IDT Corporation ((IDT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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IDT Corporation’s recent earnings call painted a picture of a company experiencing robust growth alongside notable challenges. The sentiment was balanced, highlighting record achievements in adjusted EBITDA, driven by NRS and BOSS Money’s digital expansion, while acknowledging hurdles such as declining advertising revenue and increased churn in NRS terminals.
Record Consolidated Adjusted EBITDA Growth
IDT Corporation reported a remarkable 43% increase in consolidated adjusted EBITDA, reaching a record $129 million for fiscal year 2025. This growth underscores the company’s strong fiscal performance and strategic execution across its business segments.
NRS Merchant Services and SaaS Revenue Growth
The NRS merchant services and SaaS fee revenue were significant contributors to the company’s top-line growth, with adjusted EBITDA rising by 37% to $34.2 million for the full fiscal year. This growth highlights the success of IDT’s focus on expanding its merchant services and software offerings.
BOSS Money Digital Channel Expansion
BOSS Money’s digital channel has become a major driver of remittance volume, now accounting for over 80% of transactions. The fourth quarter saw a 41% increase in cash sent and a 34% increase in transactions, showcasing the effectiveness of IDT’s digital strategy.
net2phone AI Agent Development
IDT is making strides in AI integration, with approximately 1 in 10 sales conversations now involving an AI agent. The company plans to transition to a usage-based revenue model, which is expected to generate significant revenue at high margins.
Strong Financial Position
IDT’s financial health remains robust, with cash, cash equivalents, and current investments rising to $254 million. This strong cash generation across all segments provides a solid foundation for future growth initiatives.
NRS Advertising and Data Revenue Decline
Despite overall growth, NRS faced an 8% year-over-year decline in advertising and data revenue in Q4, attributed to the loss of a programmatic advertising partner. This challenge highlights the volatility in the advertising sector.
Challenges in Traditional Communications Segment
The Traditional Communications segment is expected to face declines in gross profit and adjusted EBITDA, driven by anticipated decreases in BOSS Revolution Calling and IDT Global businesses. This underscores the challenges in maintaining growth in legacy segments.
Increased Churn in NRS Terminals
NRS experienced increased churn due to factors such as immigration enforcement, heightened competition, and card scheme compliance issues. These challenges indicate the competitive and regulatory pressures facing the retail sector.
Forward-Looking Guidance
Looking ahead, IDT Corporation projects a 7% to 10% growth in adjusted EBITDA for fiscal 2026, aiming for between $141 million and $145 million. The company plans to leverage AI, enhance digital platforms, and explore strategic acquisitions to sustain its growth trajectory.
In summary, IDT Corporation’s earnings call reflects a company navigating both significant achievements and notable challenges. With strong growth in digital channels and AI integration, alongside hurdles in advertising and traditional communications, IDT is poised to continue its strategic evolution in the coming fiscal year.