IDT closed fiscal 2026 with its strongest quarter of the year. Non-GAAP EPS reached $0.94 for the July quarter, 23.7% earnings growth from a year ago, on revenue of $338.98 million, up 7.1%. There was no consensus estimate to measure against, so the more useful benchmark is IDT's own guidance. Full-year Adjusted EBITDA of $154.6 million beat the most recent $150–152 million target and far exceeded the original $141–145 million outlook set in the first quarter. The top line also accelerated. Quarterly revenue growth improved to 7% from 5% in the fiscal third quarter, and full-year growth rose to 5% from 2% in fiscal 2025. Management then guided fiscal 2027 Adjusted EBITDA to $176–180 million, roughly 15% growth at the midpoint, extending a pattern of repeatedly raising targets. The central tension is that the headline strength is real, but a few details make the quarter look cleaner than the underlying run-rate.
The mix shift toward higher-margin businesses is doing the heavy lifting. Consolidated gross margin expanded 360 basis points to 39.8%, and income from operations jumped 52% to $33.2 million. That operating income comparison is flattered by a year-ago quarter burdened with $5.9 million of other operating expense. Growth segments produced 53% of fiscal 2026 Adjusted EBITDA, up from 46% a year earlier. GAAP EPS rose to $0.87 from $0.67 even though the tax provision climbed sharply against a prior-year period that included a $3.3 million valuation-allowance benefit. The bigger quality flags are cash and compensation:
- **Weaker cash conversion:** Excluding customer deposits, adjusted operating cash flow fell to $26.4 million from $37.1 million in the quarter, and to $60.9 million from $107.8 million for the year. Management blamed working capital tied to BOSS Money settlement assets and disbursement prefunding, which together absorbed $75 million.
- **Higher stock-based compensation:** Stock comp more than tripled to $10.5 million for the year. It is excluded from Adjusted EBITDA and non-GAAP EPS.
Neither issue breaks the story, but both deserve scrutiny.
NRS was the standout. Revenue rose 31% to $45.0 million, Adjusted EBITDA rose 47%, and average monthly gross profit per location climbed 22% to $383 on growth in NRS Pay. Advertising and Data revenue swung to 49% growth after declining earlier in the year, helped by the Encore Digital acquisition. That line is lumpy: it was only $5.7 million in the third quarter versus $10.1 million in the fourth. The call also acknowledged that NRS's 94.8% gross margin benefited from a one-time tariff refund, and that underlying margin was in line with recent quarters. Net terminal additions have slowed amid POS competition from players such as Toast, and management plans to hire significantly more salespeople to reaccelerate network growth. IDT also replaced its per-terminal revenue metric with new retailer-location KPIs. That change is defensible, but it breaks easy continuity with prior disclosures.
The fintech segment showed the benefits of a regulatory shift working in IDT's favor. The federal tax on retail remittances, in effect since January, accelerated migration to digital channels. BOSS Money's digital share of transactions reached 88.1%, digital revenue grew 22%, and digital send volume grew 38%. Segment gross margin expanded 650 basis points to 65.6%. Two offsets are worth noting:
- **Pricing:** Revenue per transaction slipped 2% to $5.68.
- **Retail decline:** The release shows BOSS Money retail-channel revenue down 17%, while the call cited a 70% drop in retail agent remittance revenue. The steeper call figure likely reflects a narrower definition, but investors should note the discrepancy.
The new products extend the franchise's optionality rather than its current earnings power. These include WhatsApp transfers, a U.S. digital wallet, an international app with a stablecoin-backed wallet, and a credit-building card.
net2phone is the clearest example of decelerating growth beneath a good profit number. Subscription revenue growth slowed to 10% from 12% in the third quarter, and only 7% on a constant-currency basis. Management also budgeted fiscal 2027 EBITDA for only a small increase as it reinvests in AI, even as ARR approaches $100 million. Traditional Communications remains a durable cash contributor, with Adjusted EBITDA up 1% for the year. Full-year gross profit fell 4%, however, and BOSS Revolution calling revenue declined another 10% in the quarter.
Market context is thin for this report. No sentiment reading or current price was available. Shares opened at $56.99 after the June report, near the current 200-day moving average of $55.84, so the stock's reaction to this release will be the real test of how much of the guidance streak was already priced in. The debt-free balance sheet and $271.9 million in cash and investments give management flexibility. Buybacks, however, slowed to $2 million in the quarter.
The bottom line is that IDT delivered accelerating revenue, a clean beat against its own raised targets, and credible 15% EBITDA growth guidance built on NRS and digital remittances. Investors should discount the fourth-quarter NRS margin for the tariff refund, watch net2phone's slowing growth, and demand better cash conversion from BOSS Money's expanding balance sheet before treating the record quarter as the new baseline.