IDT 10-K & 10-Q changes, risk factors and insider trading

Cyberattacks, including the use of malware, ransomware, computer viruses, denial of servicesservice attacks, credential harvesting, phishing and other social engineeringengineering, business email and collaboration-platform compromise, impersonation of our personnel, brands or systems (including through the use of AI-generated voice, video or text, or “deepfakes”), exploitation of software vulnerabilities and misconfigurations, and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems and those of our suppliers, vendors and other service providers, could have an adverse effect on our business. Cyberattacks may cause equipment failures, loss of information (including sensitive personal information of customers or employees or valuable technical and marketing information), or disruptions to our or our customers’ operations. Furthermore, ransomware could potentially deny the use of our systems until a ransom is paid. Threat actors also increasingly target our customers, retailers, agents and business partners by impersonating us, our personnel or our systems, including through third-party messaging and collaboration platforms and spoofed websites, in order to induce fraudulent payments, harvest credentials or divert funds. Such schemes can harm our customers and partners, generate customer claims and chargebacks, and damage our reputation and brands even where our own networks and systems have not been compromised, and our ability to detect and disrupt them often depends on the cooperation of third-party platform providers, financial institutions and law enforcement. Cyberattacks against companies, including us, have increased in frequency, scope, and potential harm in recent years. The increasing availability of generative AI tools has lowered the cost and increased the scale, speed and credibility of social engineering and fraud campaigns, and threat actors, including organized criminal groups and state-sponsored or state-affiliated actors, are increasingly well-resourced and persistent. They may occur alone or in conjunction with physical attacks, especially where disruption of service is an objective of the attacker. The development and maintenance of systems to prevent such attacks is costly and requires ongoing monitoring and updating to address their increasing prevalence and sophistication. While, to date, we have not been subject to cyberattacks that, individually or in the aggregate, have been material to our operations or financial condition, the preventive actions we take to reduce the risks associated with cyberattacks, including protection of our systems and networks, may be insufficient to repel or mitigate the effects of a cyberattack in the future.

The inability to operate or use our networks and systems or those of our suppliers, vendors, and other service providers because of cyberattacks, even for a limited period of time, may result in significant expenses to us and/or a loss of revenue and market share. The costs associated with a major cyberattack on us could include expensive incentives offered to existing customers and business partners to retain their business, increased expenditures on cybersecurity measures and the use of alternate resources, lost revenues from business interruption, and litigation. Further, certain of our businesses, such as those offering cloud services to business customers, could be negatively affected if our ability to protect our own networks and systems is called into question because of a cyberattack. In addition, a compromise of security or a theft or other compromise of valuable information, such as financial data and sensitive or private personal information, could result in lawsuits and government claims, investigations, or proceedings. The costs of responding to a significant cybersecurity incident could also include forensic investigation, legal, notification, credit monitoring and public relations expenses, regulatory fines and penalties, and the cost of remediating vulnerabilities and restoring systems, which may not be covered, or fully covered, by insurance. Any of these occurrences could damage our reputation, adversely impact customer and investor confidence and result in a material adverse effect on our results of operation or financial condition.

Certain of our businesses, particularly BossBOSS Money’Money, BossBOSS Revolution and IDT Digital Payments, rely in large part on immigrant communities in the United States and elsewhere. Migration of immigrants and their spending patterns are affected by (among other factors) overall economic conditions, the availability of job opportunities, changes in immigration laws and their enforcement, including the potential for large scale deportations, restrictions on immigration and travel, and political or other events (such as civil unrest, war, terrorism, natural disasters, or public health emergencies or epidemics) that would make it more difficult for workers to migrate or work outside of the their countries of origin. Changes to these factors could materially and adversely affect our business, financial condition, results of operations, and cash flows.

To be successful, we need to continue to have available, for our and our customers’ use, a high capacity, reliable and secure network. We face the risk, as does any company, of a security breach, whether through cyberattack, malware, computer viruses, sabotage, or other significant disruption of our IT infrastructure. As such, there is a risk of a security breach or disruption of the systems we operate, including possible unauthorized access to our and our customers’ proprietary or classified information. We are also subject to breaches of our respective networks resulting in unauthorized utilization of our services or products, which subject us to the costs of providing those products or services, which are likely not recoverable. The secure maintenance and transmission of our and our customers’ information is a critical element of our operations. Our information technology and other systems that maintain and transmit customer information, or those of service providers or business partners, may be compromised by a malicious third-party penetration of our network security, or that of a third-party service provider or business partner, or impacted by advertentdeliberate or inadvertent actions or inactions by our employees,employees or contractors, or those of a third-party service provider or business partner. As a result, our or our customers’ information may be lost, disclosed, accessed, or taken without our or our customers’ consent, or our product and service may be used without payment.

We have developers, product development personnel, other employeesemployees, consultants and senior management in different countries, and some business activities may be concentrated in one or more geographic areas. As a result, our ability to design, develop or sell products and services may be affected by:

We have attempted to control our operating expenses by operating in foreign countries such as Poland, Belarus, Guatemala, Costa Rica, Georgia, Dominican Republic and Israel and we may in the future expand our reliance on offshore labor to other countries. Our employees in Poland, Belarus, Georgia and Israel primarily help develop, test, and maintain certain of our technology. Our labor sourcesources in Guatemala, Costa Rica and the Dominican Republic primarily perform certain call center, administrative, operational and customer acquisition functions. We also have significant operations in Brazil, Uruguay, and Argentina as a result of net2phone’s growth.

Our technology and development (“T&D”) may be adversely affected by ongoing developments in Belarus and Ukraine.

Further, our BelarussianBelarusian T&D personnel could be impacted by retaliatory actions taken by third parties related to actual or perceived Belarussian Belarusian actions in support of the invasion, including cyberattacks.

Our primary exposure to movements in foreign currency exchange rates relates to non–U.S. dollar–denominated revenues and operating expenses. The strengthening of foreign currencies relative to the U.S. dollar may increase our costs denominated in those currencies, thus adversely affecting our earnings. The weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of our foreign currency–denominated revenues and earnings and could lead us to raise international pricing, potentially reducing demand for our products and services. In some circumstances, for competitive or other reasons, we may decide not to raise international pricing to offset the U.S. dollar’s strengthening, which would adversely affect the U.S. dollar value of our foreign currency–denominated revenue and earnings.

Changes to rates by our suppliers and increasing regulatory charges, tariffs or excise taxes may require us to raise prices, which could adversely affect our financial resultresults and business.

Our upstream carriers, suppliers and vendors may increase their prices thus directly impacting our direct cost of revenues, which would affect our earnings. Future changes in tariffs by regulatory agencies or application of tariff requirements to currently un-tariffed products or services could affect the price and sales of our products for a certain set of customers. Changes in our underlying direct costs of revenues may cause us to increase the rates we charge our customers, which could make us less competitive and impact our sales and retention of existing customers. On July 4, 2025, the One Big Beautiful Bill Act imposed a one percent excise tax on certain remittance transfers thattransfers, willwhich taketook effect for transfers made after December 31, 2025. The imposition of these or similar excise taxes could adversely affect our business and financial condition.

NRS competes in the POS market that is characterized by vigorous competition, changing technology, evolving industry standards, changing customer needs, and frequent introductions of new products and services. We expect competition to intensify in the future as existing and new competitors introduce new services or enhance existing services. NRS competes against many companies to attract customers, and some of these companies have greater financial resources and substantially larger bases of customers than NRS does, which may provide them with significant competitive advantages. These companies may devote greater resources to the development, promotion, and sale of products and services, may achieve economies of scale due to the size of their customer bases,bases and they could and may more effectively introduce their own innovative products and services that adversely impactsimpact NRS’ growth. If some or all of NRS’ competitors focus additional resources on NRS’ target markets, NRS’ growth may slow, or we may lose customers due to the competition.

NRS may also face pricing pressures from competitors, which may result in the need for NRS to alter the pricing that it offers and could reduce our profitability. Responding to competition may also require NRS to increase its investment in product development, sales and marketing, or to increase the compensation it pays to its distributors and sales agents, any of which could reduce our margins.

NRS’ strategy includes increasing its revenues from brand advertising. Brands may not do business with NRS or may reduce the amounts they are willing to spend to advertise if NRS does not deliver ads, and other commercial content and marketing programs in an effective manner, or if they do not believe that their investment in advertising with NRS will generate a competitive return relative to other alternatives. NRS’ ability to increase the number of brands that use its brand advertising, and ultimately to generate advertising and marketing services revenues, depends on several factors, many of which are outside of our control. If NRS fails to increase advertising on its platform, our business could be adversely affected. NRS’ advertising revenue also depends on the effective rates, or CPMs, that it realizes for its inventory. CPMs across the digital advertising industry declined during fiscal 2026, in part because leading streaming services launched ad-supported tiers that substantially expanded the supply of digital advertising inventory, and NRS’ Advertising & Data revenue declined in fiscal 2026 as compared with fiscal 2025 as a result of those rate declines and the loss of a demand partner that ceased operations. NRS sells a substantial portion of its inventory through programmatic platforms and a limited number of demand partners, and the loss of, or a reduction in spending by, any of them could materially reduce NRS’ advertising revenue. In addition, our plans to improve NRS’ advertising results depend in part on our ability to combine our first-party transaction data with our advertising inventory and on our successful integration of OnCore Digital, and we may not realize the benefits we expect on the timetable we expect or at all.

NRS’ success will depend, in part, on its ability to develop new technologies and to adapt to technological changes and evolving industry standards. New services and technologies may be superior to, impair, or render obsolete the POS products and services that NRS currently offers or the technologies NRS currently uses to provide them. Incorporating new technologies into NRS’ POS products and services may require substantial expenditures and take considerable time, and NRS may not be successful in realizing a return on these development efforts in a timely manner or at all. NRS’ ability to develop new products and services may be inhibited by industry-wide standards, existing and future laws and regulations, resistance to change from its customers, or third parties’ intellectual property rights. If NRS is unable to provide enhancements and new features for its products and services or to develop new products and services that achieve market acceptance or that keep pace with rapid technological developments and evolving industry standards, our business would be materially and adversely affected. NRS’ recent product initiatives include premium software tiers, direct integrations with online ordering and delivery platforms, digital couponing and product data scan programs, and offerings designed for adjacent retail verticals. These initiatives require investment, including hiring in advance of commercial launch, and may not achieve the adoption, revenue or returns we expect.

net2phone depends on several third-party providers to provide service to maintain its operations. net2phone does not have control over these providers, and some of these providers are also its competitors. net2phone may be subject to interruptions or delays in their service and its reputation and business may be harmed. The failure of any of these third party service providers to properly maintain services may result in negative consequences to net2phone, including but not limited to: (i) a loss of customers, (ii) adverse impact on its reputation, (iii) negative publicity, (iv) negative impact on its ability to acquire customers, (v) negative impact on its revenue and profitability, (vi) potential law suitslawsuits for not reaching emergency E-911 services, and (vii) potential law suitslawsuits for loss of business and loss of reputation.

E-911 and other emergency service providers. net2phone maintains an agreement with an E-911 provider to assist it in routing and terminating emergency calls directly to an emergency service dispatcher at the public-safety answering point, or PSAP, in the customer’s registered location. net2phone also contractcontracts with a provider for the national call center that operates 24 hours a day, seven days a week to receive certain emergency calls and with several companies that maintain PSAP databases for the purpose of deploying and operating E-911 services. The dispatcher will have automatic access to the customer’s telephone number and registered location information. If a customer moves their service to a new location, the customer’s registered location information must be updated and verified by the customer. Until that takes place, the customer will have to verbally advise the emergency dispatcher of his or her actual location at the time of an E-911 call. This can lead to delays in the delivery of emergency services. Interruptions in service from these vendors could also cause failures in net2phone’s customers’ access to E-911 services and expose it to liability.

net2phone primarily sells Polycom, Yealink and Grandstream-branded desktop devices, although,although it supports other third-party devices as well. These desktop devices are being manufactured by vendors in China. Recent supply-chain challenges in China and global ramifications of supply-chain difficulties, the U.S. trade war with China, including trade protection measures such as tariffs, and the effects of any new wave of COVID-19 infections or another pandemic may cause disruptions in obtaining its desktop devices. This may increase pricing, slow delivery times or may force net2phone to find other third-party manufacturers for its branded desktop devices.

Selling to larger enterprise customers also contains inherent risks and uncertainties. The loss of a key customer or the failure of some to renew or to continue to recommend net2phone’s products may have a material negative impact on its results. net2phone has a limited history of selling its services to larger businesses and may experience challenges in configuring and providing ongoing support for the products it sells to large customers. Larger customers’ networks are often more complex than those of smaller customers, and the configuration of services for these customers usually requires customer assistance. There is no guarantee that the customer will make available to net2phone the necessary personnel and other resources for a successful configuration of services. Lack of assistance from the customers or lack of local resources may prevent net2phone from properly configuring its services for these customers, which can in turn adversely impact the quality of services that it delivers over its customers’ networks, and/or may result in delays in the implementation of its services and impact the quality and ability to continue to provide the services. This could also create a public perception that net2phone is unable to deliver high qualityhigh-quality service to its customers, which could harm its reputation. In addition to the foregoing, larger customers tend to require higher levels of customer service and individual attention, which may increase net2phone’s costs for implementing and delivering services.

Most of our telecommunications’telecommunications traffic is terminated through third-party providers. To support our minutes of use demand and geographic footprint, we may need to obtain additional termination capacity or destinations. We may not be able to obtain sufficient termination capacity from high-quality carriers to particular destinations or may have to pay significant amounts to obtain such capacity. This could result in our not being able to support our minutes of use demands or in higher cost-per-minute to particular destinations, which could adversely affect our revenues and profits.

Risk Risks Related to Our Financial Condition

At July 31, 2025,2026, we had cash, cash equivalents, debt securities, and current equity investments of $260.4$271.9 million.million (excluding restricted cash and cash equivalents). Debt securities and equity investments carry a degree of risk, as there can be no assurance that we can redeem them at any time and that our investment managers will be able to accurately predict the course of price movements and, in general, the securities markets have in recent years been characterized by great volatility and unpredictability. As a result of these different market risks, our holdings of cash, cash equivalents, debt securities, and equity investments could be materially and adversely affected.

Intellectual Property,Changes Tax, Regulatory, and Litigation Risks Changes in national policy, governmental actions related to tariffs or international trade agreements, as well as shifts in social, political, regulatory, and economic conditions or laws and policies governing foreign trade, manufacturing, development, and investment in the regions where we operate, can significantly impact our business. Such changes could lead to negative sentiments towards us, potentially depressing economic activity or restricting access to suppliers or customers and thereby have a material adverse effect on our business, results of operations and outlook.

We may incur costs in complying with, or face exposure from the failure to comply with, laws, regulationregulations or initiatives regarding greenhouse gas emissions or reporting of our direct and indirect emissions.

Several states have either passed (California) or are drafting (e.g.e.g., Washington, New York, Illinois, and Minnesota) what is being referred to as “sustainability legislation.” This class of legislation generally requires companies generating certain levels inof annual revenue (either globally or in the relevant state) and who have a presence in the relevant state to report data on the impact of the company on the environment, including as to direct and indirect greenhouse gas emissions or other factors believed to impact climate. Each company that meets the requirements will be required to report the data to a state regulator and may also be required to post the data online. Significant monetary penalties may apply to companies that fail to report in a timely manner. We believe that we will be required to report under the California legislation, and may also be subject to other states’ legislation, if passed. We are currently evaluating the resources necessary to comply with the law. While, barring unforeseen circumstances, we anticipate meeting the requirements in a timely manner, there can be no assurance that we will do so.

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed under Item 1A to Part I “Risk Factors” in this Annual Report. The forward-looking statements are made as of the date of this Annual Report, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our periodic and current reports on Forms 10-Q and 8-K.

Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting estimates are estimates made in accordance with U.S. GAAP that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Our critical accounting estimates include those related to goodwill impairment testing, valuation of long-lived assets, allowance for credit losses, and income taxes, sales taxes, and regulatory agency fees.taxes. See Note 1 to the Consolidated Financial Statements in Item 8 to Part II of this Annual Report for a complete discussion of our significant accounting policies.

For our annual goodwill impairment testtests as of May 1, 2026 and 2025, we performed qualitative assessments for all of our reporting units that indicated that it was more likely than not that the fair values of our reporting units exceeded their respective carrying values and, therefore, did not result in anany impairment.impairments.

Our allowance for credit losses was $9.1$6.9 million and $6.4$9.1 million at July 31, 20252026 and 2024,2025, respectively,respectively. The decrease was partially due to anthe increasewrite-off inof creditaged lossesnet2phone trade accounts receivable and the related to ads and data.allowance. The allowance as a percentage of gross trade accounts receivable increased decreased to 10.2% at July 31, 2026 from 17.5% at July 31, 2025 from 13.1% at July 31, 2024 because, at July 31, 20252026 compared to July 31, 2024,2025, gross trade accounts receivable increased 7.0%30.3% and the allowance increaseddecreased 43.2%.23.7%. The most significant increase in the trade accounts receivable balance at July 31, 2025 2026 compared to July 31, 20242025 was in NRS.NRS, due to trade accounts receivable generated by the post-acquisition operations of NRS OnCore, the entity through which the Company operates the business acquired from Oncore Digital (see Note 2 to our Consolidated Financial Statements).

ForWe ourmaintain an allowance for credit losses on our trade accounts receivable, we record an expensereceivable based on a forward-looking current expected credit loss model("CECL") tomodel. maintainIn ourestimating allowance forexpected credit losses.losses, Wewe consider the probability of recoverability of accounts receivable based on pasthistorical write-off experience, consideringnet of recoveries, current collection trendstrends, the aging of accounts receivable, and general economic factors, including bankruptcy rates. WeAllowances alsogenerally consider future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks are assessed based on historical write-offs, net of recoveries,increase as wellreceivables asage, anand analysis of the agedspecific accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific known collection issues are known to exist, such as pending bankruptcies. Account balances are written off against the allowance when itrecovery is determined to be unlikely. We have elected the practical expedient under ASU 2025-05 for our current trade accounts receivable. Under this expedient, rather than developing separate forecasts of future economic conditions, we assume in estimating expected credit losses that current conditions as of the receivablebalance sheet date will not bechange recovered.over the assets' remaining lives.

Our allowance for credit losses estimate is subject to change due to new developments, changes in assumptions or changes in our strategy. We continually assess the likelihood of potential amounts or ranges of recoverability and adjust our allowance accordingly; however, actual collections and write-offs of trade accounts receivables receivable may materially differ from our estimates.

Income Taxes,Taxes and Sales Taxes, and Regulatory Agency FeesTaxes

Our current and deferred income taxes and associated valuation allowance,allowance and accruals for sales taxes, and telecom regulatory agency fee accruals, are impacted by events and transactions arising in the normal course of business as well as in connection with special and non-routine items. Assessment of the appropriate amount of income taxes,taxes and sales taxes, and regulatory agency feestaxes is dependent on several factors, including estimates of the timing and realization of deferred income tax assets, judgments about the potential results of audits and applicability of regulatory agency rules and regulations, as well as judgments and assumptions about changes in income tax, sales tax, and regulatory agency laws, rules, or regulations.

RECENTLY ISSUED ACCOUNTING STANDARDSTANDARDS NOT YET ADOPTED

In September 2025, the FASB issued ASU 2025-06 –2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stagesstages, so thatmaking the guidance is neutral to different software development methods. methodologies, including Agile and other iterative approaches. The amendments in this ASU are effective for us for annual reporting periods beginning afterAugust December1, 15,2028 2027,(fiscal andyear interim reporting periods within those annual reporting periods,2029), with early adoption permitted. The amendments in this update permit anAn entity tomay apply the new guidanceamendments usingprospectively, retrospectively, or on a prospective,modified retrospective orbasis. modifiedBased transitionon approach.our Wepreliminary areassessment, currentlywe indo thenot processexpect ofadoption evaluatingto thehave effects ofa thismaterial pronouncementeffect on our consolidated financial statements.

In November 2024, the Financial Accounting Standards Board, or FASB,FASB issued Accounting Standards Update, or ASU, No.ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Income–Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disclosures about an entity’s expenses includingby requiring more detailed information about the types of expenses inunderlying commonly presented expenseincome statement captions. AtThe amendments will require us to disclose, in tabular format at each interim and annual reporting period, entities will disclose in tabular format disaggregatingdisaggregated information about prescribed expense categories underlying relevant income statement captions, as well as the total amount of selling expense and a qualitative description of the composition of itsamounts sellingnot expense.separately Wedisclosed. will adopt theThe amendments in thisare ASUeffective for our fiscal year beginning on August 1, 2027.2027 We(fiscal year 2028) and for interim periods beginning August 1, 2028 (fiscal year 2029), with early adoption permitted. The amendments may be applied either prospectively or retrospectively to any or all prior periods presented, and we are currently evaluating the impacttiming thatof thisadoption ASUand willthe transition method. We do not expect adoption to have a material effect on our financial position or results of operations, but expect that adoption will result in additional disclosures in the notes to our consolidated financial statements.

FromDuring andfiscal after August 1, 2024,2026, we reclassified certain customer fundsprepaid forexpenses pendingto moneytrade transfersaccounts receivable. Specifically, in our consolidated financial statements. In the consolidated balance sheet at July 31, 2024, $8.92025, $2.1 million previously includedreported inwithin “Settlement"Prepaid liabilities”expenses" was reclassified to “Customer"Trade fundsaccounts deposits,” andreceivable." inIn the consolidated statements of cash flows infor the fiscal 2024years ended July 31, 2025 and fiscal 2023,2024, cash provided by “Trade(used accountsin) payable,operating accrued activities of $0.5 million and $(1.0) million, respectively, previously reported within "Prepaid expenses, settlement liabilities, other current liabilities,assets, and other liabilities” of $1.6 million and $2.0 million, respectively, was reclassified to cash used in “Customer funds deposits”. These amountsassets" were reclassified to conform"Trade toaccounts the current year’s presentation.receivable."

Our results of operations discussion may include the following performance metrics:

NRS usesutilizes threetwo keyperformance metrics to measure the size of its customer base, including two that are non-GAAP measuresbase: active POS terminals and payment processing accounts. Active POS terminals are the number of POS terminals that have completed at least one transaction in the calendar month. ItThey excludesexclude POS terminals that have not been fully installed by the end of the month. Payment processing accounts are accounts that can generate revenue. ItThey excludesexclude accounts that have been approved but not activated. In addition to the foregoing, NRS uses recurring revenue as a performance metric, which consist of NRS’ revenue in accordance with U.S. GAAP, excluding its revenue from POS terminal sales.

net2phone’s cloudUNITE communications(UCaaS) and uContact (CCaaS) offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. net2phone AI Agent and Coach (an AI-based contact center performance optimization tool) offerings are priced according to fixed bundles of interaction credits. net2phone’s subscription revenue is its revenue in accordance with U.S. GAAP including its AI Agent bundled offerings but excluding sales of its equipment revenue and revenue generated by a legacy SIP trunkingTrunking offering in Brazil. Trends and comparisons between periods for these metrics are used in the analysis of revenue, direct cost of revenue, and gross profit.

Minutes of use is a nonfinancial metric that measures aggregate customer usage during a reporting period. Minutes of use is an important factor in BOSS Revolution’s and IDT Global’s revenue recognition since satisfaction of our performance obligation occurs when the customer uses our service. Minutes of use trends and comparisons between periods are used in the analysis of revenues andrevenues, direct cost of revenues.revenues, and gross profits.

Year Ended July 31, 2026 compared to Year Ended July 31, 2025 compared to Year Ended July 31, 2024 The following table sets forth certain items in our statements of income as a percentage of our total revenues:

National Retail SolutionsNRS Segment

NRS, which represented 12.3%, 10.5%, 8.6%, and 6.2%8.6% of our total revenues in fiscal 2026, fiscal 2025, and fiscal 2024, and fiscal 2023, respectively, is an operator ofoperates a nationwide POS network providingin the United States and Canada that provides independent retailers with POS equipment, store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform also provides marketers with digitalretail out-of-homemedia advertising and transaction data.

Direct Cost of Revenues. Direct cost of revenues increased in fiscal 20252026 compared to fiscal 20242025 driven primarily dueby to the increases in thehigher direct costs associated with the increased scope of NRS’ merchant servicesoperations and advertising,increased partiallysales, offsetincluding byincreased acosts decreaserelated into thePOS directterminal sales and merchant services. Direct costs of NRS’ POSrevenues terminalincreased sales.at a slower rate than revenue, contributing to an increase in gross margin.

Selling, General and Administrative. Selling, general and administrative expense increased in fiscal 20252026 compared to fiscal 20242025 primarily due todriven by increases in salespersonnel-related commissions, bad debt expense, employee compensation,costs and marketingother expense.operating Theexpenses increasesupporting inNRS’ badcontinued debt expense was related to a large programmatic advertising partner.growth. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense was 60.3%, 60.6%, 60.7%, and 61.0%60.7% in fiscal 2026, fiscal 2025, and fiscal 2024, and fiscal 2023, respectively.

Technology and Development. Technology and development expense increased in fiscal 20252026 compared to fiscal 20242025 primarily duedriven by general ongoing business investments to increases develop premium software services provided through the NRS platform, to develop offerings for new markets, and in employeeother compensationdevelopment and depreciationoperations andsupporting amortizationour expense,business partially offset by a decrease in consulting expense.platforms.

Fintech, which represented 13.6%, 12.6%, 10.0%, and 7.0% 10.0% of our total revenues in fiscal 2025,2026, fiscal 2024,2025, and fiscal 2023,2024, respectively, is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; (ii) IDT Financial Services Limited, or IDT Financial Services, a Gibraltar-based bank; (iii) IDT Services Limited (“IDTS”), a Malta-based electronic money institution; and (iiiv) other, significantly smaller, financial services businesses, including a variable interest entity (“VIE”), that processes disbursement payments, which we refer to as the Disbursement Payments VIE, (iii) IDT Financial Services Limited, or IDT Financial Services, a Gibraltar-based bank and (iv) IDT Services Limited (“IDTS”), a Malta-based electronic money institution.VIE.

Selling, General and Administrative. Selling, general and administrative expense increased in fiscal 20252026 compared to fiscal 20242025 primarily due to increases inhigher debit and credit card processing charges, employee compensation, bank fees, and marketing expenses. The increase in card processing charges was the result of increased credit and debit card transactions through our BOSS Money appchargebacks, and other operating costs associated with growth in BOSS Money’s digital channels. transaction activity. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense was 44.3%, 42.8%, 49.4%,and and 54.5%49.4% in fiscal 2026, fiscal 2025, and fiscal 2024, and fiscal 2023, respectively.

Technology and Development. Technology and development expense decreasedincreased in fiscal 20252026 compared to fiscal 20242025 primarily due to a decreaseincreases in employee compensationcompensation, expense,including non-cash compensation, and other development-related costs, partially offset by increases inlower depreciation and amortization expense, software license and maintenance expense, and cloud services expense.

The net2phone segment, which represented 7.4%, 7.1%, 6.8%, and 5.8%6.8% of our total revenues in fiscal 2025,2026, fiscal 2024,2025, and fiscal 2023,2024, respectively, is comprised of net2phone’s integrated cloud communications and contactworkflow centersolutions services.including UCaaS, CCaaS, net2phone AI Agent and Coach solutions.

Direct Cost of Revenues. Direct cost of revenues increased in fiscal 20252026 compared to fiscal 20242025 primarily due to the increasecosts in revenues,incurred withserving the largestexpanded increasenumber inof seats served. Direct costs increased at a slower rate than revenue, reflecting the U.S.relatively market. net2phone’s revenuerapid growth exceeded the increase in direct cost of revenues.higher-margin CCaaS seats compared to UCaaS.

Selling, General and Administrative. Selling, general and administrative expense slightly decreasedincreased in fiscal 20252026 compared to fiscal 2024 2025 primarily due to decreasesincreases in marketing, bad debt,compensation and consultingsales expenses,commissions, partiallyas offsetwell byas increases in sales commissions and depreciationmarketing and amortizationconsulting expenses. As a percentage of net2phone’s revenues, net2phone’s selling, general and administrative expense decreased to 59.6%58.2% from 63.9%59.6% and 68.7%63.9% in fiscal 2026, fiscal 2025, and fiscal 2024, and fiscal 2023, respectively.

Technology and Development. Technology and development expense increased in fiscal 20252026 compared to fiscal 20242025 primarily due to increases in employee compensation, software license and maintenance, cloud services, and depreciation and amortization expenses.

The Traditional Communications segment, which represented 66.7%, 69.8%, 74.6%, and 81.0%74.6% of our total revenues in fiscal 2025,2026, fiscal 2024,2025, and fiscal 2023,2024, respectively, includes: (i) IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts; (ii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide; and (iii) BOSS Revolution, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada; and (iii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide.Canada. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Traditional Communications’ most significant revenue streams are from IDT Digital Payments, BOSS Revolution, and IDT Global. IDT Digital Payments and BOSS Revolution are sold directly to consumers and through the BOSS Money and BOSS Revolution apps as well as through distributors and retailers. We receive payments for BOSS Revolution and IDT Digital Payments prior to providing the services. We recognize the revenue when services are provided to the customer. Traditional Communications’ revenues tend to be somewhat seasonal, with the second fiscal quarter (which contains Christmas and New Year’s Day) and the fourth fiscal quarter (which contains Mother’s Day and Father’s Day) typically showing higher minute volumes. IDT Global's revenue is generally recognized as minutes are terminated and for SMS when messages are transmitted, in accordance with wholesale carrier agreements. Customers are typically invoiced in arrears and settle balances on a periodic basis following the completion of services.

The following information should be read in conjunction with the accompanying condensed consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's Annual Report on Form 10-K asfor the fiscal year ended July 31, 2025 (the “2025 Form 10-K”) filed with the U.S.United States Securities and Exchange Commission (or SEC).

As of JanuaryApril 31,30, 2026, we owned 94.0% of the outstanding shares of our subsidiary, net2phone 2.0, Inc., or net2phone 2.0, which owns and operates the net2phone segment, and 82.3% of the outstanding shares of National Retail Solutions, Inc. or NRS. On a fully diluted basis assuming all the vesting criteria related to various rights granted have been met, we would own 90.0%89.9% of the equity of net2phone 2.0 and 80.2% of the equity of NRS.

Our results of operations discussion may include the following performance metrics:

NRS uses fourutilizes keytwo performance metrics to measure the size of its customer base, including two that are non-GAAP measuresbase: active POS terminals and payment processing accounts. Active POS terminals are the number of POS terminals that have completed at least one transaction in the calendar month. It excludes POS terminals that have not been fully installed by the end of the month. Payment processing accounts are accounts that can generate revenue. It excludes accounts that have been approved but not activated. In addition to the foregoing, NRS uses recurring revenue as a performance metric, which consist of NRS’ revenue in accordance with U.S. GAAP, excluding its revenue from POS terminal sales and monthly average recurring revenue per terminal.

net2phone’s UNITE (UCaaS), and uContact (CCaaS) and Coach (a contact center performance optimization tool) offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. net2phone AI isAgent and Coach (an AI-based contact center performance optimization tool) offerings are priced according to fixed bundles of interaction credits, a usage-based criterion.credits. net2phone’s subscription revenue is its revenue in accordance with U.S. GAAP including its AI Agent bundle offering but excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil. Trends and comparisons between periods for these metrics are used in the analysis of revenue, direct cost of revenue, and gross profit.

Minutes of use is a nonfinancial metric that measures aggregate customer usage during a reporting period. Minutes of use is an important factor in BOSS Revolution’s and IDT Global’s revenue recognition since satisfaction of our performance obligation occurs when the customer uses our service. Minutes of use trends and comparisons between periods are used in the analysis of revenues andrevenues, direct cost of revenues.revenues, and gross profits.

Three and SixNine Months Ended JanuaryApril 31,30, 2026 Compared to Three and SixNine Months Ended JanuaryApril 31,30, 2025

National Retail SolutionsNRS Segment

NRS, which represented 12.3%12.0% and 10.9%10.3% of our total revenues in the three months ended JanuaryApril 31,30, 2026 and 2025, respectively, and 11.9% and 10.3% of our total revenues in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively, operates a POS network in the U.S.United States and Canada that provides independent retailers with POS equipment, store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform also provides marketers with digitalretail out-of-homemedia advertising and transaction data.

Revenues. Revenues increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. These increases were driven primarily by continued growth in recurring revenue, reflecting the expansion of NRS’ retailer network, increased penetration of payment processing services, improved payment processing economics, retail customers' increasing use of credit/debit cards rather than cash, and increased software revenue per terminal as retailers increasingly adopted premium software as a service (SaaS) features and functionalities.

Direct Cost of Revenues. Direct cost of revenues increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. These increases wereperiods, driven primarily by higher direct costs associated with the increased scope of NRS’ operations and increased sales, including increased costs related to POS terminal sales and merchant services.

Selling, General and Administrative. Selling, general and administrative expense increased in the three and sixnine months ended JanuaryApril 31, 30, 2026 from the comparative prior-year periods. These increases were primarily driven by increases in personnel-related costs and other operating expenses supporting NRS’ continued growth. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense increaseddecreased to 59.7%61.5% from 57.6%64.2% in the three months ended JanuaryApril 31,30, 2026 and 2025, and decreased to 59.4%60.1% from 60.0%61.4% in the six nine months ended JanuaryApril 31,30, 2026 and 2025, respectively Technology and Development. Technology and development expense increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. These increases were primarily driven by general ongoing business investments to develop premium software services provided through the NRS platform, and in other development and operations supporting our business platforms.

Fintech, which represented 12.8%14.3% and 12.1%12.8% of our total revenues in the three months ended JanuaryApril 31,30, 2026 and 2025, respectively, and 13.0% 13.4% and 12.1%12.3% of our total revenues in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively, is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; (ii) IDT Financial Services Limited, or IDT Financial Services, a Gibraltar-based bank; (iii) IDT Services Limited (“IDTS”), a Malta-based electronic money institution; and (iiiv) other, significantly smaller, financial services businesses, including a variable interest entity (“VIE”), that processes disbursement payments, which we refer to as the Disbursement Payments VIE, (iii) IDT Financial Services Limited, or IDT Financial Services, a Gibraltar-based bank and (iv) IDT Services Limited (“IDTS”), a Malta-based electronic money institution.VIE.

Revenues. Revenues from BOSS Money increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. These increases were primarily driven by higher digital transaction volumes initiated on the BOSS Money and BOSS Revolution Calling apps.apps in addition to higher foreign currency exchange revenues to select regions, mainly Guatemala and Mexico. BOSS Money continued to benefit from cross-marketing to BOSS Revolution and IDT Digital Payments retail customers.

Direct Cost of Revenues. Direct cost of revenues increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods primarily due to increases in BOSS Money’s direct cost of revenues, consistent with the growth in Boss Money revenue. As transaction volumes increase associated payout and processing fees also increase.increase, partially offset by us reducing the transaction fee that we pay to our money transfer payors.

Selling, General and Administrative. Selling, general and administrative expense increased in the three and sixnine months ended JanuaryApril 31, 30, 2026 from the comparative prior-year periods. These modest increases primarily reflected higher debit and credit card processing charges, chargebacks, and other operating costs associated with growth in BOSS Money’s app and digital transaction activity. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense remainedincreased flatto at44.8% 44.2%from for41.5% bothin the three months ended January 31,April 30, 2026 and 2025, respectively, and decreased to 41.6%42.7% from 43.8%43.0% in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively. The decrease reflects, in part, the efficiencies derived from BOSS Money’s ongoing integration of AI and machine learning in its workflows to enhance customer service and to prevent potential chargebacks, among other priorities.

Technology and Development. Technology and development expense increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. These modest increases primarily reflected higher depreciation and amortization expense, partially offset by lower employee compensation and development-related costs.

The net2phone segment, which represented 7.7% and 7.3% of our total revenues in the three months ended April 30, 2026 and 2025, respectively, and 7.5% and 7.1% of our total revenues in the threenine months ended JanuaryApril 31, 2026 and 2025, respectively, and 7.4% and 7.0% of our total revenues in the six months ended January 31,30, 2026 and 2025, respectively, is comprised of net2phone’s communications and workflow solutions including its UCaaS, CCaas,CCaaS, net2phone AI,AI Agent and Coach solutions.

Revenues. net2phone’s revenues increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods primarily due to sales in itsincreased UCaaS and CCaasCCaaS services revenue, reflecting an increase in seats served during the respective periods andperiods. gainsThe fromincrease was augmented by the impact of the increase in relatively higher revenue per seat CCaaS seats served, as well as by the positive foreign exchange.currency impact of strengthening local currencies versus the U.S. dollar in certain Latin American markets.

Direct Cost of Revenues. Direct cost of revenues increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods primarily due to higherthe revenues,costs net2phone’sincurred continuedserving focusthe onexpanded mid-sizednumber businesses,of multi-channelseats strategies,served. andDirect localized offeringscosts supportedincreased revenueslightly more slowly than revenue, as a result of the relatively rapid growth that exceeded the increase in direct cost of revenues.CCaaS seats compared to UCaaS.

Selling, General and Administrative. Selling, general and administrative expense increased in the three and sixnine months ended JanuaryApril 31, 30, 2026 from the comparative prior-year periods. These increases were primarily driven by higher sales commissions and depreciation and amortization, partially offset by decreases in marketing, consulting and bad debt expenses. As a percentage of net2phone’s revenues, net2phone’s selling, general and administrative expense decreased to 59.1%58.0% from 60.3%59.1% in the three months ended JanuaryApril 31,30, 2026 and 2025, respectively, and to 58.4% from 60.5%60.1% in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively.

Technology and Development. Technology and development expense increased modestly in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. While certain costs, including developing net2phone's AI offerings, employee compensation, software licenses and maintenance, cloud services, and depreciation and amortization increased, these were largely offset by disciplined cost management and the timing of project-related expenditures, resulting in overall modest increased expenses for the period.

The Traditional Communications segment, which represented 67.4%66.0% and 69.9%69.6% of our total revenues in the three months ended JanuaryApril 31,30, 2026 and 2025, respectively, and 67.7%67.1% and 70.6%70.3% of our total revenues in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively, includes: (i) IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts; (ii) BOSS Revolution, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada; and (iii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide.worldwide; and (iii) BOSS Revolution, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada.. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Traditional Communications’ largest businesses by revenue are IDT Digital Payments, IDT Global, and BOSS Revolution. IDT Digital Payments and BOSS Revolution are sold directly to consumers and through the BOSS Money and BOSS Revolution apps as well as through distributors and retailers. We receive payments for BOSS Revolution and IDT Digital Payments prior to providing the services. We recognize the revenue when services are provided to the customer. Traditional Communications’ revenues tend to be somewhat seasonal, with the second fiscal quarter (which contains Christmas and New Year’s Day) and the fourth fiscal quarter (which contains Mother’s Day and Father’s Day) typically showing higher minute volumes. IDT Global's revenue is generally recognized as minutes are terminated and for SMS when messages are transmitted, in accordance with wholesale carrier agreements. Customers are typically invoiced in arrears and settle balances on a periodic basis following the completion of services.

Revenues. Revenues for the Traditional Communications segment decreased in the three months ended April 30, 2026 and increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. TheseThe increasesdecrease werein revenues for the three-month period was driven primarily by higherdeclines in BOSS Revolution and Other revenues, which more than offset increased revenues from IDT Digital Payments and IDT Global. IDT Global revenues increased primarily due to higher international long-distance traffic volumes and improved product mix. The increases in IDT Digital Payments revenues reflected higher transaction volumes and continued growth in digital payment channels. These increases were partially offset by a decline in BOSS Revolution revenues,revenues reflectingreflected industry-wide trends, including the proliferation of unlimited calling plans and free over-the-top voice and messaging services, which have reduced demand for prepaid international calling plans. RevenuesThe fromdecrease in Other offeringsrevenues remainedreflected flatlower demand across certain legacy offerings. The increases in IDT Digital Payments revenues reflected higher transaction volumes and decreasedcontinued slightlygrowth forin thedigital threepayment channels. IDT Global revenues increased primarily due to higher international long-distance traffic volumes to certain locations carried by IDT Global and sixSMS monthswholesale ended January 31, 2026 from the comparative prior-year periods, respectively.growth.

Direct Cost of Revenues. Direct cost of revenues increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods, reflecting higher minutes of use for IDT Global and associated network and carrier costs offset by lower minutes of use and associated network and settlement costs in BOSS Revolution.

Selling, General and Administrative. Selling, general and administrative expense increaseddecreased in the three months ended and remained flat for the sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. The modestdecreases increasereflect reflectsdecreases relatively stablein sales commissions and debit and credit processing charges, partially offset by minor fluctuations in bad debt expense. As a percentage of Traditional Communications’ revenue, Traditional Communications’ selling, general and administrative expense increaseddecreased to 9.4%8.6% from 9.2%9.8% in the three months ended JanuaryApril 31,30, 2026 and 2025, respectively, and decreased to 9.0%8.9% from 9.1%9.3% in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively.

Technology and Development. Technology and development expense increased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. Modest increases in certain operating costs were partially offset by decreases in employee compensation, cloud services, and depreciation and amortization expense, resulting in overall modest increases for the periods.

General and Administrative. Corporate general and administrative expense decreasedincreased in the three and sixnine months ended JanuaryApril 31,30, 2026 from the comparative prior-year periods. These modest decreasesincreases primarily reflect employee-related costs and decreased overhead expenses during the periods. As a percentage of our consolidated revenues, CorporateAs a percentage of consolidated revenue, corporate general and administrative expense was 0.9% and 1.0%0.9% in the three months ended January 31,April 30, 2026 and 2025, respectively, and 0.9%1.0% and 1.0%0.9% in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively.

Stock-Based Compensation Expense. Total stock-based compensation expense included in consolidated selling, general and administrative expense and technology and development expense was $4.3$2.4 million and $0.9 million in the three months ended JanuaryApril 31,30, 2026 and $6.4 2025, respectively, and $8.8 million and $1.8$2.7 million in the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively. These increases primarily reflect the expense recognized during the period related to DSUs granted to executive officers and employees under the Company’s long-term incentive programs. As of JanuaryApril 31,30, 2026, there was $9.6$7.4 million of total unrecognized compensation cost related to non-vested DSUs, which is being recognized on a graded vesting basis over the requisite service periods that end in February 2028.

Other Income (Expense),Income, net. Other income (expense),income, net consists of the following:

We have an investment in shares of convertible preferred stock of MarketSpark Inc., a communications company (“MarketSpark”). As of both JanuaryApril 31,30, 2026 and 2025, our ownership was 33.4% of MarketSpark’s outstanding shares on an as converted basis. We account for this investment using the equity method since we can exercise significant influence over the operating and financial policies of MarketSpark but do not have a controlling interest. We determined that on the dates of the acquisitions of MarketSpark’s shares, there were differences between our investment in MarketSpark and our proportional interest in the equity of MarketSpark of an aggregate of $8.2 million, which represented the share of MarketSpark’s customer list on the dates of the acquisitions attributed to our interest in MarketSpark. These basis differences are being amortized over the 6-year estimated life of the customer list. “Equity in the net loss of investee” includes the amortization of equity method basis difference.

Provision for Income Taxes. The change in income tax expense in the three and sixnine months ended JanuaryApril 31,30, 2026 compared to the comparable prior-year periods was primarily due to differences in the amount of taxable income earned in the various taxing jurisdictions.

Net Income Attributable to Noncontrolling Interests. The change in the net income attributable to noncontrolling interests in the three and sixnine months ended JanuaryApril 31,30, 2026 compared to the comparable prior-year periods was primarily due to changes in net income attributable to the noncontrolling interests in NRS and theour Disbursement Payments VIE.

As of the date of this Quarterly Report, we believe that our cash flow from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on JanuaryApril 31,30, 2026 will be sufficient to meet our currently anticipated working capital and capital expenditure requirements during the twelve-month period ending JanuaryApril 31,30, 2027.

At January 31,April 30, 2026, we had cash, cash equivalents, debt securities, and current equity investments of $246.2$251.4 million (excluding restricted cash and cash equivalents) and working capital (current assets in excess of current liabilities) of $264.4$284.7 million.

The following table includes our anticipated material cash requirements from contractual obligations and other commitments at JanuaryApril 31, 30, 2026:

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, generally trade accounts receivable andreceivable, trade accounts payable.payable During the six months ended January 31, 2026, net cash provided by operating activities was $28.2 million, compared to $20.3 million for the prior-year period, which includesand the impact of settlement assets andassets, disbursements prefunding and customer fund deposits.

Settlement assets and disbursements prefunding increased $42.0$7.8 million and $8.3$59.0 million, respectively, during the sixnine months ended JanuaryApril 31, 30, 2026, compared to the prior-year period. The increase in settlement assets reflects a higher level of funds due from customers for pending money-remittances at BOSS Money. The increase in disbursements prefunding reflects, for the most part, higher levels of funds pre-paid to disbursement partners to fulfill expected customer remittance obligations at BOSS Money, and, to a smaller extent, higher levels of pre-payments made to providers of goods and services to fulfill expected customer purchases of goods and services obligations at IDT Digital Payments.

Towards the end of each week, IDT needs to prefundprefunds BOSS Money disbursement partners for remittances expected during the upcoming weekend. As a result, Friday is typically the day of the week on which IDT’s cash balance is at its lowest level, after prefunding disbursements for the upcoming weekend. Conversely, Wednesday is typically the day of the week on which IDT’s cash balance is at its highest level, after IDT collects cash from digital processors and retailers for all of the remittances originated during the preceding weekend but before the new weekly cycle of prefunding disbursements for the upcoming weekend begins again. This weekly cycle constitutes a significant working capital use of the Company’s cash, and, as such, the day of the week on which the quarter ends can have significant impact on the cash balance reported at the balance sheet date.

Customer fund deposits decreasedincreased $9.6$12.1 million during the sixnine months ended January 31,April 30, 2026 reflecting balances held on behalf of customers across our prepaid, digital payments, and disbursements programs. These balances are supported by restricted cash and cash equivalents held by IDT Financial Services and our Disbursement Payments VIE and fluctuate based on transaction volume and program activity On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect our business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to our operations, and if such changes were made it could materially and adversely affect our business, financial position, and operating results.

As discussed in Note 16 to the Condensed2025 ConsolidatedForm Financial Statements included in Item 1 to Part I of this Quarterly Report,10-K, we and other parties were named in a putative class action and derivative complaint related to Straight Path Communications Inc. filed in the Court of Chancery of the State of Delaware. The Court dismissed all claims against us, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs filed an appeal to which we answered. Oral argument was held on October 22, 2025, and on December 3, 2025, the Delaware Supreme Court affirmed the favorable decision of the Court of Chancery that dismissed all claims against us and found that Plaintiff and the class suffered no damages.

During the sixnine months ended JanuaryApril 31,30, 2026, we deployed $12.0$17.1 million for capital expenditures. We currently anticipate that total capital expenditures in the twelve-month period ending JanuaryApril 31,30, 2027 will be $22$23.0 million to $23$24.0 million. We expect to fund our capital expenditures with our net cash provided by operating activities and cash, cash equivalents, debt securities, and current equity investments on hand.

In February 2025, we entered into a loan agreement with MarketSpark for a revolving credit facility. The aggregate principal amount available under the facility is $2.0 million. The loans incur interest at 12% 12.0% per annum payable semiannually and are due and payable in February 2027. In February 2025, the Company loaned MarketSpark $0.5 million under the revolving credit facility. In May 2025, June 2025 and July 2025, the Company loaned MarketSpark an additional $0.4aggregate amount of $1.4 million for an aggregate of $1.9 million under the revolving credit facility.

During the sixnine months ended JanuaryApril 31,30, 2026, purchases of debt securities and equity investments were $25.8$43.0 million and proceeds from maturities and sales of debt securities and redemptions of equity investments were $17.3$34.6 million.

In the sixnine months ended JanuaryApril 31,30, 2026, we paid aggregate cash dividends of $0.12$0.19 per share on our Class A and Class B common stock for an aggregate amount of $3.0$4.8 million. In the sixnine months ended JanuaryApril 31,30, 2025, we paid aggregate cash dividends of $0.10$0.16 per share on our Class A and Class B common stock for an aggregate cash dividends of $2.5$4.0 million.

On March 9,May 29, 2026, our Board of Directors declared a cash dividend on our Class A and Class B common stock of $0.07 per share payable on or about MarchJune 31,18, 2026 to stockholders of record as of the close of business on MarchJune 19,9, 2026.

IDT Telecom, Inc. (“IDT Telecom”), aour subsidiary of us,subsidiary, maintains a $25.0 million revolving credit facility with TD Bank, N.A. maturing which was scheduled to mature on May 16, 2026. Effective May 12, 2026, the Company obtained an extension of the maturity date to July 15, 2026, and is currently in the process of renewing the facility. The revolving credit facility is secured by primarilysubstantially all of IDT Telecom’s assets and bears interest at the secured overnight financing rate (“SOFR”) plus a margin of 125-175 basis points, depending on leverage. At January 31,April 30, 2026 and July 31, 2025, there were no amounts outstanding under this facility. During the sixnine months ended JanuaryApril 31,30, 2026 and 2025, IDT Telecom borrowed and repaid $16.0$21.4 million and $24.5$24.6 million, respectively.

We have an existing stock repurchase program authorized by our Board of Directors for the repurchase of shares of our Class B common stock. In January 2016, the Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the sixnine months ended January 31,April 30, 2026, we repurchased 307,533391,186 shares of our Class B common stock for an aggregate purchase price of $15.0$19.0 million. In the six nine months ended JanuaryApril 31,30, 2025, we repurchased 217,052221,823 shares of our Class B common stock for an aggregate purchase price of $9.9$10.1 million. At JanuaryApril 31,30, 2026, 3.93.8 million shares remained available for repurchase under the stock repurchase program.

In the sixnine months ended JanuaryApril 31,30, 2026 and 2025, the Company withheld nil10,852 shares and 32,022157,180 shares, valued at nil$0.5 million and $1.5 $7.7 million, respectively, of the Company’s Class B common stock from employees to satisfy the employees’ tax withholding obligations in connection with the vesting of deferred stock units (“DSUs”) and the lapsing of restrictions on restricted stock. The value of the shares is based on the fair market value as of the close of business on the trading day immediately prior to the vesting date. These shares are not repurchased under the Company’s share repurchase program.