IDT CORP

Previous wording

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 Form 10-K as filed with the U.S. Securities and Exchange Commission (or SEC).

Current wording

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 for the fiscal year ended July 31, 2025 (the “2025 Form 10-K”) filed with the United States Securities and Exchange Commission (or SEC).

Previous wording

As of January 31, 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, 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% of the equity of net2phone 2.0 and 80.2% of the equity of NRS.

Current wording

As of April 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 89.9% of the equity of net2phone 2.0 and 80.2% of the equity of NRS.

Previous wording

Our results of operations discussion include the following performance metrics:

Current wording

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

Previous wording

NRS uses four key metrics to measure the size of its customer base, including two that are non-GAAP measures: 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.

Current wording

NRS utilizes two performance metrics to measure the size of its customer base: 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.

Previous wording

net2phone’s UNITE (UCaaS), 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 is priced according to interaction credits, a usage-based criterion. net2phone’s subscription revenue is its revenue in accordance with U.S. GAAP excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil.

Current wording

net2phone’s UNITE (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 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.

Previous wording

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 and direct cost of revenues.

Current wording

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, direct cost of revenues, and gross profits.

Previous wording

Three and Six Months Ended January 31, 2026 Compared to Three and Six Months Ended January 31, 2025

Current wording

Three and Nine Months Ended April 30, 2026 Compared to Three and Nine Months Ended April 30, 2025

Previous wording

NRS, which represented 12.3% and 10.9% of our total revenues in the three months ended January 31, 2026 and 2025, respectively, and 11.9% and 10.3% of our total revenues in the six months ended January 31, 2026 and 2025, respectively, operates a POS network in the U.S. 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 digital out-of-home advertising and transaction data.

Current wording

NRS, which represented 12.0% and 10.3% of our total revenues in the three months ended April 30, 2026 and 2025, respectively, and 11.9% and 10.3% of our total revenues in the nine months ended April 30, 2026 and 2025, respectively, operates a POS network in 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 retail media advertising and transaction data.

Previous wording

Revenues. Revenues increased in the three and six months ended January 31, 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, and increased software revenue per terminal as retailers increasingly adopted premium software as a service (SaaS) features and functionalities.

Current wording

*Revenues. *Revenues increased in the three and nine months ended April 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.

Previous wording

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

Current wording

Direct Cost of Revenues**.** Direct cost of revenues increased in the three and nine months ended April 30, 2026 from the comparative prior-year periods, 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.

Previous wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three and six months ended January 31, 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 increased to 59.7% from 57.6% in the three months ended January 31, 2026 and 2025, and decreased to 59.4% from 60.0% in the six months ended January 31, 2026 and 2025, respectively

Current wording

Selling, General and Administrative**.** Selling, general and administrative expense increased in the three and nine months ended April 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 decreased to 61.5% from 64.2% in the three months ended April 30, 2026 and 2025, and to 60.1% from 61.4% in the nine months ended April 30, 2026 and 2025, respectively

Previous wording

Technology and Development. Technology and development expense increased in the three and six months ended January 31, 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.

Current wording

Technology and Development**.** Technology and development expense increased in the three and nine months ended April 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.

Previous wording

Fintech, which represented 12.8% and 12.1% of our total revenues in the three months ended January 31, 2026 and 2025, respectively, and 13.0% and 12.1% of our total revenues in the six months ended January 31, 2026 and 2025, respectively, is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; and (ii) 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.

Current wording

Fintech, which represented 14.3% and 12.8% of our total revenues in the three months ended April 30, 2026 and 2025, respectively, and 13.4% and 12.3% of our total revenues in the nine months ended April 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 (iv) 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.

Previous wording

Revenues. Revenues from BOSS Money increased in the three and six months ended January 31, 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. BOSS Money continued to benefit from cross-marketing to BOSS Revolution and IDT Digital Payments retail customers.

Current wording

*Revenues. *Revenues from BOSS Money increased in the three and nine months ended April 30, 2026 from the comparative prior-year periods. These increases were driven by higher digital transaction volumes initiated on the BOSS Money and BOSS Revolution Calling 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.

Previous wording

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, 2026 from the comparative prior-year periods primarily due to increases in BOSS Money’s direct cost of revenues, consistent with the growth in revenue. As transaction volumes increase associated payout and processing fees also increase.

Current wording

Direct Cost of Revenues**.** Direct cost of revenues increased in the three and nine months ended April 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, partially offset by us reducing the transaction fee that we pay to our money transfer payors.

Previous wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three and six months ended January 31, 2026 from the comparative prior-year periods. These modest increases primarily reflected higher debit and credit card processing charges, 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 remained flat at 44.2% for both the three months ended January 31, 2026 and 2025, respectively, and decreased to 41.6% from 43.8% in the six months ended January 31, 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.

Current wording

Selling, General and Administrative**.** Selling, general and administrative expense increased in the three and nine months ended April 30, 2026 from the comparative prior-year periods. These increases primarily reflected higher debit and credit card processing charges, chargebacks, and other operating costs associated with growth in BOSS Money’s digital transaction activity. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense increased to 44.8% from 41.5% in the three months ended April 30, 2026 and 2025, respectively, and decreased to 42.7% from 43.0% in the nine months ended April 30, 2026 and 2025, respectively.

Previous wording

Technology and Development. Technology and development expense increased in the three and six months ended January 31, 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.

Current wording

Technology and Development**.** Technology and development expense increased in the three and nine months ended April 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.

Previous wording

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

Current wording

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 nine months ended April 30, 2026 and 2025, respectively, is comprised of net2phone’s communications and workflow solutions including its UCaaS, CCaaS, net2phone AI Agent and Coach solutions.

Previous wording

Revenues. net2phone’s revenues increased in the three and six months ended January 31, 2026 from the comparative prior-year periods primarily due to sales in its UCaaS and CCaas services revenue, reflecting an increase in seats served during the respective periods and gains from foreign exchange.

Current wording

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

Previous wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three and six months ended January 31, 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% from 60.3% in the three months ended January 31, 2026 and 2025, respectively, and to 58.4% from 60.5% in the six months ended January 31, 2026 and 2025, respectively.

Current wording

Selling, General and Administrative**.** Selling, general and administrative expense increased in the three and nine months ended April 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 58.0% from 59.1% in the three months ended April 30, 2026 and 2025, respectively, and to 58.4% from 60.1% in the nine months ended April 30, 2026 and 2025, respectively.

Previous wording

Technology and Development. Technology and development expense increased in the three and six months ended January 31, 2026 from the comparative prior-year periods. While certain costs, including 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.

Current wording

Technology and Development**.** Technology and development expense increased modestly in the three and nine months ended April 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.

Previous wording

The Traditional Communications segment, which represented 67.4% and 69.9% of our total revenues in the three months ended January 31, 2026 and 2025, respectively, and 67.7% and 70.6% of our total revenues in the six months ended January 31, 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. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Current wording

The Traditional Communications segment, which represented 66.0% and 69.6% of our total revenues in the three months ended April 30, 2026 and 2025, respectively, and 67.1% and 70.3% of our total revenues in the nine months ended April 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) 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.. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Previous wording

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.

Current wording

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.

Previous wording

Revenues. Revenues for the Traditional Communications segment increased in the three and six months ended January 31, 2026 from the comparative prior-year periods. These increases were driven primarily by higher 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, reflecting 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. Revenues from Other offerings remained flat and decreased slightly for the three and six months ended January 31, 2026 from the comparative prior-year periods, respectively.

Current wording

Revenues. Revenues for the Traditional Communications segment decreased in the three months ended April 30, 2026 and increased in the nine months ended April 30, 2026 from the comparative prior-year periods. The decrease in revenues for the three-month period was driven primarily by declines in BOSS Revolution and Other revenues, which more than offset increased revenues from IDT Digital Payments and IDT Global. The decline in BOSS Revolution revenues reflected 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. The decrease in Other revenues reflected lower demand across certain legacy offerings. The increases in IDT Digital Payments revenues reflected higher transaction volumes and continued growth in digital payment channels. IDT Global revenues increased primarily due to higher international long-distance traffic volumes to certain locations carried by IDT Global and SMS wholesale growth.

Previous wording

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, 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.

Current wording

Direct Cost of Revenues**.** Direct cost of revenues increased in the three and nine months ended April 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.

Previous wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three months ended and remained flat for the six months ended January 31, 2026 from the comparative prior-year periods. The modest increase reflects relatively stable 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 increased to 9.4% from 9.2% in the three months ended January 31, 2026 and 2025, respectively, and decreased to 9.0% from 9.1% in the six months ended January 31, 2026 and 2025, respectively.

Current wording

Selling, General and Administrative**.** Selling, general and administrative expense decreased in the three and nine months ended April 30, 2026 from the comparative prior-year periods. The decreases reflect decreases in 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 decreased to 8.6% from 9.8% in the three months ended April 30, 2026 and 2025, respectively, and decreased to 8.9% from 9.3% in the nine months ended April 30, 2026 and 2025, respectively.

Previous wording

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

Current wording

Technology and Development**.**Technology and development expense increased in the three and nine months ended April 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.

Previous wording

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

Current wording

General and Administrative**.** Corporate general and administrative expense increased in the three and nine months ended April 30, 2026 from the comparative prior-year periods. These increases primarily reflect employee-related costs and overhead expenses during the periods. As a percentage of our consolidated revenues, As a percentage of consolidated revenue, corporate general and administrative expense was 0.9% and 0.9% in the three months ended April 30, 2026 and 2025, respectively, and 1.0% and 0.9% in the nine months ended April 30, 2026 and 2025, respectively.

Previous wording

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 million and $0.9 million in the three months ended January 31, 2026 and $6.4 million and $1.8 million in the six months ended January 31, 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 January 31, 2026, there was $9.6 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.

Current wording

Stock-Based Compensation Expense. Total stock-based compensation expense included in consolidated selling, general and administrative expense and technology and development expense was $2.4 million and $0.9 million in the three months ended April 30, 2026 and 2025, respectively, and $8.8 million and $2.7 million in the nine months ended April 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 April 30, 2026, there was $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.

Previous wording

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

Current wording

Other Income, net. Other income, net consists of the following:

Previous wording

Provision for Income Taxes. The change in income tax expense in the three and six months ended January 31, 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.

Current wording

Provision for Income Taxes. The change in income tax expense in the three and nine months ended April 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.

Previous wording

**Net Income Attributable to Noncontrolling Interests.**The change in the net income attributable to noncontrolling interests in the three and six months ended January 31, 2026 compared to the comparable prior-year periods was primarily due to changes in net income attributable to the noncontrolling interests in NRS and the VIE.

Current wording

Net Income Attributable to Noncontrolling Interests**.**The change in the net income attributable to noncontrolling interests in the three and nine months ended April 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 our Disbursement Payments VIE.

Previous wording

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

Current wording

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

Previous wording

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 and trade accounts 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 includes the impact of settlement assets and disbursements prefunding and customer fund deposits.

Current wording

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, trade accounts payable and the impact of settlement assets, disbursements prefunding and customer fund deposits.

Previous wording

Settlement assets and disbursements prefunding increased $42.0 million and $8.3 million, respectively, during the six months ended January 31, 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.

Current wording

Settlement assets and disbursements prefunding increased $7.8 million and $59.0 million, respectively, during the nine months ended April 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.

Previous wording

Towards the end of each week, IDT needs to prefund 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.

Current wording

Towards the end of each week, IDT prefunds 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.

Previous wording

Customer fund deposits decreased $9.6 million during the six months ended January 31, 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

Current wording

Customer fund deposits increased $12.1 million during the nine months ended 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

Previous wording

As discussed in Note 16 to the Condensed Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, 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.

Current wording

As discussed in the 2025 Form 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.

Previous wording

During the six months ended January 31, 2026, we deployed $12.0 million for capital expenditures. We currently anticipate that total capital expenditures in the twelve-month period ending January 31, 2027 will be $22 million to $23 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.

Current wording

During the nine months ended April 30, 2026, we deployed $17.1 million for capital expenditures. We currently anticipate that total capital expenditures in the twelve-month period ending April 30, 2027 will be $23.0 million to $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.

Previous wording

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% 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, the Company loaned MarketSpark an additional $0.4 million for an aggregate of $1.9 million under the revolving credit facility.

Current wording

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 12.0% 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 aggregate amount of $1.4 million for an aggregate of $1.9 million under the revolving credit facility.