Shares of IDT Corporation (IDT Quick QuoteIDT - Free Report) have gained 10.4% since the company reported its earnings for the quarter ended April 30, 2025. This compares to the S&P 500 Index’s 0.8% gain over the same time frame. Over the past month, the stock gained 12.4% compared with the S&P 500’s 3.1% rise.

IDT’s Financial Performance Snapshot

IDT reported solid third-quarter fiscal 2025 results, with consolidated revenues inching up 0.8% year over year to $301.9 million from $299.6 million. Gross profit rose 15.4% to $111.9 million from $97 million, pushing gross margin up 470 basis points (bps) to a record 37.1% from 32.4%. Income from operations jumped 132.6% to $26.6 million from $11.4 million, while adjusted EBITDA surged 57% to $32.2 million from $20.6 million.

GAAP earnings per share (EPS) climbed 290.9% to $0.86 from $0.22, while adjusted EPS surged 136.8% to $0.90 from $0.38. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Segment-level gains were broad-based. National Retail Solutions (NRS) revenues rose 21.1% to $31.1 million from $25.7 million, Fintech revenues advanced 22.5% to $38.6 million from $31.5 million, and net2phone revenues grew 6.4% to $21.9 million from $20.7 million, while the Traditional Communications segment witnessed a 5.2% revenue decline to $210.2 million from $221.7 million.

IDT’s Segmental Performance

At NRS, recurring revenue rose 22.9% to $29.4 million from $24 million, fueled by a 37.3% increase in Merchant Services and a 32.8% gain in SaaS fees. Advertising and Data revenue declined 12.3% due to risk-mitigation steps related to a large programmatic partner, though direct channel sales remained robust. Segment income from operations and adjusted EBITDA increased 29.3% and 28.6%, respectively. Gross profit rose 28.4% to $28.4 million from $22.1 million, with a margin expansion of 520 bps to 91.3% from 86.1%. NRS ended the quarter with 35,600 active POS terminals, up 17.6% from the year-ago period.

In the Fintech segment, driven by BOSS Money, transactions rose 27% to $6 million from $4.7 million, and revenues grew 24.7% to $34.4 million from $27.6 million. Digital channel growth outpaced retail, with a 32% increase in transactions and a 40% surge in digital send volume. The segment reported adjusted EBITDA of $5 million, up from $0.2 million a year ago, and income from operations was $4.3 million against a $0.6 million loss.

net2phone’s performance was steady, with subscription revenue up 7.4% (11% in constant currency) to $21.5 million from $20 million. The business maintained disciplined spending, enabling a 188% increase in income from operations to $1.4 million from $0.5 million and a 50.2% rise in adjusted EBITDA to $3.2 million from $2.1 million. Its adjusted EBITDA margin expanded to 15% from 10%.

Traditional Communications, despite a 5.2% revenue decline to $210.2 million, saw a 5.3% increase in gross profit to $43.4 million from $41.2 million, aided by favorable mix and lower selling, general and administrative (SG&A) expenses. Income from operations grew 39.2% to $17.3 million from $12.5 million, and adjusted EBITDA rose 30.1% to $19.3 million from $14.9 million.

Other Key Business Metrics of IDT

The gross margin of 37.1% was a record high, reflecting strong product mix and operational efficiencies. NRS’ monthly average recurring revenue per terminal increased 3% year over year to $279 from $271. The company generated $75.7 million in operating cash flow in the quarter compared with $9.5 million in the year-ago period, aided by timing benefits related to BOSS Money’s remittance cycle. Excluding changes in customer fund deposits, operating cash flow was $66.1 million compared with $8.2 million in the year-ago quarter.

IDT’s Management Commentary

CEO Shmuel Jonas characterized the quarter as “solid,” noting seasonal softness compared to the fiscal second quarter but emphasizing broad-based bottom-line growth. Jonas highlighted IDT’s ability to scale its growth businesses while extracting strong cash contributions from legacy segments. He also emphasized product innovation efforts at NRS, such as integrating POS systems with food delivery platforms like DoorDash, and mentioned the pilot rollout to about 100 retailers already generating over 2,000 weekly delivery orders.

For BOSS Money, Jonas noted the shift to larger, less frequent transactions and said pricing strategies are being refined to optimize profit per transaction. On net2phone, he underscored the potential of new AI-powered offerings — including virtual agents and a forthcoming service internally dubbed “Coach” — as future revenue drivers.

Factors Influencing IDT’s Headline Numbers

Growth in recurring revenue streams and expanding customer bases drove strong top-line and profitability gains. At NRS, the rise in payment processing accounts and improved monetization per account supported the segment’s performance. The drop in Advertising & Data revenue stemmed from IDT’s decision to reduce exposure to a large programmatic partner, accompanied by a $1.4 million bad debt provision and $0.5 million in one-time compensation costs related to deferred stock units.

In Fintech, transaction growth and a 40% increase in digital send volume at BOSS Money helped boost profitability. Customer behavior shifted toward larger remittance amounts per transaction, and management is testing pricing strategies to capitalize on this trend.

Cost discipline was a key theme in net2phone and Traditional Communications, with SG&A spending falling in both. These savings contributed to significant margin expansion despite revenue pressures in the legacy communications business.

Guidance Provided by IDT’s Management

Management reiterated its full-year fiscal 2025 guidance. CFO Marcelo Fischer reaffirmed that IDT remains on track to double its first-half adjusted EBITDA of $63 million to reach $126 million for the fiscal year. Fiscal 2026 guidance is expected to be issued during the fourth quarter of fiscal 2025 earnings release.

IDT’s Other Developments

IDT executed a modest level of open market share repurchases during the quarter, but significantly repurchased $6 million in vested employee-owned shares to cover tax obligations. Additionally, the company disclosed that it had acquired a small restaurant-focused technology company named Lucci under the NRS umbrella. Management emphasized a disciplined approach to M&A and noted that additional deals are under evaluation.

IDT declared a quarterly dividend of $0.06 per share, payable June 18, 2025, to shareholders of record on June 9.