0001493152-26-009820
SEC filingIDT Corporation reported solid Q2 2026 results with revenues of $320.5 million, representing a 5.7% increase from $303.3 million in Q2 2025. Gross profit grew 8.2% to $121.3 million, though operating income declined 3.8% to $27.2 million due to higher operating expenses. Net income attributable to IDT Corporation was $20.9 million, a 3.4% increase from $20.3 million in the prior year quarter. The company generated $28.2 million in operating cash flow but used $21.4 million in investing activities and $17.9 million in financing activities, resulting in a net decrease of $4.9 million in cash. Key drivers included growth across all business segments, particularly National Retail Solutions (19.3% revenue growth) and Fintech (11.8% revenue growth). The company maintained strong liquidity with $210.2 million in cash and cash equivalents and total assets of $678.3 million.
IDT Corporation delivered solid financial results for Q2 2026, with revenues of $320.5 million representing a 5.7% increase from $303.3 million in Q2 2025. Gross profit improved to $121.3 million (up 8.2% YoY), though operating income declined to $27.2 million (down 3.8% YoY) due to increased operating expenses, particularly selling, general and administrative expenses which rose to $78.8 million from $70.7 million. Net income attributable to IDT Corporation was $20.9 million, a 3.4% increase from $20.3 million in the prior year quarter. Earnings per share were $0.84 basic and diluted, compared to $0.81 basic and $0.80 diluted in Q2 2025. The company maintained strong liquidity with $210.2 million in cash and cash equivalents and total assets of $678.3 million as of January 31, 2026.
Revenue growth was broad-based across all four business segments. National Retail Solutions led with 19.3% growth to $39.3 million, driven by point-of-sale terminal sales, payment processing, and software subscriptions. Fintech revenue increased 11.8% to $41.2 million, primarily from BOSS Money international money remittance services. net2phone revenue grew 11.2% to $23.9 million, supported by cloud-based communications and contact center solutions. Traditional Communications, the largest segment, saw modest 1.9% growth to $216.1 million. Geographically, 78% of revenue came from the United States ($249.5 million), with the remaining 22% from international operations ($70.9 million), primarily the United Kingdom ($44.8 million).
Gross margin improved to 37.8% from 37.0% in the prior year quarter, reflecting favorable revenue mix and cost management. However, operating margin declined to 8.5% from 9.3% due to increased operating expenses. Selling, general and administrative expenses rose to 24.6% of revenue from 23.3%, while technology and development expenses increased to 4.4% of revenue from 4.2%. Stock-based compensation included in operating expenses was $4.3 million for the quarter. The effective tax rate for the six months ended January 31, 2026 was 23.4%, compared to 25.6% for fiscal 2025, reflecting differences in taxable income across jurisdictions.
Operating activities generated $28.2 million in cash flow, driven by net income of $22.8 million and positive working capital changes. Investing activities used $21.4 million, primarily for capital expenditures ($12.0 million) and purchases of debt and equity securities ($26.3 million). Financing activities used $17.9 million, including dividend payments ($3.0 million), stock repurchases ($15.0 million), and distributions to noncontrolling interests ($50K). The balance sheet remained strong with total assets of $678.3 million, including current assets of $572.8 million. Total liabilities were $310.1 million, with current liabilities of $308.4 million primarily consisting of customer funds deposits ($128.1 million) and accrued expenses ($90.0 million). Total equity was $356.4 million.
The company continues to execute its strategic priorities across all business segments. Management noted that international operations represented 22% of consolidated revenues, with foreign currency exchange risk mitigated by offsetting expenses in the same currencies. The company maintains a $25.0 million revolving credit facility with no amounts outstanding as of January 31, 2026. On March 9, 2026, the Board declared a cash dividend of $0.07 per share payable on March 31, 2026. Risk factors include potential sales tax liabilities following the Wayfair decision, ongoing regulatory fee audits, and market risks associated with $41.2 million in debt and equity security holdings. The company concluded that disclosure controls and procedures were effective as of January 31, 2026.