IDT is in the middle of shifting its growth engine toward higher-margin businesses—NRS retail software and payments, digital remittances through BOSS Money, and AI-enabled cloud communications at net2phone. That strategy was already gaining traction before this release: third-quarter results showed rising profitability across all three businesses, while management had lifted FY26 Adjusted EBITDA guidance to $150–$152 million.
The quarter was operationally strong, but the headline EPS result missed expectations. Revenue reached $339.0 million, up 7%, versus published expectations of about $319 million, while GAAP EPS was $0.87 versus roughly $0.98 consensus. That makes this an earnings miss despite a clear revenue beat. (Consolidated highlights) The filing reports, “GAAP EPS: Increased to $0.87 from $0.67;” 〔0〕
| Measure | 4Q26 | Comparison / expectation |
|---|---|---|
| Revenue | $339.0M | +7% year over year; ~$319M expected |
| GAAP EPS | $0.87 | $0.67 prior year; ~$0.98 consensus |
| Non-GAAP EPS | $0.94 | $0.76 prior year |
| Adjusted EBITDA | $41.2M | +22% year over year |
| FY27 gross profit guidance | $545M–$555M | New outlook |
| FY27 Adjusted EBITDA guidance | $176M–$180M | New outlook |
The mix is improving faster than the consolidated revenue line suggests. NRS revenue rose 31% and Adjusted EBITDA rose 47%, with average monthly gross profit per retailer location up 22% to $383. Fintech also benefited from the shift toward digital remittances: digital transactions were 88.1% of volume, digital revenue rose 22%, and Fintech gross margin expanded 650 basis points. The filing says, “Average monthly GP per location increased 22% to $383 in 4Q26 from $315 in 4Q25, primarily reflecting growth in NRS Pay.”
NRS and Fintech are carrying the growth story, while traditional communications remains a drag on top-line momentum. Traditional Communications revenue increased only 2% in the quarter and declined 5% for the full year in operating income, although its Adjusted EBITDA remained roughly stable. That leaves IDT increasingly dependent on continued execution in NRS, BOSS Money, and net2phone rather than a broad-based recovery across the portfolio. (Segment results — Traditional Communications)
The FY27 outlook is materially better than the prior standing plan, but it is a profitability guide rather than a revenue breakout. IDT now expects FY27 gross profit of $545–$555 million and Adjusted EBITDA of $176–$180 million, versus FY26 Adjusted EBITDA of $154.6 million. That implies roughly 14%–16% EBITDA growth at the midpoint and extends the trajectory established by the earlier FY26 guidance raises. The filing says, “For FY 2027, IDT expects to again grow consolidated gross profit by double digits.”
Cash generation is the main qualifier to the upbeat profit picture. Reported fourth-quarter operating cash flow rose to $44.4 million, but adjusted operating cash flow excluding customer-deposit movements fell to $26.4 million from $37.1 million. For the full year, adjusted operating cash flow dropped to $60.9 million from $107.8 million, primarily because of settlement and prefunding timing at BOSS Money. (Cash Flow reconciliation) The filing says, “In FY 2026, net cash provided by operating activities decreased to $91.1million from $127.1million in FY 2025.”
Bottom line: IDT’s underlying business momentum is better than the EPS miss suggests, with NRS, digital remittances, and net2phone supporting a higher FY27 profit plan. But versus the immediate benchmark, the quarter is still a miss because earnings per share came in below consensus, and cash conversion weakened over the full year.
Read the original 8-K on SEC EDGAR ↗