IDT jumps on earnings beat, guidance raise and dividend hike
Telecommunications company boosts FY26 EBITDA outlook after strong fintech and net2phone segment performance
IDT Corporation shares advanced Tuesday after the telecommunications and payments company reported stronger-than-expected quarterly earnings, raised its full-year outlook, and increased its dividend payout.
The Newark, New Jersey-based company reported non-GAAP earnings per share of $1.00 for its fiscal second quarter, beating analyst estimates of $0.87 by 14.9%. Revenue reached $320.5 million, exceeding Wall Street expectations of $302 million and representing 6% year-over-year growth from $303.3 million in the prior year period.
"We delivered record quarterly gross profit, gross profit margin, Adjusted EBITDA and Non-GAAP EPS in the quarter," the company said in its earnings announcement, highlighting segment-level strength across its business lines.
The company raised its fiscal 2026 guidance for consolidated Adjusted EBITDA to a range of $147 million to $149 million, up from the previous outlook of $141 million to $145 million. At the midpoint, this represents 12% growth from fiscal 2025 Adjusted EBITDA of $131.7 million.
IDT's board of directors announced a 17% increase in the annual dividend to $0.28 per share, up from $0.24. A quarterly cash dividend of $0.07 per share was declared payable on March 31 to stockholders of record as of March 19.
The stock was trading up about 2% on the news, adding to gains for the year. The company currently has an analyst target price of $80, representing significant upside from current levels around $51.65. IDT's market capitalization stands at approximately $1.29 billion.
Segment performance drove the earnings beat, with income from operations increasing across all three core business units. The National Retail Solutions (NRS) segment saw operating income rise 12% to $10.2 million, while revenue increased 19% to $39.4 million. Active POS terminals grew 12% to 38,900, and payment processing accounts increased 18% to 28,100.
The fintech segment delivered the strongest operational growth, with income from operations jumping 32% to $4.1 million. Adjusted EBITDA in the segment surged 44% to $5.6 million. BOSS Money transactions increased 13% to 6.4 million, with digital channel transactions up 17% to 5.5 million.
The net2phone cloud communications business posted operating income of $2.2 million, a 96% increase from $1.1 million in the prior year period. Subscription revenue grew 12% to $23.4 million, and seats increased 6% to 435,000.
Traditional communications, the company's legacy business, continued to face pressure, with income from operations declining 21% to $14.3 million, though revenue still managed a 2% increase to $216.1 million.
During the quarter, IDT repurchased 149,000 shares for $7.4 million. For the first half of fiscal 2026, total stock buybacks reached 308,000 shares for $15 million, reflecting management's confidence in the business trajectory.
The company's gross profit margin expanded 88 basis points to 37.8%, while Adjusted EBITDA increased 9% to $38.0 million from $34.9 million in the year-ago quarter. GAAP earnings per share rose to $0.84 from $0.80.
IDT has been transforming from a traditional telecommunications provider into a diversified communications and payments platform. The stronger performance from its fintech and cloud communications segments suggests this strategic pivot is gaining momentum, even as the legacy business faces ongoing margin pressure.