IDT CORP

Note1—Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of IDT Corporation and its subsidiaries (the “Company” or “IDT”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form10-Q and Article10 of Regulation S-X. Accordingly, they donot include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for thethree andnine months ended* April 30, 2026* arenot necessarily indicative of the results that* maybe expected for the fiscal year ending July 31, 2026*. The balance sheet at* July 31, 2025* has been derived from the Company’s audited financial statements at that date but doesnot include all of the information and notes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form10-K for the fiscal year ended* July 31, 2025* (the “2025 Form10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”).

The Company’s fiscal year ends on* July**31* of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal2026 refers to the fiscal year ending* July 31, 2026*).

As of* April 30, 2026*, the Company owned 94.0% of the outstanding shares of its subsidiary,net2phone 2.0, Inc. (“net2phone 2.0”), which owns and operates thenet2phone segment, and 82.3% of the outstanding shares of National Retail Solutions, Inc. (“NRS”). On a fully diluted basis, assuming all the vesting criteria related to various rights granted have been met, the Company would own 89.9% of the equity ofnet2phone 2.0 and 80.2% of the equity of NRS.

Reclassifications

During thenine months ended* April 30, 2026*, the Company reclassified certain prepaid expenses to trade accounts receivable. Accordingly, in the condensed consolidated balance sheet at* July 31, 2025*, $2.1 million previously reported within “Other current assets” was reclassified to “Trade accounts receivable,” and in the condensed consolidated statements of cash flows for thenine months ended* April 30, 2025*, $0.4 million previously reported within “Prepaid expenses, other current assets, and other assets” was reclassified to “Trade accounts receivable”.

During thenine months ended* April 30, 2026*, the Company reclassified in the condensed consolidated statement of cash flows certain amount to settlement assets and disbursement prefunding that were previously included together with “Prepaid expenses, other current assets, and other assets.” In the condensed consolidated statements of cash flows for thenine months ended* April 30, 2025*, $16.8 million previously included within “Settlement assets and disbursement prefunding” was reclassified to be presented as a separate line item.

Recently Adopted Accounting Standards

In* December 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2023-09, Income Taxes (Topic740)*,Improvements to Income Tax Disclosures, which enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance also includes certain other amendments to improve the effectiveness of income tax disclosures.

The adoption of this update will be applied on a prospective basis and will require the Company to expand its income tax disclosures beginning with its Annual Report on Form10-K for fiscal year ending* July 31, 2026*, which includes further disaggregation of the income tax expense into federal, state, and foreign categories, enhanced detail in the effective tax rate reconciliation, and disclosure of income taxes paid by significant jurisdictions.

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In* July 2025,the FASB issued ASU2025*-05 –Financial Instruments–* Credit Losses*(Topic326):* Measurement of Credit Losses for Accounts Receivable and Contract Assets*, which amends ASC326-20 to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC606. The amendments are effective for annual and interim reporting periods beginning on* August 1, 2026.The practical expedient in ASU2025*-05 allows the Company to simplify estimating expected credit losses for current accounts receivable and contract assets by assuming that current conditions as of the balance sheet date willnot change over the asset's remaining life. This aims to reduce the complexity and cost of developing forecasts for these assets under the CECL model for ASC606-related transactions. This amendment doesnot have an impact on the Company's current estimation process. The Company elected to early adopt the practical expedient during thenine months ended* April 30, 2026*. The adoption didnot have a material impact on the Company’s condensed consolidated financial statements.

Note2—Business Combination

On* April 16, 2026,NRS entered into an asset purchase agreement (the “Agreement”) to acquire certain assets and assume certain liabilities of Oncore Digital, Inc. and its wholly owned subsidiaries (“the Acquired Business”). The Acquired Business is a digital media brokerage operation engaged in digital advertising and monetization. The acquisition closed on May 1, 2026.In connection with the transaction, the Acquired Business was contributed to a newly formed entity (“NRS OnCore”), in which the sellers retained a 20% noncontrolling interest and NRS obtained an 80% controlling interest. As a result, NRS consolidates NRS OnCore under the voting interest model. The aggregate preliminary purchase consideration, which is subject to finalization, is currently estimated to be approximately $4.8 million, consisting of $3.3 million in cash and shares of IDT Class B common stock with an aggregate value of $1.5 million, subject to customary post-closing adjustments, as well as contingent earnouts upon certain milestones being achieved. The Company has determined that the acquired set represents a business and is accounting for the transaction as a business combination under ASC805,* Business Combinations. The acquired assets consist primarily of customer relationships and vendor relationships, and the assumed liabilities include certain operating liabilities. The Company is in the process of determining the fair value of the assets acquired and liabilities assumed, including the allocation of the purchase price to identifiable intangible assets and goodwill. The acquisition will integrate OnCore's ad tech, demand, and publisher network with NRS' screen network andfirst-party transaction data to form a more uniform offering.

Note3—Business Segment Information

The Company hasfour reportable business segments, NRS, Fintech,net2phone, and Traditional Communications.

The NRS segment is an operator of a nationwide point-of-sale (“POS”) network providing independent retailers with POS equipment, store management software, electronic payment processing, and other ancillary merchant services. NRS’ POS platform provides marketers with digital out-of-home advertising and transaction data.

The Fintech segment is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; (ii) IDT Financial Services Limited (“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 (the “Disbursement Payments VIE”).

Thenet2phone segment is an AI-powered business communications solutions provider focused on optimizing customer interactions, with a focus on small enterprise and mid-market customers across North and South America.net2phone’s key offerings include: UNITE - an AI-powered communications platform; uContact – an omnichannel contact center platform; AI Agent – an agentic AI service that automates customer interactions; and Coach AI – a provider of real-time agent guidance and conversational intelligence.

The Traditional Communications segment 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.

The Company’s reportable segments are distinguished by types of service, customers, and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker (“CODM”), which is a group of the Company’s executives that includes the Chairman of the Board of Directors, Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer. The Company’s CODM uses actual and budgeted income (loss) from operations to evaluate the performance of the business segments and allocate resources, including capital allocations, primarily by monitoring actual results compared to prior periods and expected results. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. There areno significant asymmetrical allocations to segments. The Company evaluates the performance of its business segments based primarily on income (loss) from operations.

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Corporate costs mainly include compensation, consulting fees, treasury, tax and accounting services, human resources, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, and other corporate-related general and administrative expenses. Corporate doesnot generate any revenues, nor does it incur any direct cost of revenues.

Operating results for the business segments of the Company are included in the tables below. The significant expense categories align with the segment-level information that is regularly provided to the CODM. The significant expense categories include depreciation and amortization. Other segment items, which is the difference between segment revenues less the segment expenses disclosed and segment income (loss) from operations, includes severance expense and other operating expense, net. The reconciliation of the total income (loss) from operations to income before income taxes is reflected in the condensed consolidated statements of income.

Operating results for the business segments of the Company were as follows:

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Note4—Revenue Recognition

The Company earns revenue from contracts with customers primarily through the provision of retail telecommunications, mobile top-up, payment offerings, as well as wholesale international voice and SMS termination services. NRS generates revenue primarily from point-of-sale ("POS") terminal sales, Software as a Service ("SaaS") plans, payment processing, digital advertising, and data and analytics services, which are generally recognized at a point in time when control of the goods or services transfers, except for subscription services that are recognized over time.net2phone earns revenue primarily from cloud-based communications, unified communications as a service (“UCaaS”), contact center as a service (“CCaaS”) solution and AI Agent and Coach solutions, which are recognized over time as services are provided. BOSS Money and IDT Digital Payments revenues are recognized at a point in time when transactions are completed. Traditional Communications offerings consist primarily of minute-based, paid-voice services, with revenue recognized at a point in time as usage occurs.

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Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by business segment and service offered to customers:

The following table shows the Company’s revenues disaggregated by geographic region, which is determined based on selling location:

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Remaining Performance Obligations

The following table includes revenue by business segment expected to be recognized in the future from performance obligations that were unsatisfied or partially unsatisfied as of* April 30, 2026*. The table excludes contracts that had an original expected duration ofone year or less.

Accounts Receivable and Contract Balances

The timing of revenue recognition* maydiffer from the time of billing to the Company’s customers. Trade accounts receivable in the Company’s condensed consolidated balance sheets represent unconditional rights to consideration. The Company records a contract asset when revenue is recognized in advance of its right to bill and receive consideration. The Company hasnot* currently identified any contract assets.

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The Company’s contract liability balance is primarily payments received for BOSS Revolution prepaid products and services. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company’s condensed consolidated balance sheets as “Deferred revenue.”

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The following table presents revenue recognized during the period from amounts included in the Company’s contract liability balance at the beginning of the period:

Receivables and contract balances from contracts with customers during thenine months ended* April 30, 2026and2025* were as follows:

Deferred Customer Contract Acquisition and Fulfillment Costs

The Company recognizes as an asset its incremental costs of obtaining a contract with a customer that it expects to recover. The Company’s incremental costs of obtaining a contract with a customer are sales commissions paid to employees andthird parties on sales to end users. If the amortization period wereone year or less for the asset that would be recognized from deferring these costs, the Company applies the practical expedient whereby the Company charges these costs to expense when incurred.

The Company’s costs to fulfill its contracts donot meet the criteria to be recognized as an asset, therefore these costs are charged to expense as incurred.

The Company’s deferred customer contract acquisition costs were as follows:

The Company’s amortization of deferred customer contract acquisition costs during the periods were as follows:

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Note5—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms ranging from less thanone year to approximately five years. Certain of these leases contain renewal options that* maybe exercised and/or options to terminate the lease prior to expiration. The Company has concluded that it isnot* reasonably certain that it would exercise any of these options.

Supplemental disclosures related to the Company’s operating leases were as follows:

In thenine months ended* April 30, 2026and2025*, the Company obtained right-of-use assets of $0.1 million and $0.4 million, respectively, in exchange for new operating lease liabilities.

The Company’s aggregate operating lease liability was as follows:

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Future minimum maturities of operating lease liabilities were as follows:

Note6—Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported in the condensed consolidated balance sheets that equal the total of the same amounts reported in the condensed consolidated statements of cash flows:

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Certain of the electronic money financial services regulations in Gibraltar require IDT Financial Services to safeguard cash held for customer deposits, segregate cash held for customer deposits from any other cash that IDT Financial Services holds and utilize the cash only for the intended payment transaction. In addition, the Disbursement Payments VIE is contractually required to use customer funds only for the customers’ pending money disbursements. IDTS is subject to similar regulatory obligations under the Maltese financial services regulations, which also mandate the safeguard of electronic money, the segregation of the cash held for customer deposits from any other cash that IDTS holds and utilize the cash only for the intended payment transaction.

Note7—Debt Securities

The following is a summary of available-for-sale debt securities:

The gross unrealized losses in the table above are recorded in “Accumulated other comprehensive loss” in the condensed consolidated balance sheets. As of* April 30, 2026*, the Company determined that the unrealized losses were due to changes in interest rates or market liquidity and werenot due to credit losses. In addition, as of* April 30, 2026* and* July 31, 2025*, the Company didnot intend to sell any of the securities with unrealized losses, and it isnot more likely thannot that the Company will be required to sell any of these securities before recovery of the unrealized losses, which* may*be at maturity.

Proceeds from maturities and sales of debt securities and redemptions of equity investments were $34.6 million and $35.0 million in thenine months ended* April 30, 2026and2025*, respectively. Realized gains or realized losses from sales of debt securities werenot material in thenine months ended* April 30, 2026and2025*.

The contractual maturities of the Company’s available-for-sale debt securities at* April 30, 2026* were as follows:

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The following table includes the fair value of the Company’s available-for-sale debt securities that were in an unrealized loss position:

The following available-for-sale debt securities included in the table above were in a continuous unrealized loss position for12 months or longer:

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Note8—Equity Investments

Equity investments consist of the following:

Howard Jonas, the Chairman of the Company and the Chairman of the Company’s Board of Directors is also the Vice-Chairman of the Board of Directors of Zedge, Inc. (“Zedge”) and the Chairman of the Board of Directors, Executive Chairman, Chief Executive Officer and President of Rafael Holdings, Inc. (“Rafael”).

In* June 2025,*pursuant to a Rafael rights offering, the Company purchased 168,122 shares of Rafael Class B common stock for an aggregate of $0.2 million.

In* June 2016,upon the acquisition of Visa Europe Limited by Visa, Inc. (“Visa”), IDT Financial Services received 1,830 shares of Visa Series C Preferred among other consideration. In July 2024,in connection with Visa’s mandatory release assessment, the Company received 33 shares of Visa’s Series A Preferred. In August 2024,*the 33 shares of Visa Series A Preferred were converted into 3,300 shares of Visa Class A common stock, which the Company sold for $0.9 million.

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The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

The Company adjusted the carrying value of the shares of Visa Series C Preferred it held based on the fair value of Visa Class A common stock, including a discount for lack of current marketability, which is classified as “Adjustment for observable transactions involving a similar investment from the same issuer” in the table above. The Certificate of Designation with respect to the shares of Visa Series C Preferred restricts the transferability of the shares, there isno public market for the shares, andnone is expected to develop. The shares become fully convertible into shares of Visa Class A common stock in* June 2028.*

In* January 2026,the Company acquired an equity interest in a privately-owned Israeli company, for total consideration of $1.0 million, consisting of $500,000 paid at closing and an additional $500,000 payable upon the successful launch of the investee’s mobile application. The investment is accounted for under the measurement alternative in accordance with ASC321,* Investments—Equity Securities, because the investment doesnot have a readily determinable fair value and the Company doesnot have significant influence over the investee.

Unrealized (losses) gains for all equity investments measured at fair value included the following:

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The unrealized (losses) gains and for all equity investments measured at fair value in the table above included the following:

Equity Method Investment

The Company has an investment in shares of convertible preferred stock of MarketSpark, Inc., a communications company (“MarketSpark”). As of both* April 30, 2026* and* July 31, 2025*, the Company’s ownership was 33.4% of MarketSpark’s outstanding shares on an as converted basis. The Company accounts for this investment using the equity method since the Company can exercise significant influence over the operating and financial policies of MarketSpark but doesnot have a controlling interest.

The Company determined that on the dates of the acquisitions of MarketSpark’s shares, there were differences between its investment in MarketSpark and its 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 the Company’s interest in MarketSpark. These basis differences are being amortized over the6-year estimated life of the customer list. In the accompanying condensed consolidated statements of income, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other income, net” (see Note18).

The following table summarizes the change in the balance of the Company’s equity method investment:

In* February 2025,the Company entered into a loan agreement with MarketSpark to provide a revolving credit facility with an aggregate principal amount of up to $2.0 million. Borrowings under the facility bear 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,** June 2025and July 2025,the Company loaned MarketSpark an additional aggregate amount of $1.4 million. As of April 30, 2026*, $1.9 million of principal was outstanding under the revolving credit facility.

Because the Company has committed to provide up to $2.0 million in funding to MarketSpark under the revolving credit facility described above, the Company continues to recognize its share of MarketSpark’s losses even after the carrying value of its investment has been reduced to zero, up to the amount of its funding commitment.

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Note9—Fair Value Measurements

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

Level1 – quoted prices in active markets for identical assets or liabilities

Level2 – observable inputs other than quoted prices in active markets for identical assets and liabilities

Level3 –no observable pricing inputs in the market

At* April 30, 2026* and* July 31, 2025*, the Company had $4.2 million and $3.0 million, respectively, in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying condensed consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method, therefore they werenot measured at fair value.

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The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level3):

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level3):

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates arenot necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Cash and cash equivalents, restricted cash and cash equivalents, settlement assets, disbursement prefunding, other current assets, customer funds deposits, settlement liabilities, and other current liabilities.At April 30, 2026 and* July 31, 2025*, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash, cash equivalents, and restricted cash and cash equivalents were classified as Level1 and settlement assets, disbursement prefunding, other current assets, customer funds deposits, settlement liabilities, and other current liabilities were classified as Level2 of the fair value hierarchy.

Other assets and other liabilities.At April 30, 2026 and* July 31, 2025*, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level3 of the fair value hierarchy.

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Note10—Variable Interest Entity

The Company is the primary beneficiary of the Disbursement Payments VIE. The Company consolidates the Disbursement Payments VIE because it has the power to direct the activities of the VIE that most significantly impact its economic performance, and has the obligation to absorb losses of, and the right to receive benefits from, the Disbursement Payments VIE that could potentially be significant to it. The Company doesnot currently own any equity interest in the Disbursement Payments VIE and thus the net income incurred by the Disbursement Payments VIE was attributed to noncontrolling interests in the accompanying condensed consolidated statements of income.

The Disbursement Payments VIE’s net income and aggregate funding provided by the Company were as follows:

The Disbursement Payments VIE’s summarized consolidated balance sheet amounts are as follows:

The Disbursement Payments VIE’s assets* mayonly be used to settle the Disbursement Payments VIE’s obligations and may**not* be used for other consolidated entities. The Disbursement Payments VIE’s liabilities are non-recourse to the general credit of the Company’s or its other consolidated entities.

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Note11—Other Operating Income (Expense), Net

The following table summarizes the other operating income (expense), net by business segment:

Straight Path Communications Inc. Class Action

The Company 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 the Company, and found that, contrary to the plaintiffs’ allegations, the class sufferedno damages. The plaintiffs filed an appeal to which the Company 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 the Company and found that Plaintiff and the class sufferedno* damages.

Note12—Revolving Credit Facility

IDT Telecom, Inc. (“IDT Telecom”), a subsidiary of the Company, maintains a $25.0 million revolving credit facility with TD Bank, N.A. 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 substantially 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. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest. At April 30, 2026* and* July 31, 2025*, there wereno amounts outstanding under this facility. During thenine months ended* April 30, 2026and2025*, IDT Telecom borrowed and repaid $21.4 million and $24.6 million, respectively. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of* April 30, 2026* and* July 31, 2025*, IDT Telecom was in compliance with all of the covenants.

Note13—Redeemable Noncontrolling Interest

On* September 29, 2021,NRS sold shares of its Class B common stock representing 2.5% of its outstanding capital stock on a fully diluted basis to Alta Fox Opportunities Fund LP (“Alta Fox”) for cash of $10.0 million. Alta Fox has the right to request that NRS redeem all or any portion of the NRS common shares that it purchased at the per share purchase price during a period of182* days following thefifth anniversary of this transaction. The redemption right shall terminate upon the consummation of (i) a sale of NRS or its assets for cash or securities that are listed on a national securities exchange, (ii) a public offering of NRS’ securities, or (iii) a distribution of NRS’ capital stock following which NRS’ common shares are listed on a national securities exchange.

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The shares of NRS’ Class B common stock sold to Alta Fox have been classified as mezzanine equity in the accompanying condensed consolidated balance sheets because they* maybe redeemed at the option of Alta Fox, although the shares arenot* mandatorily redeemable. The carrying amount of the shares includes the noncontrolling interest in the net income of NRS. The net income attributable to the mezzanine equity’s noncontrolling interest during the periods were as follows:

Note14—Equity

Dividend Payments

In thenine months ended* April 30, 2026and2025*, the Company paid aggregate cash dividends of $0.19 and $0.16 per share, respectively, on the Company’s Class A and Class B common stock. In thenine months ended* April 30, 2026and2025*, the Company paid aggregate cash dividends of $4.8 million and $4.0 million, respectively.

On* May 29, 2026,the Company’s Board of Directors declared a cash dividend on its Class A and Class B common stock of $0.07 per share payable on or about June 18, 2026to stockholders of record as of the close of business on June 9, 2026.*

Stock Repurchases

The Company has an existing stock repurchase program authorized by its Board of Directors for the repurchase of shares of the Company’s 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 thenine* months ended* April 30, 2026*, the Company repurchased 391,186 shares of its Class B common stock for an aggregate purchase price of $19.0 million. In thenine months ended* April 30, 2025,the Company repurchased 221,823 shares of its Class B common stock for an aggregate purchase price of $10.1 million. At April 30, 2026*,3.8 million shares remained available for repurchase under the stock repurchase program.

Shares Withheld for Employee Taxes

In thenine months ended* April 30, 2026and2025*, the Company withheld 10,852 and 157,180 shares, valued at$0.5 million and $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 arenot repurchased under the Company’s share repurchase program.

2024 Equity Incentive Plan

The2024 Equity Incentive Plan is intended to provide incentives to officers, employees, directors, and consultants of the Company, including stock options, stock appreciation rights, DSUs, and restricted stock. At* July 31, 2025*, the Company had 250,000 shares of Class B common stock reserved for the grant of awards under the2024 Equity Incentive Plan of which 23,934 shares were available for future grants. In* September 2025,the Company’s Board of Director’s approved an amendment to the Company’s2024* Equity Incentive Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 175,000 shares, which was approved by the Company’s stockholders at its annual meeting in* December 2025.*

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2025 Equity Growth Program

On* September 18, 2025,the Company granted 109,975 DSUs to certain of its executive officers, employees, and consultants under the2025* Equity Growth Program (under its2024 Equity Incentive Plan). The DSUs which convert into Class B common stock upon vesting, vest inthree substantially equal installments, thefirst was in* February 2026,and the others are February 2027,and February 2028,subject to continued service. In February 2026,which represented thefirst* vesting date under the program, the Company issued 26,681 shares of its Class B common stock based on vesting of prior grants and elections made by grantees with respect to the vesting dates. To satisfy statutory tax withholding obligations, the Company withheld 10,852 shares and remitted cash to the tax authorities in lieu of delivering those shares, recording the withheld shares as treasury stock. The number of shares issuable on each vesting date vary based on the market price of Class B common stock relative to the grant price, ranging from 50% to 267%, and up to 400% for certain executive officers. Grantees* mayelect to defer vesting to the next scheduled vesting date for some or all DSUs. The Company estimated that the fair value of the DSUs on the date of grant was $13.3 million, which is being recognized on a graded vesting basis over the requisite service periods ending in February 2028.The Company used a risk neutral Monte Carlo simulation method in its valuation of the DSUs, which simulated the range of possible future values of the Company’s Class B common stock over the life of the DSUs. The weighted average grant date fair value per DSU was $120.70. At April 30, 2026*, there was $7.4 million of total unrecognized compensation cost related to non-vested DSUs.

NRS Restricted Common Stock

Effective as of* June 30, 2022,restricted shares of NRS’ Class B common stock representing 1.2% of its outstanding capital stock on a fully diluted basis were granted to certain NRS employees. The restrictions on the shares lapse inthree* installments, thefirst was in* June 2024,and the others were scheduled to vest in June 2026,and June 2027 (*see “Exchange of NRS Restricted Common Stock for IDT DSUs” below). The estimated fair value of the restricted shares on the grant date was $3.3 million, which is recognized over the vesting period.

Exchange of NRS Restricted Common Stock for IDT DSUs

On* January 21, 2026,the Company exchanged unvested shares of NRS Restricted Common Stock, representing approximately 0.71% of NRS on a fully diluted basis and 0.73% on an outstanding basis, held by certain employees for an aggregate of 72,182 DSUs of the Company. The DSUs are subject to the same terms and conditions as DSUs previously issued under the Company’s2025* Equity Growth Program and vest inthree substantially equal tranches, thefirst of which was in* February 2026,and the others of which are in February 2027,and February 2028.*

The transaction was accounted for as a modification under ASC718, Compensation—Stock Compensation. The fair value of the DSUs granted was estimated at approximately $4.2 million, resulting in incremental compensation cost of approximately $0.6 million.

Amended and Restated Employment Agreement with Abilio (“Bill”) Pereira

On* December 21, 2023,the Company entered into an Amended and Restated Employment Agreement with Bill Pereira, the Company’s President and Chief Operating Officer. The agreement provides for, among other things, certain equity grants and a contingent bonus subject to the completion of certain financial milestones as set forth in the agreement. In fiscal2025,* two of these milestones were achieved, for which the Company issued to Mr. Pereira 39,155 shares of its Class B common stock in thethree months ended* April 30, 2024with an issue date value of $1.5 million, and the Company issued to Mr. Pereira 39,155 shares of its Class B common stock in thethree* months ended* October 31, 2024with an issue date value of $1.8 million. In thethree* months ended* April 30, 2025,the Company accrued $1.0 million in connection with the achievement of an additional milestone, which is payable in cash over3* years.

Note15—Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

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The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

There wereno shares excluded from the calculation of diluted earnings per share in thethree andnine months ended* April 30, 2026and2025*.

Note16—Accumulated Other Comprehensive Loss

The accumulated balances for each classification of other comprehensive loss were as follows:

Note17—Commitments and Contingencies

Legal Proceedings

As disclosed in the2025 Form10-K, the Company 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 the Company, and found that, contrary to the plaintiffs’ allegations, the class sufferedno damages. The plaintiffs filed an appeal to which the Company 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 the Company and found that Plaintiff and the class sufferedno* damages.

In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and havenot been finally adjudicated. Although there can beno assurance in this regard, the Company believes thatnone of the other legal proceedings to which the Company is a party will have a material adverse effect on the Company’s results of operations, cash flows, or financial condition.

Sales Tax Contingency

On* June 21, 2018,the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state mayrequire a remote seller withno* 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 thatone or more jurisdictions* mayassert that the Company has liability for periods for which it hasnot* collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect the Company’s 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 the Company’s operations, and if such changes were made it could materially and adversely affect the Company’s business, financial position, and operating results.

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Purchase Commitments

At* April 30, 2026*, the Company had purchase commitments of $11.5 million primarily for equipment and services.

Performance Bonds

The Company has performance bonds issued throughthird parties for the benefit of various states in order to comply with the states’ financial requirements for money remittance licenses and telecommunications resellers. At* April 30, 2026* and* July 31, 2025*, the Company had aggregate performance bonds outstanding of $24.6 million and $33.8 million, respectively.

Note18—Other Income, Net

Other income, net consists of the following:

Note19—Income Taxes

The Company’s provision for income taxes as a percentage of pretax earnings (“effective tax rate”) was mainly due to differences in the amount of taxable income earned in various taxing jurisdictions. For thenine months ended* April 30, 2026and2025*, the Company’s effective tax rate was 24.4% and 25.5%, respectively.

Note20—Defined Contribution Plan

The Company maintains a401(k) Plan available to all employees meeting certain eligibility criteria. The plan permits participants to contribute up to the maximum amount allowed by law. The plan provides for discretionary matching contributions that vest over thefirst five years of employment. The Company contributed cash of $1.1 million in thethree andnine months ended* April 30, 2026and2025* to the Company’s401(k) Plan for matching contributions.

Note21—Recently Issued Accounting StandardsNot Yet Adopted

In* September 2025,the FASB issued ASU2025*-06 –Intangibles–* Goodwill and Other*–* Internal-Use Software* (Subtopic350-40):Targeted Improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after* December 15, 2027,*and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach. The Company is currently in the process of evaluating the effects of this pronouncement on its consolidated financial statements.

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