisition of Visa Europe Limited by Visa, Inc. (“Visa”), IDT Financial Services received 1,830 shares of Visa Series C Preferred among other consideration. In July 2024, in connection with Visa’s mandatory release assessment, the Company received 33 shares of Visa’s Series A Preferred. In August 2024, the 33 shares of Visa Series A Preferred were converted into 3,300 shares of Visa Class A common stock, which the Company sold for $0.9 million.

The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

Schedule of Carrying Value of Equity Investments

	2025		2024			2025		2024
	Three Months Ended January 31,					Six Months Ended January 31,
	2025		2024			2025		2024
	(in thousands)
Balance, beginning of period	$	1,027	$	1,747		$	964	$	1,632
Adjustment for observable transactions involving a similar investment from the same issuer		134		202			197		187
Upward adjustment		—		—			—		130
Redemption		—		(230	)		—		(230	)
Impairments		—		—			—		—

Balance, end of the period	$	1,161	$	1,719		$	1,161	$	1,719

The Company adjusted the carrying value of the shares of Visa Series C Preferred it held based on the fair value of Visa Class A common stock, including a discount for lack of current marketability, which is classified as “Adjustment for observable transactions involving a similar investment from the same issuer” in the table above. The Certificate of Designation with respect to the shares of Visa Series C Preferred restricts the transferability of the shares, there is no public market for the shares, and none is expected to develop. The shares become fully convertible into shares of Visa Class A common stock in June 2028.

In addition, in the three and six months ended January 31, 2024, in connection with the acquisition of Regal Bancorp by SR Bancorp, the Company received cash of $0.2 million in exchange for its shares of Regal Bancorp common stock.

Unrealized gains (losses) for all equity investments measured at fair value included the following:

Schedule of Unrealized Gains (losses) Gains for All Equity Investments

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
Net gains (losses) recognized during the period on equity investments	$	396	$	715	$	774	$	(202	)
Less: net gains recognized during the period on equity investments sold during the period		—		—		—		130

Unrealized gains (losses) recognized during the period on equity investments still held at the reporting date	$	396	$	715	$	774	$	(332	)

The unrealized gains and losses for all equity investments measured at fair value in the table above included the following:

	2025			2024		2025			2024
	Three Months Ended January 31,					Six Months Ended January 31,
	2025			2024		2025			2024
	(in thousands)
Unrealized gains (losses) recognized during the period on equity investments:
Rafael Class B common stock	$	58		$	9	$	158		$	(53	)

Zedge Class B common stock	$	(15	)	$	57	$	(38	)	$	49
Equity securities unrealized gain loss	$	(15	)	$	57	$	(38	)	$	49

Equity Method Investment

The Company has an investment in shares of convertible preferred stock of a communications company (the equity method investee, or “EMI”). As of both January 31, 2025 and July 31, 2024, the Company’s ownership was 33.4% of the EMI’s outstanding shares on an as converted basis. The Company accounts for this investment using the equity method since the Company can exercise significant influence over the operating and financial policies of the EMI but does not have a controlling interest.

The Company determined that on the dates of the acquisitions of the EMI’s shares, there were differences between its investment in the EMI and its proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to the Company’s interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. In the accompanying consolidated statements of income, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other income (expense), net” (see Note 17).

The following table summarizes the change in the balance of the Company’s equity method investment:

Summary of Changes in Equity Method Investments

	2025			2024			2025			2024
	Three Months Ended January 31,						Six Months Ended January 31,
	2025			2024			2025			2024
	(in thousands)
Balance, beginning of period	$	1,231		$	2,444		$	1,338		$	2,784
Purchase of convertible preferred stock		—			336			673			1,009
Equity in the net loss of investee		(137	)		(506	)		(574	)		(1,176	)
Amortization of equity method basis difference		(342	)		(342	)		(685	)		(685	)

Balance, end of the period	$	752		$	1,932		$	752		$	1,932

In February 2025, the Company purchased additional shares of the EMI’s convertible preferred stock for $0.3 million. Also in February 2025, the Company entered into a loan agreement with the EMI for a revolving credit facility. The aggregate principal amount available under the facility is $2.0 million. The loans will incur interest at 12% per annum payable semiannually and are due and payable in February 2027. On February 27, 2025, the Company loaned the EMI $0.5 million under the revolving credit facility.

Note 8—Fair Value Measurements

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

Schedule of Balance of Assets Measured at Fair Value on a Recurring Basis

	Level 1 (1)		Level 2 (2)		Level 3 (3)			Total
	(in thousands)
January 31, 2025
Debt securities	$	18,586	$	5,266	$	—		$	23,852
Equity investments included in current assets		5,091		—		—			5,091
Equity investments included in noncurrent assets		—		2,000		892			2,892

Total	$	23,677	$	7,266	$	892		$	31,835

Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(217	)	$	(217	)
Other noncurrent liabilities		—		—		(689	)		(689	)

Total	$	—	$	—	$	(906	)	$	(906	)

July 31, 2024
Debt securities	$	16,585	$	6,853	$	—		$	23,438
Equity investments included in current assets		5,009		—		—			5,009
Equity investments included in noncurrent assets		—		1,377		695			2,072

Total	$	21,594	$	8,230	$	695		$	30,519

Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(222	)	$	(222	)
Other noncurrent liabilities		—		—		(684	)		(684	)

Total	$	—	$	—	$	(906	)	$	(906	)

(1)

– quoted prices in active markets for identical assets or liabilities

(2)

– observable inputs other than quoted prices in active markets for identical assets and liabilities

(3)

– no observable pricing inputs in the market

At both January 31, 2025 and July 31, 2024, the Company had $2.9 million in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method, therefore they were not measured at fair value.

The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Schedule of Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
Balance, beginning of period	$	758	$	1,248	$	695	$	1,263
Total gains included in “Other income (expense), net”		134		202		197		187

Balance, end of period	$	892	$	1,450	$	892	$	1,450

Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period	$	—	$	—	$	—	$	—

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Schedule of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

	2025		2024			2025		2024
	Three Months Ended January 31,					Six Months Ended January 31,
	2025		2024			2025		2024
	(in thousands)
Balance, beginning of period	$	906	$	4,588		$	906	$	4,805
Payments		—		—			—		(214	)
Total (gains) losses included in:
“Other operating expense (gain), net”		—		(73	)		—		(73	)
“Foreign currency translation adjustment”		—		2			—		(1	)

Balance, end of period	$	906	$	4,517		$	906	$	4,517

Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period	$	—	$	—		$	—	$	—

In the six months ended January 31, 2024, the Company paid $0.2 million for contingent consideration related to a prior acquisition. In addition, in the three and six months ended January 31, 2024, the Company recorded a gain on the write-off of a contingent consideration payment obligation, which was included in “Other operating expense (gain), net” in the accompanying consolidated statements of income.

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Cash and cash equivalents, restricted cash and cash equivalents, settlement assets, disbursement prefunding, other current assets, customer funds deposits, settlement liabilities, and other current liabilities. At January 31, 2025 and July 31, 2024, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash, cash equivalents, and restricted cash and cash equivalents were classified as Level 1 and settlement assets, disbursement prefunding, other current assets, customer funds deposits, settlement liabilities, and other current liabilities were classified as Level 2 of the fair value hierarchy.

Other assets and other liabilities. At January 31, 2025 and July 31, 2024, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.

Note 9—Variable Interest Entity

The Company is the primary beneficiary of a VIE that processes disbursement payments. The Company determined that, effective May 31, 2021, it had the power to direct the activities of the VIE that most significantly impact its economic performance, and the Company has the obligation to absorb losses of and the right to receive benefits from the VIE that could potentially be significant to it. As a result, the Company consolidates the VIE. The Company does not currently own any interest in the VIE and thus the net income incurred by the VIE was attributed to noncontrolling interests in the accompanying consolidated statements of income.

The VIE’s net income (loss) and aggregate funding provided by the Company were as follows:

Schedule of Net Income and Aggregate Funding Repaid to the Company by VIE

	2025		2024			2025		2024
	Three Months Ended January 31,					Six Months Ended January 31,
	2025		2024			2025		2024
	(in thousands)
Net income (loss) of the VIE	$	12	$	(107	)	$	350	$	(26	)

Aggregate funding provided by the Company, net	$	204	$	123		$	259	$	237

The VIE’s summarized consolidated balance sheet amounts are as follows:

VIE’s Summarized Consolidated Balance Sheet

	January 31, 2025			July 31, 2024
	(in thousands)
Assets:
Cash and equivalents	$	3,139		$	2,626
Restricted cash		14,465			7,426
Trade accounts receivable, net		472			74
Disbursement prefunding		1,132			2,587
Prepaid expenses		356			258
Other current assets		233			294
Property, plant, and equipment, net		185			179
Other intangibles, net		508			584

Total assets	$	20,490		$	14,028

Liabilities and noncontrolling interests:
Trade accounts payable	$	409		$	4
Accrued expenses		273			124
Customer funds deposits		14,523			9,195
Due to the Company		500			241
Accumulated other comprehensive (loss) income		(2	)		27
Noncontrolling interests		4,787			4,437

Total liabilities and noncontrolling interests	$	20,490		$	14,028

The VIE’s assets may only be used to settle the VIE’s obligations and may not be used for other consolidated entities. The VIE’s liabilities are non-recourse to the general credit of the Company’s other consolidated entities.

Note 10—Other Operating (Expense) Gain, Net

The following table summarizes the other operating (expense) gain, net by business segment:

Schedule of Other Operating (Expense) Gain, Net

	2025			2024			2025			2024
	Three Months Ended January 31,						Six Months Ended January 31,
	2025			2024			2025			2024
	(in thousands)
Corporate—Straight Path Communications Inc. class action legal fees	$	(6	)	$	(2,552	)	$	(6	)	$	(2,764	)
Corporate—Straight Path Communications Inc. class action insurance claims		—			2,186			—			2,869
Corporate—other		—			—			—			12
net2phone—write-off of equipment		(188	)		—			(188	)		—
net2phone—write-off of contingent consideration liability		—			73			—			73
Traditional Communications—other		(33	)		(1	)		(33	)		—

Total other operating (expense) gain, net	$	(227	)	$	(294	)	$	(227	)	$	190

Straight Path Communications Inc. Class Action

As discussed in Note 16, the Company (as well as other defendants) was named in a class action on behalf of the stockholders of the Company’s former subsidiary, Straight Path Communications Inc. (“Straight Path”). The Company incurred legal fees and recorded offsetting gains from insurance claims related to this action in the three and six months ended January 31, 2024. In fiscal 2024, the Company received the final payment from its insurance policy for these claims. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. On January 14, 2025, the plaintiff filed a notice of appeal of the Final Order and Judgment to the Supreme Court of the State of Delaware to appeal the Final Order and Judgment.

Write-off of Contingent Consideration Liability

In the three and six months ended January 31, 2024, the Company recognized a gain on the write-off of a contingent consideration payment obligation in its net2phone segment.

Note 11—Revolving Credit Facility

The Company’s subsidiary, IDT Telecom, Inc. (“IDT Telecom”), entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. As of July 15, 2024 and July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At January 31, 2025 and July 31, 2024, there were no amounts outstanding under this facility. In the six months ended January 31, 2025 and 2024, IDT Telecom borrowed and repaid an aggregate of $24.5 million and $30.6 million, respectively, under the facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the secured overnight financing rate published by the Federal Reserve Bank of New York plus 10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, 2026. IDT Telecom pays a quarterly unused commitment fee of 10 basis points on the average daily balance of the unused portion of the $25.0 million commitment. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of January 31, 2025 and July 31, 2024, IDT Telecom was in compliance with all of the covenants.

Note 12—Redeemable Noncontrolling Interest

On September 29, 2021, NRS sold shares of its Class B common stock representing 2.5% of its outstanding capital stock on a fully diluted basis to Alta Fox Opportunities Fund LP (“Alta Fox”) for cash of $10 million. Alta Fox has the right to request that NRS redeem all or any portion of the NRS common shares that it purchased at the per share purchase price during a period of 182 days following the fifth anniversary of this transaction. The redemption right shall terminate upon the consummation of (i) a sale of NRS or its assets for cash or securities that are listed on a national securities exchange, (ii) a public offering of NRS’ securities, or (iii) a distribution of NRS’ capital stock following which NRS’ common shares are listed on a national securities exchange.

The shares of NRS’ Class B common stock sold to Alta Fox have been classified as mezzanine equity in the accompanying consolidated balance sheets because they may be redeemed at the option of Alta Fox, although the shares are not mandatorily redeemable. The carrying amount of the shares includes the noncontrolling interest in the net income of NRS. The net income attributable to the mezzanine equity’s noncontrolling interest during the periods were as follows:

Schedule of Net Income Attributable to Mezzanine Equity’s Noncontrolling Interest

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
Net income of NRS attributable to the mezzanine equity’s noncontrolling interest	$	189	$	114	$	327	$	221

Note 13—Equity

Dividend Payments

In the six months ended January 31, 2025, the Company paid aggregate cash dividends of $0.10 per share on the Company’s Class A and Class B common stock. In the six months ended January 31, 2025, the Company paid aggregate cash dividends of $2.5 million. In March 2025, the Company’s Board of Directors increased the Company’s quarterly cash dividend on the Company’s Class A and Class B common stock to $0.06 per share from $0.05 per share.

Stock Repurchases

The Company has an existing stock repurchase program authorized by its Board of Directors for the repurchase of shares of the Company’s Class B common stock. In January 2016, the Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the six months ended January 31, 2025, the Company repurchased 217,052 shares of its Class B common stock for an aggregate purchase price of $9.9 million. In the six months ended January 31, 2024, the Company repurchased 135,261 shares of its Class B common stock for an aggregate purchase price of $3.2 million. At January 31, 2025, 4.2 million shares remained available for repurchase under the stock repurchase program.

In the six months ended January 31, 2025 and 2024, the Company paid $1.5 million and $15,000, respectively, to repurchase 32,022 and 654 shares, respectively, of the Company’s Class B common stock that were tendered by employees of the Company to satisfy the employees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock and shares issued for bonus payments. Such shares were repurchased by the Company based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

Amended and Restated Employment Agreement with Abilio (“Bill”) Pereira

On December 21, 2023, the Company entered into an Amended and Restated Employment Agreement with Bill Pereira, the Company’s President and Chief Operating Officer. The agreement provides for, among other things, certain equity grants and a contingent bonus subject to the completion of certain financial milestones as set forth in the agreement. In fiscal 2024, two of these milestones were achieved, for which the Company issued to Mr. Pereira 39,155 shares of its Class B common stock in the third quarter of fiscal 2024 with an issue date value of $1.5 million. In October 2024, the Company issued to Mr. Pereira 39,155 shares of its Class B common stock with an issue date value of $1.8 million in connection with the achievement of one of these milestones.

Exchange of NRS Shares for Shares of the Company’s Class B Common Stock

In January 2024, three management employees of NRS exchanged shares of NRS’ Class B common stock that they held for shares of the Company’s Class B common stock with an equal value. The NRS shares in the exchange represented an aggregate of 1.25% of NRS’ outstanding shares (1.21% on a fully diluted basis), which were exchanged for an aggregate of 192,433 shares of the Company’s Class B common stock. The Company accounted for the exchange as an equity transaction and recorded a decrease in “Noncontrolling interests” and an increase in “Additional paid-in capital” of $0.1 million, based on the carrying amount of the 1.25% noncontrolling interest in NRS.

Restricted net2phone 2.0 Common Stock Repurchased from Employees

In January 2024, the restrictions lapsed on the 0.5 million restricted shares of net2phone 2.0 Class B common stock that were granted in December 2020 to each of Howard S. Jonas and Shmuel Jonas, the Company’s Chief Executive Officer. In addition, in January 2024, Bill Pereira was granted 50,000 shares of net2phone 2.0 Class B common stock in connection with the agreement described above. The Company repurchased a portion of these shares representing an aggregate of 4.5% of the outstanding shares of net2phone 2.0 with an aggregate fair value of $3.6 million to satisfy the grantees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock or the grant of shares. The fair value per share of the net2phone 2.0 Class B common stock was based on a valuation of the business enterprise using a market approach and income approach. The Company recorded an increase in “Noncontrolling interests” of $53,000 and a decrease in “Additional paid-in capital” of $3.61 million for the purchase of the shares.

Deferred Stock Units Equity Incentive Program

On November 30, 2022, the Company adopted an equity incentive program (under its 2015 Stock Option and Incentive Plan) in the form of grants of deferred stock units (“DSUs”) that, upon vesting, entitled the grantees to receive shares of the Company’s Class B common stock. The number of shares issuable on each vesting date varied between 50% to 200% of the number of DSUs that vested on that vesting date, depending on the market price for the underlying Class B common stock on the vesting date relative to the base price approved by the Compensation Committee of the Company’s Board of Directors of $25.45 per share (which was based on the market price at the time of the initial grants under this program). On February 25, 2025, in accordance with the program and based on certain elections made by grantees, the Company issued 276,960 shares of its Class B common stock for vested DSUs, which was the final vesting date under this program.

Note 14— Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

Schedule of Weighted-average Number of Shares Used in the Calculation of Basic and Diluted Earnings Per Share

	2025		2024		2025		2024
	Three Months Ended January 31,				Six Months Ended January 31,
	2025		2024		2025		2024
	(in thousands)
Basic weighted-average number of shares		25,161		25,175		25,182		25,176
Effect of dilutive securities:
Stock options		—		—		—		1
Non-vested restricted Class B common stock		163		142		161		120
Diluted weighted-average number of shares		25,324		25,317		25,343		25,297

There were no shares excluded from the calculation of diluted earnings per share in the three and six months ended January 31, 2025 and 2024.

Note 15—Accumulated Other Comprehensive Loss

The accumulated balances for each classification of other comprehensive loss were as follows:

Schedule of Accumulated Balances for Each Classification of Other Comprehensive (Loss)

	Unrealized Loss on Available-for-Sale Securities			Foreign Currency Translation			Accumulated Other Comprehensive Loss
	(in thousands)
Balance, July 31, 2024	$	(380	)	$	(17,762	)	$	(18,142	)
Other comprehensive income (loss) attributable to IDT Corporation		72			(1,529	)		(1,457	)
Balance, January 31, 2025	$	(308	)	$	(19,291	)	$	(19,599	)

Note 16—Commitments and Contingencies

Legal Proceedings

On July 5, 2017, plaintiff JDS1, LLC, on behalf of itself and all other similarly situated stockholders of Straight Path, and derivatively on behalf of Straight Path as nominal defendant, filed a putative class action and derivative complaint in the Court of Chancery of the State of Delaware (the “Court of Chancery”) against the Company, The Patrick Henry Trust (a trust formed by Howard S. Jonas that held record and beneficial ownership of certain shares of Straight Path he formerly held), Howard S. Jonas, and each of Straight Path’s directors. The complaint alleged that the Company aided and abetted Straight Path Chairman of the Board and Chief Executive Officer Davidi Jonas, and Howard S. Jonas in his capacity as controlling stockholder of Straight Path, in breaching their fiduciary duties to Straight Path in connection with the settlement of claims between Straight Path and the Company related to potential indemnification claims concerning Straight Path’s obligations under the Consent Decree it entered into with the Federal Communications Commission (“FCC”), as well as the sale of Straight Path’s subsidiary Straight Path IP Group, Inc. to the Company in connection with that settlement. That action was consolidated with a similar action that was initiated by The Arbitrage Fund. The Plaintiffs sought, among other things, (i) a declaration that the action may be maintained as a class action or in the alternative, that demand on the Straight Path Board is excused; (ii) that the term sheet is invalid; (iii) awarding damages for the unfair price stockholders received in the merger between Straight Path and Verizon Communications Inc. for their shares of Straight Path’s Class B common stock; and (iv) ordering Howard S. Jonas, Davidi Jonas, and the Company to disgorge any profits for the benefit of the class Plaintiffs. On August 28, 2017, the Plaintiffs filed an amended complaint. The trial was held in August and December 2022, and closing arguments were presented on May 3, 2023. On October 3, 2023, the Court of Chancery issued a Memorandum Decision (the “Post-Trial Decision”) dismissing all claims against the Company, and finding that, contrary to the plaintiffs’ allegations, the class suffered no damages. On July 22, 2024, oral argument was held in the Court of Chancery on the plaintiff’s post-trial application for attorney’s fees. On October 29, 2024, the Court of Chancery issued a Memorandum Opinion denying plaintiff’s request for attorney’s fees (the “Attorney’s Fee Decision”). On December 16, 2024, the Court of Chancery issued a Final Order and Judgment, embodying the Post-Trial Decision and Attorney’s Fee Decision. On January 14, 2025, the plaintiff filed a notice of appeal of the Final Order and Judgment to the Supreme Court of the State of Delaware to appeal the Final Order and Judgment.

In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, the Company believes that none of the other legal proceedings to which the Company is a party will have a material adverse effect on the Company’s results of operations, cash flows, or financial condition.

Sales Tax Contingency

On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. It is possible that one or more jurisdictions may assert that the Company has liability for periods for which it has not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect the Company’s business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to the Company’s operations, and if such changes were made it could materially and adversely affect the Company’s business, financial position, and operating results.

Regulatory Fees Audit

The Company’s 2017 FCC Form 499-A, which reported its calendar year 2016 revenue, was audited by the Universal Service Administrative Company (“USAC”). The USAC’s final decision imposed a $2.9 million charge on the Company for the Federal Telecommunications Relay Service (“TRS”) Fund. The Company has appealed the USAC’s final decision to the FCC and does not intend to remit payment for the TRS Fund fees unless and until a negative decision on its appeal has been issued. The Company has made certain changes to its filing policies and procedures for years that remain potentially under audit. At January 31, 2025 and July 31, 2024, the Company’s accrued expenses included $23.1 million and $25.9 million, respectively, for FCC-related regulatory fees for the year covered by the audit, as well as prior and subsequent years.

Purchase Commitments

At January 31, 2025, the Company had purchase commitments of $0.8 million primarily for equipment and services.

Performance Bonds

The Company has performance bonds issued through third parties for the benefit of various states in order to comply with the states’ financial requirements for money remittance licenses and telecommunications resellers. At January 31, 2025 and July 31, 2024, the Company had aggregate performance bonds outstanding of $34.1 million and $32.4 million, respectively.

Note 17—Other Income (Expense), Net

Other income (expense), net consists of the following:

Schedule of Other Income (Expense), Net

	2025			2024			2025			2024
	Three Months Ended January 31,						Six Months Ended January 31,
	2025			2024			2025			2024
	(in thousands)
Foreign currency transaction gains (losses)	$	284		$	2,510		$	419		$	(989	)
Equity in net loss of investee		(479	)		(848	)		(1,259	)		(1,861	)
Gains (losses) on investments, net		396			715			774			(202	)
Other		6			157			(10	)		(1	)

Total other income (expense), net	$	207		$	2,534		$	(76	)	$	(3,053	)

Note 18—Income Taxes

As of January 31, 2025, the Company’s best estimate of the effective tax rate expected to be applicable for fiscal 2025 was 25.6% compared to 28.2% at July 31, 2024. The change in the estimated effective tax rate was mainly due to differences in the amount of taxable income earned in the various taxing jurisdictions.

Note 19—Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disclosures about an entity’s expenses including more detailed information about the types of expenses in commonly presented expense captions. At each interim and annual reporting period, entities will disclose in tabular format disaggregating information about prescribed categories underlying relevant income statement captions, as well as the total amount of selling expense and a description of the composition of its selling expense. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2027. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, primarily related to the rate reconciliation and income taxes paid disclosures as well as certain other amendments to income tax disclosures. Entities will be required on an annual basis to consistently categorize and provide greater disaggregation of rate reconciliation information and further disaggregate their income taxes paid. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2025. The amendments in this ASU should be applied on a prospective basis, although retrospective application is permitted. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60), Accounting for and Disclosure of Crypto Assets, that changes the accounting for crypto assets from a cost-less-impairment model to fair value, with changes recognized in net income each reporting period. The ASU also requires enhanced disclosures including, among other things, the name, cost basis, fair value, and number of units for each significant holding, and a rollforward of annual activity including additions, dispositions, gains, and losses. The Company will adopt the amendments in this ASU for its fiscal year beginning on August 1, 2025. The ASU requires a cumulative-effect adjustment to the opening balance of retained earnings as of adoption. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 (or our 2024 Form 10-K) as filed with the U.S. Securities and Exchange Commission (or SEC).

As used below, unless the context otherwise requires, the terms “the Company,” “IDT,” “we,” “us,” and “our” refer to IDT Corporation, a Delaware corporation, its predecessor, International Discount Telecommunications, Corp., a New York corporation, and their subsidiaries, collectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks, and uncertainties that could result in those differences include, but are not limited to, those discussed under Item 1A to Part I “Risk Factors” in our 2024 Form 10-K and Item 1A to Part II “Risk Factors” of this Quarterly Report. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our 2024 Form 10-K.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disclosures about an entity’s expenses including more detailed information about the types of expenses in commonly presented expense captions. At each interim and annual reporting period, entities will disclose in tabular format disaggregating information about prescribed categories underlying relevant income statement captions, as well as the total amount of selling expense and a description of the composition of its selling expense. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2027. We are evaluating the impact that this ASU will have on our consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, primarily related to the rate reconciliation and income taxes paid disclosures as well as certain other amendments to income tax disclosures. Entities will be required on an annual basis to consistently categorize and provide greater disaggregation of rate reconciliation information and further disaggregate their income taxes paid. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2025. The amendments in this ASU should be applied on a prospective basis, although retrospective application is permitted. We are evaluating the impact that this ASU will have on our consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60), Accounting for and Disclosure of Crypto Assets, that changes the accounting for crypto assets from a cost-less-impairment model to fair value, with changes recognized in net income each reporting period. The ASU also requires enhanced disclosures including, among other things, the name, cost basis, fair value, and number of units for each significant holding, and a rollforward of annual activity including additions, dispositions, gains, and losses. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2025. The ASU requires a cumulative-effect adjustment to the opening balance of retained earnings as of adoption. We are evaluating the impact that this ASU will have on our consolidated financial statements.

Results of Operations

We evaluate the performance of our business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

As of January 31, 2025, we owned 94.0% of the outstanding shares of our subsidiary, net2phone 2.0, Inc., or net2phone 2.0, which owns and operates the net2phone segment, and 81.5% of the outstanding shares of National Retail Solutions, or NRS. On a fully diluted basis assuming all the vesting criteria related to various rights granted have been met, we would own 90.2% of the equity of net2phone 2.0 and 79.3% of the equity of NRS.

Reclassification

From and after February 1, 2024, we reclassified most of our technology and development expenses from “Selling, general and administrative” expense to a new “Technology and development” expense caption in the consolidated statements of income and reclassified an amount that was immaterial in all periods to “Direct cost of revenues.” The following table shows the amounts that were reclassified in the three and six months ended January 31, 2024 to conform to the current period’s presentation:

	Three Months Ended January 31, 2024		Six Months Ended January 31, 2024
	(in millions)
Selling, general and administrative expense reclassified to:
Direct cost of revenues	$	0.5	$	0.9
Technology and development expense	$	12.9	$	25.3

Explanation of Performance Metrics

Our results of operations discussion include the following performance metrics:

●

for NRS, active point-of-sale, or POS, terminals, payment processing accounts, and recurring revenue,

●

for net2phone, seats and subscription revenue, and

●

for Traditional Communications, minutes of use.

NRS uses two key metrics to measure the size of its customer base: active POS terminals and payment processing accounts. Active POS terminals are the number of POS terminals that have completed at least one transaction in the calendar month. It excludes POS terminals that have not been fully installed by the end of the month. Payment processing accounts are accounts that can generate revenue. It excludes accounts that have been approved but not activated. NRS’ recurring revenue is NRS’ revenue in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, excluding its revenue from POS terminal sales.

net2phone’s cloud communications offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. net2phone’s subscription revenue is its revenue in accordance with U.S. GAAP excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil.

The trends and comparisons between periods for the number of active POS terminals, payment processing accounts, seats served, recurring revenue, and subscription revenue are used in the analysis of NRS’ or net2phone’s revenues and direct cost of revenues and are strong indications of the top-line growth and performance of the business.

Minutes of use is a nonfinancial metric that measures aggregate customer usage during a reporting period. Minutes of use is an important factor in BOSS Revolution’s and IDT Global’s revenue recognition since satisfaction of our performance obligation occurs when the customer uses our service. Minutes of use trends and comparisons between periods are used in the analysis of revenues and direct cost of revenues.

Three and Six Months Ended January 31, 2025 Compared to Three and Six Months Ended January 31, 2024

National Retail Solutions Segment

NRS, which represented 10.9% and 8.5% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 10.3% and 8.2% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, is an operator of a nationwide POS network providing independent retailers with store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.

	Three months ended January 31,						Change						Six months ended January 31,						Change
	2025			2024			$/#			%			2025			2024			$/#			%
	(in millions)
Revenues:
Recurring	$	31.6		$	23.9		$	7.7			32.3	%	$	60.5		$	46.3		$	14.2			30.9	%
Other		1.4			1.3			0.1			1.9			2.8			2.9			(0.1	)		(5.7	)

Total revenues		33.0			25.2			7.8			30.7			63.3			49.2			14.1			28.7
Direct cost of revenues		(2.7	)		(2.7	)		—			(1.7	)		(5.4	)		(6.0	)		(0.6	)		(9.0	)

Gross profit		30.3			22.5			7.8			34.7			57.9			43.2			14.7			33.9
Selling, general and administrative		(19.0	)		(15.3	)		3.7			24.6			(38.0	)		(28.8	)		9.2			31.8
Technology and development		(2.2	)		(1.9	)		0.3			14.4			(4.2	)		(3.6	)		0.6			15.1

Income from operations	$	9.1		$	5.3		$	3.8			70.6	%	$	15.7		$	10.8		$	4.9			45.6	%

Gross margin percentage		91.8	%		89.1	%		2.7	%					91.4	%		87.9	%		3.5	%

	January 31,		Change
	2025	2024	#	%
	(in thousands)
Active POS terminals	34.8	28.7	6.1	21	%
Payment processing accounts	23.9	18.2	5.7	32	%

Revenues. Revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 driven primarily by revenue growth from NRS’ merchant services, as well as the expansion of NRS’ POS network.

Direct Cost of Revenues. Direct cost of revenues decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to the decreases in the direct costs of NRS’ POS terminal sales.

Selling, General and Administrative. Selling, general and administrative expense increased in the three months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily due to increases in sales commissions, employee compensation, and bad debt expense. Selling, general and administrative expense increased in the six months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily due to increases in sales commissions, employee compensation, legal fees, marketing expense, and bad debt expense. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense decreased to 57.6% from 60.4% in the three months ended January 31, 2025 and 2024, respectively, and increased to 60.0% from 58.6% in the six months ended January 31, 2025 and 2024, respectively.

Technology and Development. Technology and development expense increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in employee compensation and depreciation and amortization expense, partially offset by a decrease in consulting expense.

Fintech Segment

Fintech, which represented 12.1% and 9.4% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 12.1% and 9.1% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; and (ii) other, significantly smaller, financial services businesses, including a variable interest entity, or VIE, that processes disbursement payments, and IDT Financial Services Limited, or IDT Financial Services, our Gibraltar-based bank.

	Three months ended January 31,						Change						Six months ended January 31,						Change
	2025			2024			$/#			%			2025			2024			$/#			%
		(in millions)
Revenues:
BOSS Money	$	33.5		$	25.0		$	8.5			33.8	%	$	67.2		$	49.3		$	17.9			36.4	%
Other		3.3			3.0			0.3			13.1			6.7			5.3			1.4			27.3
Total revenues		36.8			28.0			8.8			31.6			73.9			54.6			19.3			35.5
Direct cost of revenues		(15.1	)		(11.9	)		3.2			27.3			(30.6	)		(23.7	)		6.9			29.8

Gross profit		21.7			16.1			5.6			34.8			43.3			30.9			12.4			39.9
Selling, general and administrative		(16.3	)		(14.3	)		2.0			13.8			(32.4	)		(28.5	)		3.9			13.6
Technology and development		(2.3	)		(2.5	)		(0.2	)		(8.1	)		(4.6	)		(4.5	)		0.1			0.4
Income (loss) from operations	$	3.1		$	(0.7	)	$	3.8			520.7	%	$	6.3		$	(2.1	)	$	8.4			398.8	%

Gross margin percentage		58.9	%		57.5	%		1.4	%					58.5	%		56.7	%		1.8	%

Revenues. Revenues from BOSS Money increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily because of increased transaction volume at BOSS Money, which included increases in both its digital and retail channels. BOSS Money continues to expand to new destinations and to build out its extensive payout network in destination markets.

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to an increase in BOSS Money’s direct cost of revenues, which was due to the increase in BOSS Money’s revenue.

Selling, General and Administrative. Selling, general and administrative expense increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in debit and credit card processing charges, employee compensation, and bank fees. The increase in card processing charges was the result of increased credit and debit card transactions through our BOSS Money app and other digital channels. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense decreased to 44.2% from 51.2% in the three months ended January 31, 2025 and 2024, respectively, and to 43.8% from 52.2% in the six months ended January 31, 2025 and 2024, respectively.

Technology and Development. Technology and development expense decreased in the three months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily due to a decrease in employee compensation expense. Technology and development expense increased in the six months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily due to increases in depreciation and amortization expense and cloud services expense, partially offset by a decrease in employee compensation.

net2phone Segment

The net2phone segment, which represented 7.1% and 6.9% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 7.0% and 6.8% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, is comprised of net2phone’s integrated cloud communications and contact center services.

	Three months ended January 31,						Change						Six months ended January 31,						Change
	2025			2024			$/#			%			2025			2024			$/#			%
	(in millions)
Revenues:
Subscription	$	21.0		$	19.3		$	1.7			8.7	%	$	42.0		$	37.8		$	4.2			11.0	%
Other		0.5			1.1			(0.6	)		(53.6	)		1.1			2.5			(1.4	)		(54.4	)

Total revenues		21.5			20.4			1.1			5.6			43.1			40.3			2.8			7.0
Direct cost of revenues		(4.5	)		(4.3	)		0.2			4.4			(9.0	)		(8.4	)		0.6			7.3

Gross profit		17.0			16.1			0.9			5.9			34.1			31.9			2.2			6.9
Selling, general and administrative		(12.9	)		(13.2	)		(0.3	)		(1.5	)		(26.1	)		(26.4	)		(0.3	)		(1.2	)
Technology and development		(2.8	)		(2.6	)		0.2			5.5			(5.7	)		(5.2	)		0.5			10.6
Other operating (expense) gain, net		(0.2	)		0.1			(0.3	)		(357.3	)		(0.2	)		0.1			(0.3	)		(357.1	)

Income from operations	$	1.1		$	0.4		$	0.7			201.0	%	$	2.1		$	0.4		$	1.7			484.6	%

Gross margin percentage		79.2	%		78.9	%		0.3	%					79.1	%		79.1	%		—%

	January 31,		Change
	2025	2024	#	%
	(in thousands)
Seats served	410	375	35	9	%

Revenues. net2phone’s revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 driven primarily by the growth in subscription revenue, most significantly in the U.S. and Latin America markets, which reflected the increase in seats served at January 31, 2025 compared to January 31, 2024.

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to the increase in revenues, with the largest increase in the U.S. market. net2phone’s revenue growth exceeded the increase in direct cost of revenues.

Selling, General and Administrative. Selling, general and administrative expense decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in marketing expense and consulting expense, partially offset by increases in sales commissions. As a percentage of net2phone’s revenues, net2phone’s selling, general and administrative expense decreased to 60.3% from 64.6% in the three months ended January 31, 2025 and 2024, respectively, and to 60.5% from 65.6% in the six months ended January 31, 2025 and 2024, respectively.

Other operating (expense) gain, net. In the three and six months ended January 31, 2025, net2phone recorded an expense of $0.2 million for equipment that was taken out of service. In the three and six months ended January 31, 2024, net2phone recognized a gain of $0.1 million on the write-off of a contingent consideration payment obligation.

Traditional Communications Segment

The Traditional Communications segment, which represented 69.9% and 75.2% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 70.6% and 75.9% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, includes: (i) IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts; (ii) BOSS Revolution, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada; and (iii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Traditional Communications’ most significant revenue streams are from IDT Digital Payments, BOSS Revolution, and IDT Global. IDT Digital Payments and BOSS Revolution are sold directly to consumers and through distributors and retailers. We receive payments for BOSS Revolution, traditional calling cards, and IDT Digital Payments prior to providing the services. We recognize the revenue when services are provided to the customer. Traditional Communications’ revenues tend to be somewhat seasonal, with the second fiscal quarter (which contains Christmas and New Year’s Day) and the fourth fiscal quarter (which contains Mother’s Day and Father’s Day) typically showing higher minute volumes.

	Three months ended January 31,						Change						Six months ended January 31,						Change
	2025			2024			$/#			%			2025			2024			$/#			%
	(in millions)
Revenues:
IDT Digital Payments	$	101.6		$	99.6		$	2.0			1.9	%	$	206.7		$	199.7		$	7.0			3.5	%
BOSS Revolution		53.3			66.7			(13.4	)		(20.0	)		110.2			137.8			(27.6	)		(20.1	)
IDT Global		51.3			48.7			2.6			5.2			103.7			100.8			2.9			2.9
Other		5.8			7.5			(1.7	)		(21.5	)		12.0			15.0			(3.0	)		(19.4	)

Total revenues		212.0			222.5			(10.5	)		(4.7	)		432.6			453.3			(20.7	)		(4.6	)
Direct cost of revenues		(168.9	)		(180.2	)		(11.3	)		(6.3	)		(348.1	)		(368.4	)		(20.3	)		(5.5	)

Gross profit		43.1			42.3			0.8			2.0			84.5			84.9			(0.4	)		(0.5	)
Selling, general and administrative		(19.4	)		(21.4	)		(2.0	)		(9.3	)		(39.4	)		(42.0	)		(2.6	)		(6.1	)
Technology and development		(5.4	)		(5.9	)		(0.5	)		(9.2	)		(10.9	)		(12.0	)		(1.1	)		(9.3	)
Severance		(0.2	)		(0.4	)		(0.2	)		(32.6	)		(0.5	)		(0.9	)		(0.4	)		(51.3	)

Income from operations	$	18.1		$	14.6		$	3.5			23.6	%	$	33.7		$	30.0		$	3.7			12.4	%

Gross margin percentage		20.3	%		19.0	%		1.3	%					19.5	%		18.7	%		0.8	%

Minutes of use:
BOSS Revolution		337			457			(120	)		(26.2	)%		701			953			(252	)		(26.5	)%
IDT Global		1,351			1,395			(44	)		(3.2	)		2,788			2,839			(51	)		(1.8	)

Revenues. Revenues from IDT Digital Payments increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in revenues from the direct-to-consumer and enterprise and wholesale channels, partially offset by a decrease in revenues from the retail channel.

Revenues and minutes of use from BOSS Revolution decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024. BOSS Revolution continues to be impacted by persistent, market-wide trends, including the proliferation of unlimited calling plans offered by wireless carriers and mobile virtual network operators, and the increasing penetration of free and paid over-the-top voice, video conferencing, and messaging services.

Revenues from IDT Global increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024, although IDT Global’s minutes of use decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024. IDT Global mitigated the impacts of the ongoing industry-wide declines in paid-minute voice through new service offerings and a traffic mix shift to higher margin routes. However, we expect IDT Global to continue to be adversely impacted by these trends, and minutes of use and revenues will likely continue to decline from quarter-to-quarter, as we seek to maximize economics rather than necessarily sustain minutes of use or revenues.

Selling, General and Administrative. Selling, general and administrative expense decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in stock-based compensation, sales commissions, employee compensation, and debit and credit card processing charges, partially offset by increases in marketing expense and legal fees. As a percentage of Traditional Communications’ revenue, Traditional Communications’ selling, general and administrative expense decreased to 9.2% from 9.6% in the three months ended January 31, 2025 and 2024, respectively, and decreased to 9.1% from 9.3% in the six months ended January 31, 2025 and 2024, respectively.

Technology and Development. Technology and development expense decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in employee compensation, software license and maintenance expense, and depreciation and amortization expense.

Severance Expense. In the three months ended January 31, 2025 and 2024, Traditional Communications incurred severance expense of $0.2 million and $0.4 million, respectively, and in the six months ended January 31, 2025 and 2024, Traditional Communications incurred severance expense of $0.5 million and $0.9 million, respectively.

Corporate

	Three months ended January 31,						Change					Six months ended January 31,						Change
	2025			2024			$/#		%			2025			2024			$/#			%
		(in millions)
General and administrative	$	(3.1	)	$	(3.2	)	$	0.1		5.1	%	$	(6.0	)	$	(6.0	)	$	—			1.6	%
Other operating (expense) gain, net		—			(0.4	)		0.4		98.3			—			0.1			(0.1	)		(105.5	)
Loss from operations	$	(3.1	)	$	(3.6	)	$	0.5		14.0	%	$	(6.0	)	$	(5.9	)	$	(0.1	)		(1.2	)%

General and Administrative. Corporate general and administrative expense decreased in the three months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily because of a decrease in audit and accounting fees, partially offset by an increase in legal fees. Corporate general and administrative expense decreased in the six months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily because of a decrease in employee compensation, partially offset by an increase in legal fees. As a percentage of our consolidated revenues, Corporate general and administrative expense was 1.0% and 1.1% in the three months ended January 31, 2025 and 2024, respectively, and 1.0% and 1.0% in the six months ended January 31, 2025 and 2024, respectively.

Other Operating (Expense) Gain, net. As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path Communications Inc., or Straight Path. We incurred legal fees of $6,000 and $2.6 million in the three months ended January 31, 2025 and 2024, respectively, and $6,000 and $2.8 million in the six months ended January 31, 2025 and 2024, respectively, related to this action. Also, we recorded offsetting gains from insurance claims for this matter of nil and $2.2 million in the three months ended January 31, 2025 and 2024, respectively, and nil and $2.9 million in the six months ended January 31, 2025 and 2024, respectively. In fiscal 2024, we received the final payment from our insurance policy for these claims. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. On January 14, 2025, the plaintiff filed a notice of appeal of the Final Order and Judgment to the Supreme Court of the State of Delaware to appeal the Final Order and Judgment.

Consolidated

The following is a discussion of our consolidated stock-based compensation expense, and our consolidated income and expense line items below income from operations.

Stock-Based Compensation Expense. Total stock-based compensation expense included in consolidated selling, general and administrative expense and technology and development expense was $0.9 million and $2.5 million in the three months ended January 31, 2025 and 2024, respectively, and $1.8 million and $3.3 million in the six months ended January 31, 2025 and 2024, respectively. The decrease in stock-based compensation expense was primarily due to a decrease in expense related to certain equity grants made in the three months ended January 31, 2024 to Bill Pereira, our President and Chief Operating Officer, and a decrease in stock-based compensation expense from the grant of deferred stock units, or DSUs, that, upon vesting, will entitle the grantees to receive shares of our Class B common stock. As of January 31, 2025, there was $0.7 million of total unrecognized compensation cost related to non-vested DSUs, which is being recognized on a graded vesting basis over the requisite service periods that end in October 2027.

On February 25, 2025, in accordance with the program and based on certain elections made by grantees, we issued 276,960 shares of our Class B common stock for vested DSUs.

Effective as of June 30, 2022, restricted shares of NRS’ Class B common stock were granted to certain NRS employees. The restrictions on the shares lapse in three installments, the first was on June 1, 2024, and the others are June 1, 2026 and June 1, 2027. As of January 31, 2025, unrecognized compensation cost related to NRS’ non-vested Class B common stock was an aggregate of $1.6 million. The unrecognized compensation cost is expected to be recognized over the remaining vesting period that ends in fiscal 2027.

As of January 31, 2025, there was an aggregate of $0.7 million in unrecognized compensation cost related to non-vested stock options and restricted stock, which is expected to be recognized over the remaining vesting periods that end in fiscal 2028.

	Three months ended January 31,						Change						Six months ended January 31,						Change
	2025			2024			$/#			%			2025			2024			$/#			%
		(in millions)
Income from operations	$	28.3		$	16.0		$	12.3			76.8	%	$	52.0		$	33.2		$	18.8			56.6	%
Interest income, net		1.4			1.2			0.2			13.3			2.8			2.0			0.8			36.4
Other income (expense), net		0.2			2.5			(2.3	)		(91.8	)		(0.1	)		(3.1	)		3.0			97.5
Provision for income taxes		(7.7	)		(4.0	)		(3.7	)		(92.0	)		(14.0	)		(7.9	)		(6.1	)		(75.9	)

Net income		22.2			15.7			6.5			41.0			40.7			24.2			16.5			68.0
Net income attributable to noncontrolling interests		(1.9	)		(1.3	)		(0.6	)		(46.3	)		(3.2	)		(2.1	)		(1.1	)		(48.1	)
Net income attributable to IDT Corporation	$	20.3		$	14.4		$	5.9			40.5	%	$	37.5		$	22.1		$	15.4			69.9	%

Other Income (Expense), net. Other income (expense), net consists of the following:

		Three months ended January 31,						Six months ended January 31,
		2025			2024			2025			2024
		(in millions)
Foreign currency transaction gains (losses)	$	0.3		$	2.5		$	0.4		$	(1.0	)
Equity in the net loss of investee		(0.5	)		(0.8	)		(1.3	)		(1.9	)
Gains (losses) on investments, net		0.4			0.7			0.8			(0.2	)
Other		—			0.1			—			—
Total	$	0.2		$	2.5		$	(0.1	)	$	(3.1	)

We have an investment in shares of convertible preferred stock of a communications company (the equity method investee, or EMI). As of both January 31, 2025 and 2024, our ownership was 33.4% of the EMI’s outstanding shares on an as converted basis. We account for this investment using the equity method since we can exercise significant influence over the operating and financial policies of the EMI but do not have a controlling interest. We determined that on the dates of the acquisitions of the EMI’s shares, there were differences between our investment in the EMI and our proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to our interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. “Equity in the net loss of investee” includes the amortization of equity method basis difference.

Provision for Income Taxes. The change in income tax expense in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 was primarily due to differences in the amount of taxable income earned in the various taxing jurisdictions.

Net Income Attributable to Noncontrolling Interests. The change in the net income attributable to noncontrolling interests in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 was primarily due to increases in net income attributable to the noncontrolling interests in net2phone 2.0, NRS, and the VIE, partially offset by a decrease in net income attributable to the noncontrolling interests in Sochitel.

Liquidity and Capital Resources

As of the date of this Quarterly Report, we expect our cash flow from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on January 31, 2025 will be sufficient to meet our currently anticipated working capital and capital expenditure requirements during the twelve-month period ending January 31, 2026.

At January 31, 2025, we had cash, cash equivalents, debt securities, and current equity investments of $171.1 million and working capital (current assets in excess of current liabilities) of $183.9 million.

Contractual Obligations and Commitments

The following table includes our anticipated material cash requirements from contractual obligations and other commitments at January 31, 2025:

Payments Due by Period (in millions)	Total		Less than 1 year		1–3 years		4–5 years		After 5 years
Purchase commitments	$	0.8	$	0.5	$	0.3	$	—	$	—
Connectivity obligations under service agreements		1.9		1.0		0.9		—		—
Operating leases including short-term leases		3.2		1.7		1.2		0.3		—
Total (1)	$	5.9	$	3.2	$	2.4	$	0.3	$	—

(1)

The above table does not include up to $10 million for the potential redemption of shares of NRS’ Class B common stock, an aggregate of $34.1 million in performance bonds, and up to $3.0 million for potential contingent consideration payments related to a business acquisition, due to the uncertainty of the amount and/or timing of any such payments.

Consolidated Financial Condition

	Six months ended January 31,
	2025			2024
	(in millions)
Cash flows provided by (used in):
Operating activities	$	20.3		$	43.3
Investing activities		(10.0	)		2.0
Financing activities		(14.0	)		(6.6	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents		(4.1	)		(3.2	)
(Decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents	$	(7.8	)	$	35.5

Operating Activities

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, generally trade accounts receivable and trade accounts payable. The decrease in net cash provided by operating activities to $20.3 million in the six months ended January 31, 2025 from $43.3 in the six months ended January 31, 2024 predominantly reflects the timing of our payments to cover anticipated BOSS Money disbursement prefunding.

Gross trade accounts receivable increased to $52.4 million at January 31, 2025 from $48.6 million at July 31, 2024 primarily due to amounts billed in the six months ended January 31, 2025 that were greater than collections during the period.

Deferred revenue arises from sales of prepaid products and varies from period to period depending on the mix and the timing of revenues. Deferred revenue decreased to $28.4 million at January 31, 2025 from $30.4 million at July 31, 2024 primarily due to decreases in BOSS Revolution’s and traditional calling cards’ deferred revenue balances.

Customer funds deposits liabilities increased to $104.7 million at January 31, 2025 from $91.9 million at July 31, 2024. Our restricted cash and cash equivalents included an aggregate of $105.4 million and $90.7 million at January 31, 2025 and July 31, 2024, respectively, held by IDT Financial Services and our VIE for these customer funds.

In September 2017, we and certain of our subsidiaries were certified by the New Jersey Economic Development Authority, or NJEDA, as having met the requirements of the Grow New Jersey Assistance Act Tax Credit Program. The program provides for credits against a corporation’s New Jersey corporate business tax liability for maintaining a minimum number of employees in New Jersey, and that tax credits may be sold subject to certain conditions. On June 5, 2023, we received a 2019 tax credit certificate for $1.8 million from the NJEDA. In August 2023, we sold the certificate for cash of $1.6 million.

On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect our business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to our operations, and if such changes were made it could materially and adversely affect our business, financial position, and operating results.

As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiff’s allegations, the class suffered no damages. On January 14, 2025, the plaintiff filed a notice of appeal of the Final Order and Judgment to the Supreme Court of the State of Delaware to appeal the Final Order and Judgment.

Investing Activities

Our capital expenditures were $10.1 million and $8.9 million in the six months ended January 31, 2025 and 2024, respectively. We currently anticipate that total capital expenditures in the twelve-month period ending January 31, 2026 will be $19 million to $20 million. We expect to fund our capital expenditures with our net cash provided by operating activities and cash, cash equivalents, debt securities, and current equity investments on hand.

In the six months ended January 31, 2025 and 2024, each of the EMI’s shareholders, including us, purchased additional shares of the EMI’s convertible preferred stock. We paid an aggregate of $0.7 million and $1.0 million in the six months ended January 31, 2025 and 2024, respectively, to purchase additional shares. In addition, in February 2025, we purchased additional shares of the EMI’s convertible preferred stock for $0.3 million, and we entered into a loan agreement with the EMI for a revolving credit facility. The aggregate principal amount available under the facility is $2.0 million. The loans will incur interest at 12% per annum payable semiannually and are due and payable in February 2027. On February 27, 2025, we loaned the EMI $0.5 million under the revolving credit facility.

Purchases of debt securities and equity investments were $16.0 million and $19.4 million in the six months ended January 31, 2025 and 2024, respectively. Proceeds from maturities and sales of debt securities and redemptions of equity investments were $16.8 million and $31.2 million in the six months ended January 31, 2025 and 2024, respectively.

Financing Activities

In the six months ended January 31, 2025, we paid aggregate cash dividends of $0.10 per share on our Class A and Class B common stock. In the six months ended January 31, 2025, we paid aggregate cash dividends of $2.5 million. In March 2025, our Board of Directors increased our quarterly cash dividend on our Class A and Class B common stock to $0.06 per share from $0.05 per share.

We distributed cash of $50,000 and $59,000 in the six months ended January 31, 2025 and 2024, respectively, to the noncontrolling interests in certain of our subsidiaries.

Our subsidiary, IDT Telecom, Inc., or IDT Telecom, entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. As of July 15, 2024 and July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At January 31, 2025 and July 31, 2024, there were no amounts outstanding under this facility. In the six months ended January 31, 2025 and 2024, IDT Telecom borrowed and repaid an aggregate of $24.5 million and $30.6 million, respectively, under the facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the secured overnight financing rate published by the Federal Reserve Bank of New York plus 10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, 2026. IDT Telecom pays a quarterly unused commitment fee of 10 basis points on the average daily balance of the unused portion of the $25.0 million commitment. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of January 31, 2025, IDT Telecom was in compliance with all of the covenants.

In the six months ended January 31, 2024, we received cash from the exercise of stock options of $0.2 million for which we issued 12,500 shares of our Class B common stock. There were no stock option exercises in the six months ended January 31, 2025.

We have an existing stock repurchase program authorized by our Board of Directors for the repurchase of shares of our Class B common stock. In January 2016, the Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the six months ended January 31, 2025, we repurchased 217,052 shares of our Class B common stock for an aggregate purchase price of $9.9 million. In the six months ended January 31, 2024, we repurchased 135,261 shares of our Class B common stock for an aggregate purchase price of $3.2 million. At January 31, 2025, 4.2 million shares remained available for repurchase under the stock repurchase program.

In the six months ended January 31, 2025 and 2024, we paid $1.5 million and $15,000, respectively, to repurchase 32,022 and 654 shares, respectively, of our Class B common stock that were tendered by employees of ours to satisfy the employees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock and shares issued for bonus payments. Such shares were repurchased by us based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

Other Sources and Uses of Resources

From time to time, we consider spin-offs and other potential dispositions of certain of our subsidiaries. A spin-off may include the contribution of a significant amount of cash, cash equivalents, debt securities, and/or equity securities to the subsidiary prior to the spin-off, which would reduce our capital resources. There is no assurance that a transaction will be completed.

We intend to, where appropriate, make strategic investments and acquisitions to complement, expand, and/or enter into new businesses. In considering acquisitions and investments, we search for opportunities to profitably grow our existing businesses and/or to add qualitatively to the range and diversification of businesses in our portfolio. We cannot guarantee that we will be presented with acquisition opportunities that meet our return-on-investment criteria, or that our efforts to make acquisitions that meet our criteria will be successful.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

Foreign Currency Risk

Revenues from our international operations were 21% and 23% of our consolidated revenues in the three months ended January 31, 2025 and 2024, respectively, and 21% and 25% of our consolidated revenues in the six months ended January 31, 2025 and 2024, respectively. A significant portion of our revenues is in currencies other than the U.S. Dollar. Our foreign currency exchange risk is somewhat mitigated by our ability to offset a portion of these non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign currency exchange rate changes at the end of each reporting period is generally not material.

Investment Risk

We hold a portion of our assets in debt and equity securities, including hedge funds, for strategic and speculative purposes. At January 31, 2025 and July 31, 2024, the value of our debt and equity security holdings was an aggregate of $35.7 million and $35.0 million, respectively, which represented 6% and 6% of our total assets at January 31, 2025 and July 31, 2024, respectively. Investments in debt and equity securities carry a degree of risk and depend to a great extent on correct assessments of the future course of price movements of securities and other instruments. There can be no assurance that our investment managers will be able to accurately predict these price movements. The securities markets have in recent years been characterized by great volatility and unpredictability. Accordingly, the value of our investments may go down as well as up and we may not receive the amounts originally invested upon redemption.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of January 31, 2025.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the fiscal quarter ended January 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

Legal proceedings in which we are involved are described in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report.

Item 1A.

Risk Factors

Except as set forth below, there are no material changes from the risk factors previously disclosed in Item 1A to Part I of our 2024 Form 10-K.

Changes to immigrant populations could negatively impact certain of our businesses.

Certain of our businesses, particularly Boss Money and Boss Revolution, rely in large part on immigrant communities in the United States and elsewhere. Migration of immigrants and their spending patterns are affected by (among other factors) overall economic conditions, the availability of job opportunities, changes in immigration laws and their enforcement, including the potential for large scale deportations, restrictions on immigration and travel, and political or other events (such as civil unrest, war, terrorism, natural disasters, or public health emergencies or epidemics) that would make it more difficult for workers to migrate or work outside of the their countries of origin. Changes to these factors could materially and adversely affect our business, financial condition, results of operations, and cash flows.

We may incur costs in complying with, or face exposure from the failure to comply with, laws, regulation or initiatives regarding greenhouse gas emissions or reporting of our direct and indirect emissions.

Many U.S. states and foreign jurisdictions have enacted laws and regulation mandating certain reporting related to direct and indirect greenhouse gas emission by businesses operating in those areas. Our costs to comply with any legislation, regulations or initiatives may be significant and we could be exposed to fines and penalties if we do not comply with laws and regulations that apply to us.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to purchases by us of our shares during the second quarter of fiscal 2025:

	Total Number of Shares Purchased (1)		Average Price per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
November 1-30, 2024		—	$	—		—		4,366,072
December 1–31, 2024		164,033	$	48.11		156,301		4,209,771
January 1–31, 2025		23,037	$	46.29		23,037		4,186,734
Total		187,070	$	47.89		179,338

(1)

Total number of shares purchased includes shares of our Class B common stock that were purchased under our repurchase program, as well as shares of our Class B common stock that were tendered by employees of ours to satisfy the employees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock. Shares tendered by employees were repurchased by us based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

(2)	On January 22, 2016, our Board of Directors approved a stock repurchase program to purchase up to 8.0 million shares of our Class B common stock.

Item 3.

Defaults Upon Senior Securities

None

Item 4.

Mine Safety Disclosures

Not applicable

Item 5.

Other Information

None

Item 6.

Exhibits

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IDT CORPORATION

March 12, 2025	By:	/s/ SHMUEL JONAS
		Shmuel Jonas Chief Executive Officer

March 12, 2025	By:	/s/ MARCELO FISCHER
		Marcelo Fischer Chief Financial Officer

EX-31.1 2 ex31-1.htm

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Shmuel Jonas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of IDT Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 12, 2025

/s/ SHMUEL JONAS

Shmuel Jonas

Chief Executive Officer

EX-31.2 3 ex31-2.htm

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marcelo Fischer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of IDT Corporation;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 12, 2025

/s/ MARCELO FISCHER

Marcelo Fischer

Chief Financial Officer

EX-32.1 4 ex32-1.htm

EXHIBIT 32.1

Certification Pursuant to
18 U.S.C. Section 1350
(as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act Of 2002)

In connection with the Quarterly Report of IDT Corporation (the “Company”) on Form 10-Q for the quarter ended January 31, 2025 as filed with the Securities and Exchange Commission (the “Report”), I, Shmuel Jonas, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 12, 2025

/s/ SHMUEL JONAS

Shmuel Jonas

Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to IDT Corporation and will be retained by IDT Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 5 ex32-2.htm

EXHIBIT 32.2

Certification Pursuant to
18 U.S.C. Section 1350
(as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act Of 2002)

In connection with the Quarterly Report of IDT Corporation (the “Company”) on Form 10-Q for the quarter ended January 31, 2025 as filed with the Securities and Exchange Commission (the “Report”), I, Marcelo Fischer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 12, 2025

/s/ MARCELO FISCHER

Marcelo Fischer

Chief Financial Officer