IDT Corp Beats Q1 Estimates, But Muted Outlook Tempers Stock Gains
Strong growth in Fintech, Retail, and Cloud Communications segments was overshadowed by reaffirmed full-year guidance, leaving investors cautious.
IDT Corporation (NYSE: IDT) reported first-quarter earnings that surpassed analyst expectations, fueled by triple-digit operating income growth in its key fintech and cloud communications divisions. However, the company’s decision to simply reaffirm its full-year guidance put a damper on the positive results, leading to a subdued reaction from the market.
For the quarter ending October 31, the New Jersey-based telecommunications and payments provider posted non-GAAP earnings per share of $0.94, comfortably beating the consensus estimate of $0.88. Revenue came in at $322.8 million, also ahead of the anticipated $308.0 million. The results underscore the success of IDT's strategy to diversify beyond its traditional telecom roots into higher-growth technology sectors.
The standout performers were the company's emerging businesses. The Fintech segment, which includes the BOSS Money remittance service, saw its operating income soar by 97% compared to the year-ago quarter. The net2phone cloud communications division was even more impressive, with operating income jumping 94%. Meanwhile, the National Retail Solutions (NRS) unit, which provides point-of-sale systems to independent retailers, posted a robust 35% increase in operating income.
“Our growth engines, NRS, net2phone, and BOSS Money, continued to deliver outstanding results, significantly increasing their contributions to our consolidated bottom line,” said Shmuel Jonas, CEO of IDT Corporation, in a statement released Thursday.
Despite the strong operational performance, investors keyed in on the company's unchanged outlook. IDT reaffirmed its full-year fiscal 2026 adjusted EBITDA forecast to be in the range of $141 million to $145 million. The lack of an upward revision, which a strong beat would typically suggest, appeared to temper investor enthusiasm and cap potential share price gains following the announcement.
Shares of IDT, which have traded in a 52-week range of $44.63 to $71.05, closed at $50.29 ahead of the report. The company currently has a market capitalization of approximately $1.29 billion. The reaffirmation of guidance suggests that management may anticipate tougher comparisons, increased investment spending in its growth segments, or broader macroeconomic uncertainties in the coming quarters.
The results highlight a pivotal moment for IDT. The legacy Traditional Communications segment, while still generating cash, continues its managed decline. The future of the company clearly lies with its three growth pillars, which now represent an increasingly significant portion of its profitability. The NRS segment, in particular, has become a key driver, leveraging its network of over 20,000 point-of-sale terminals to offer advertising, data analytics, and payment processing services to C-stores and bodegas.
Similarly, the net2phone division is capitalizing on the global shift to unified communications as a service (UCaaS), competing with larger players by focusing on underserved small and medium-sized businesses. The BOSS Money remittance platform continues to expand its digital footprint in the competitive but vast international money transfer market.
For investors, the quarter presents a mixed picture. The underlying business performance demonstrates significant strength and successful execution in high-growth markets. However, the conservative guidance raises questions about the sustainability of this momentum through the rest of the fiscal year. Analysts with a 12-month price target of $80.00 will be watching closely to see if the company's cautious outlook is a sign of prudence or an early warning of slowing growth ahead.