IDT CORP

Note1—Description of Business and Summary of Significant Accounting Policies

Description of Business

IDT is a provider of fintech and communications solutions focused on certain under-served consumer andB2B markets. Our offerings are built around a common core of strategic assets, and we seek to maximize the synergies among them to achieve exceptional growth and profitability.

As of* July 31, 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 90.0% of the equity ofnet2phone 2.0 and 80.2% of the equity of NRS.

Basis of Consolidation

The method of accounting applied to long-term investments, whether consolidated, equity, or cost, involves evaluating the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the entity in which the Company owns an interest and identifying any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company’s controlled subsidiaries and the variable interest entity in which the Company is the primary beneficiary (see Note13). All significant intercompany accounts and transactions between the consolidated entities are eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results* may*differ from those estimates.

Reclassifications

During fiscal2026, the Company reclassified certain prepaid expenses to trade accounts receivable. Specifically, in the consolidated balance sheet at* July 31, 2025,$2.1 million previously reported within "Prepaid expenses" was reclassified to "Trade accounts receivable." In the consolidated statements of cash flows for the fiscal years ended July 31, 2025and2024,* cash provided by (used in) operating activities of $0.5 million and $(1.0) million, respectively, previously reported within "Prepaid expenses, other current assets, and other assets" were reclassified to "Trade accounts receivable."

During fiscal2026, the Company also reclassified settlement assets and disbursement prefunding in the consolidated statements of cash flows, which had previously been included within "Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets." In the consolidated statements of cash flows for the fiscal years ended* July 31, 2025and2024,* cash (used in) provided by operating activities of $(13.9) million and $8.2 million, respectively, previously reported within "Settlement assets, disbursement prefunding, prepaid expenses, other current assets, and other assets" were reclassified to be presented as a separate line item, "Settlement assets and disbursement prefunding."

Accounting for Investments

Investments in businesses that the Company doesnot control, but in which the Company can exercise significant influence over operating and financial matters are accounted for using the equity method. Investments in which the Company cannot exercise significant influence over operating and financial matters are accounted for at fair value, with changes in fair value recognized in net income. For such investments without a readily determinable fair value, the Company elects the measurement alternative described below under “Equity Investments.” Investments in hedge funds are accounted for using the equity method unless the Company’s interest is so minor that it has virtuallyno influence over operating and financial policies, in which case these investments are accounted for under the measurement alternative described below. The Company periodically evaluates its equity investments accounted for under the equity method and the measurement alternative for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in “Other expense, net” in the accompanying consolidated statements of income, and a new basis in the investment is established.

F-8

Revenue Recognition

The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, in accordance with afive-step process as follows: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the Company satisfies a performance obligation.

Direct Cost of Revenues

Direct cost of revenues consists primarily of termination and origination costs, toll-free costs, and network costs—including customer/carrier interconnect charges and fiber circuit charges. These costs include an estimate of charges for which invoices havenot yet been received and estimated amounts for pending disputes with other carriers. Direct cost of revenues also includes regulatory costs and depreciation of capital expenditures related to the Company's telecom network and hardware as well as the NRS PAY terminals, andnet2phone provided phone systems. Direct cost of revenues also includes the cost of airtime top-up minutes, the cost of NRS’ POS terminals sold, the costs of cloud computing arrangements hosted by a vendor in the production environment incurred by thenet2phone segment and NRS,net2phone’s colocation costs for data centers wherenet2phone isnot fully operational in the cloud,net2phone’s cost of equipment sold, and commissions paid to disbursement agents, sales agents, and retailers for BOSS Money’s originations and distributions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity ofthree months or less when purchased to be cash equivalents.

Debt Securities

The Company’s investments in debt securities are classified as “available-for-sale.” Available-for-sale debt securities are required to be carried at their fair value, with unrealized gains that are considered temporary in nature recorded in “Accumulated other comprehensive loss” in the accompanying consolidated balance sheets. For available-for-sale debt securities with unrealized losses, the portion of the unrealized loss that is the result of a credit loss is recognized as an allowance and a corresponding expense is recorded in “Other expense, net” in the consolidated statements of income. Any portion of the unrealized loss that isnot the result of a credit loss is recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets.

The Company uses the specific identification method in computing the gross realized gains and gross realized losses on the sales of debt securities.

Equity Investments

Investments in equity securities (except those accounted for under the equity method or that result in consolidation) are measured at fair value, with changes in fair value recognized in net income. For investments in equity securities without a readily determinable fair value, the Company elects the measurement alternative and measures these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. At each reporting date, the Company reassesses whether the investment still qualifies for this measurement alternative. Further, at each reporting date, the Company performs a qualitative assessment to evaluate whether the investment is impaired. If the qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than its carrying value, the carrying amount of the investment will be reduced and the resulting loss recognized in “Other expense, net” in the accompanying consolidated statements of income in the period the impairment is identified.

F-9

Settlement Assets and Settlement Liabilities

Settlement assets represent funds to be received for unsettled international money remittance and related value/payment transfer services. The receivables are due from financial institutions and agents for payment instruments sold and amounts advanced by the Company to certain agents for operational and local regulatory purposes. These receivables are outstanding from the day of the sale of the payment instrument until the financial institution or agent remits the funds to the Company. The Company provides an allowance for the portion of the receivable estimated to become uncollectible based on its history of collection experience, known collection issues, consumer credit card chargebacks and insufficient funds, and other matters the Company identifies in its routine collection monitoring.

Settlement liabilities represent obligations relating to amounts payable under international money remittance and related value/payment transfer services. These obligations are recognized by the Company at the time the underlying transaction occurs. The Company records corresponding settlement assets for the funds to be received.

Disbursement Prefunding

The Company maintains relationships with disbursement partners in various countries for its BOSS Money and IDT Digital Payments services. The Company maintains prefunding balances with these disbursement partners so they can satisfy the Company’s customer liabilities. The Company doesnot earn interest on these balances. The balances arenot compensating balances and arenot legally restricted.

Inventory

Inventory consists primarily of NRS’ POS terminals that it sells to retailers. Inventory is measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory is included in Other current assets on the consolidated balance sheets.

Property, Plant, and Equipment and Intangible Assets

Equipment, computer software, and furniture and fixtures are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives, which are as follows: equipment—5 to 7 years; computer software—3 years; and furniture andfixtures—5 years. Leasehold improvements are recorded at cost and are depreciated on a straight-line basis over the term of their lease or their estimated useful lives, whichever is shorter.

Non-compete agreements, customer relationships, and tradenames are amortized over their estimated useful lives (see Note12).

The Company tests the recoverability of its property, plant, and equipment and intangible assets with finite useful lives whenever events or changes in circumstances indicate that the carrying value of the asset* may**not* be recoverable. The Company tests for recoverability based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, the Company will record an impairment loss, if any, based on the difference between the estimated fair value and the carrying value of the asset. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Cash flow projections and fair value estimates require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, the Company* may*be required to record impairments in future periods and such impairments could be material.

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Goodwill

Goodwill is the excess of the consideration paid for a business over the fair value of the identifiable net assets acquired. Goodwill and other indefinite lived intangible assets arenot amortized. Instead, these assets are reviewed annually (or more frequently under various conditions) for impairment. The Company has the option to perform a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. However, the Company* mayelect to perform the quantitative goodwill impairment test even ifno* indications of a potential impairment exist.

When performing its annual quantitative goodwill impairment test, or an interim test when conditions warrant, the Company compares the fair value of its reporting units with their carrying amounts. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized wouldnot exceed the total amount of goodwill allocated to that reporting unit. Additionally, the Company considers income tax effects from any tax-deductible goodwill on the carrying amount of its reporting unit when measuring the goodwill impairment loss, if applicable. The fair value of the reporting units is estimated using discounted cash flow methodologies, as well as consideringthird party market value indicators. The Company’s use of a discounted cash flow methodology includes estimates of future revenue based upon budgets and projections. The Company also develops estimates for future levels of gross and operating profits and projected capital expenditures. The Company’s methodology also includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors. Calculating the fair value of the reporting units requires significant estimates and assumptions by management. Should the estimates and assumptions regarding the fair value of the reporting units prove to be incorrect, the Company* may*be required to record impairments to its goodwill in future periods and such impairments could be material.

Advertising Expense

Cost of advertising is charged to selling, general and administrative expense in the period in which it is incurred. In fiscal2026, fiscal2025, and fiscal2024, advertising expense was $21.9 million, $20.9 million, and $19.0 million, respectively.

Capitalized Internal Use Software Costs

The Company capitalizes the cost of internal-use software that has a useful life in excess ofone year. These costs consist of payments made tothird parties and the salaries of employees working on such software development. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously didnot perform. Software maintenance and training costs are charged to expense in the period in which they are incurred. Capitalized internal use software costs are amortized on a straight-line basis over their estimated useful lives ofthree years. Amortization expense related to such capitalized software in fiscal2026, fiscal2025, and fiscal2024 was $13.3 million, $13.2 million, and $12.8 million, respectively. Unamortized capitalized internal use software costs at* July 31, 2026and2025* were $19.2 million and $18.5 million, respectively.

Repairs and Maintenance

The Company charges the cost of repairs and maintenance, including the cost of replacing minor itemsnot constituting substantial betterment, to selling, general and administrative expense or technology and development expense as these costs are incurred.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries denominated in foreign currencies are translated to U.S. dollars at end-of-period rates of exchange, and their monthly results of operations are translated to U.S. dollars at the average rates of exchange for that month. Gains or losses resulting from such foreign currency translations are recorded in “Accumulated other comprehensive loss” in the accompanying consolidated balance sheets. Foreign currency transaction gains and losses are reported in “Other expense, net” in the accompanying consolidated statements of income.

F-11

Income Taxes

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely thannot that some portion or all of a deferred tax asset willnot be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change.

The Company uses atwo-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. The Company determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of tax benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result inone or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability.

The Company classifies interest and penalties on income taxes as a component of income tax expense.

Contingencies

The Company accrues for loss contingencies when both (a) information available prior to issuance of the financial statements indicates that it is probable that a liability had been incurred at the date of the financial statements and (b) the amount of loss can reasonably be estimated. When the Company accrues for loss contingencies and the reasonable estimate of the loss is within a range, the Company records its best estimate within the range. Whenno amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company discloses an estimated possible loss or a range of loss when it is at least reasonably possible that a loss* may*have been incurred.

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 determined 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.

F-12

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 fiscal2026, fiscal2025, or fiscal2024.

Stock-Based Compensation

The Company recognizes compensation expense for its grants of stock-based awards based on the estimated fair value on the grant date. Compensation cost for awards is recognized using the straight-line method over the requisite service period, which is usually the vesting period. Stock-based compensation is included in selling, general and administrative expense and technology and development expense.

Vulnerability Due to Certain Concentrations

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, restricted cash and cash equivalents, debt securities, equity investments, and trade accounts receivable. The Company holds cash and cash equivalents at several major financial institutions, which often exceed FDIC insurance limits. Historically, the Company hasnot experienced any losses due to such concentration of credit risk. The Company’s temporary cash investments policy is to limit the dollar amount of investments with anyone financial institution and monitor the credit ratings of those institutions. While the Company* maybe exposed to credit losses due to the nonperformance of the holders of its deposits, the Company doesnot* expect the settlement of these transactions to have a material effect on its results of operations, cash flows, or financial condition.

The concentration of credit risk with respect to trade accounts receivable is limited due to the large number of customers in various geographic regions and industry segments comprising the Company’s customer base. Revenue fromno single customer accounted for more than10% of consolidated revenues in fiscal2026, fiscal2025 or fiscal2024. However, revenue from the Company’sfive largest customers collectively accounted for 12.5%,8.9%, and 10.3% of its consolidated revenues in fiscal2026, fiscal2025, and fiscal2024, respectively. The Company’s customers with thefive largest receivable balances collectively accounted for 9.9% and 20.4% of the consolidated gross trade accounts receivable at* July 31, 2026and2025*, respectively. This concentration of customers increases the Company’s risk associated with nonpayment by those customers. In an effort to reduce such risk, the Company performs ongoing credit evaluations of its significant customers.

F-13

Allowance for Credit Losses

The Company maintains an allowance for credit losses on its trade accounts receivable based on a forward-looking current expected credit loss ("CECL") model. In estimating expected credit losses, the Company considers the probability of recoverability of accounts receivable based on historical write-off experience, net of recoveries, current collection trends, the aging of accounts receivable, and general economic factors, including bankruptcy rates. Allowances generally increase as receivables age, and specific accounts* maybe fully reserved when known collection issues exist, such as pending bankruptcies. Account balances are written off against the allowance when recovery is determined to be unlikely. The Company has elected the practical expedient under ASU2025*-05 for its current trade accounts receivable. Under this expedient, rather than developing separate forecasts of future economic conditions, the Company assumes in estimating expected credit losses that current conditions as of the balance sheet date willnot change over the assets' remaining lives.

The changes in the allowance and reserves deducted from asset accounts is as follows:

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Fair Value Measurements

Fair value of financial and non-financial assets and liabilities is defined as an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Thethree-tier hierarchy that prioritizes the inputs to valuation techniques used to measure fair value is as follows:

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Assessing the significance of a particular input requires judgment and* may*affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

Leases

The Company determines whether an arrangement is a lease at the inception of the arrangement based on the terms and conditions in the contract. A contract contains a lease if there is an identified asset which the Company has the right to control. The Company records a right-of-use (“ROU”) asset and a lease liability on the balance sheet on the lease commencement date for all leases with terms longer than12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The ROU asset and lease liability are recorded based on the present value of the Company’s obligation to make payments over the lease term. The present value of the lease payments is calculated using the incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company recognizes lease cost for its leases on a straight-line basis over the lease term.

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 Company adopted this update prospectively in this Annual Report on Form10-K for the fiscal year ended* 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.

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 current expected credit losses ("CECL") 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 current 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. It is intended 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 early adopted this practical expedient during fiscal2026. The adoption didnot have a material impact on the Company’s consolidated financial statements.

F-15

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, making the guidance neutral to different software development methodologies, including Agile and other iterative approaches. The amendments are effective for the Company for annual reporting periods beginning August 1, 2028 (fiscal year2029*), with early adoption permitted. An entity* mayapply the amendments prospectively, retrospectively, or on a modified retrospective basis. Based on its preliminary assessment, the Company doesnot* expect adoption to have a material effect on its consolidated financial statements.

In* November 2024,the FASB issued ASU2024*-03, Income Statement-Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic220*-40), to improve disclosures about an entity’s expenses by requiring more detailed information about the types of expenses underlying commonly presented income statement captions. The amendments will require the Company to disclose, in tabular format at each interim and annual reporting period, disaggregated 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 amountsnot* separately disclosed. The amendments are effective for the Company's fiscal year beginning on* August 1, 2027 (fiscal year2028*) and for interim periods beginning* August 1, 2028 (fiscal year2029*), with early adoption permitted. The amendments* maybe applied either prospectively or retrospectively to any or all prior periods presented, and the Company is currently evaluating the timing of adoption and the transition method. The Company doesnot* expect adoption to have a material effect on its financial position or results of operations, but expects that adoption will result in additional disclosures in the notes to its consolidated financial statements.

Note2—Business Combination

On* May 1, 2026,NRS completed an asset purchase agreement (the “Agreement”) under which it acquired certain assets and assumed 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. 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. Accordingly, NRS consolidates NRS OnCore under the voting interest model in accordance with ASC810,* Consolidation.

The aggregate purchase consideration was 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. In addition, NRS assumed liabilities of $0.1 million in connection with the transaction, resulting in a total acquisition date fair value of $4.9 million.

The consideration also includes contingent earnouts and bonuses withno maximum payment because they are based on the IDT share price and are contingent upon the achievement of revenue, gross profit, and net income milestones, which the Company currently believes arenot probable to be achieved. Therefore,no liability was recorded for the contingent earnouts and bonuses. The Company has determined that the acquired set of assets and activities constitute a business and is accounting for the transaction as a business combination under ASC805, Business Combinations. The acquired assets consist primarily of vendor and customer relationships, and the assumed liabilities include certain operating liabilities.

The total consideration has been allocated entirely to vendor and customer relationships, which represent the sole identified intangible asset and are being amortized over an estimated useful life offive years. The acquisition is expected to integrate Oncore Digital’s advertising technology, demand relationships, and publisher network with NRS' screen network andfirst-party transaction data to create a more comprehensive and unified digital advertising offering.

The Company’s pro forma results of operations as if the acquisition occurred as of* August 1, 2023werenot* materially different from the actual results of operations. Revenue and earnings of NRS OnCore since the acquisition date included in the consolidated income statements for the reporting period werenot material.

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Note3—Business Segment Information

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.

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.

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.

F-17

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 consolidated statements of income.

Operating results for the Company'sfour reportable business segments, together with Corporate, are presented below. Corporate isnot a reportable segment and is included to reconcile segment results to the consolidated totals.

F-18

Other segment items include severance expense and other operating gains and losses.

Total assets for the reportable segments arenot provided because a significant portion of the Company’s assets service multiple segments and the Company doesnot track such assets separately by segment.

Geographic Information

Net long-lived assets (which consists of Property, plant and equipment, net and Operating lease right-of-use assets) held outside of the United States, which are located primarily in Europe and South America, were as follows:

Note4—Revenue Recognition

Contracts with Customers

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications, mobile top-up, and 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, including unified communications as a service (“UCaaS”), contact center as a service (“CCaaS”) and AI Agent and Coach solutions, which are recognized over time as services are provided. BOSS Money's 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.

F-19

IDT Digital Payments

IDT Digital Payments is sold direct-to-consumer and through distributors and retailers in the same manner as BOSS Revolution (see below). The Company doesnot terminate the minutes in its IDT Digital Payments transactions. The Company’s performance obligation is to recharge (top-up) the airtime balance of a mobile account on behalf of the Company’s customer. The Company has contracts with various mobile operators or aggregators to provide the IDT Digital Payments service. The Company determined that it is the principal in substantially all its IDT Digital Payments transactions as the Company controls the service to top-up a mobile account on behalf of the Company’s customer. However, for the portion of its IDT Digital Payments business where the Company hasno customer service responsibilities,no inventory risk, and doesnot establish the price, the Company determined that, as the Company isnot considered to control the arrangement, it acts as an agent of the mobile operators. The Company records gross revenues based on the amount billed to the customer when it is the principal in the arrangement and records revenue net of the associated costs incurred when it acts as an agent in the arrangement. The transfer of control happens at the point in time that the airtime is recharged, which is when the Company has a right to payment and the customer has accepted the service. Accordingly, the performance obligation is satisfied, and revenue is recognized when the recharge of the mobile account occurs.

BOSS Revolution Direct-to-Consumer

BOSS Revolution direct-to-consumer is offered on a pay-as-you-go basis, in unlimited plans, in bundles of minutes, or through a savings pass program. The customer prepays for service in all cases, which results in a contract liability (deferred revenue). The contract term for pay-as-you-go plans is minute-to-minute and includes separate performance obligations for the series of material rights to renew the contract. The performance obligation is satisfied immediately after it arises, and the amount of consideration is known when the obligation is satisfied. Since the Company’s satisfaction of its performance obligation and the customer’s use of the service occur simultaneously, the Company recognizes revenue at the point in time when minutes are utilized, since the customer obtained control and the Company has a present right to payment. For unlimited plans, the Company has a stand-ready obligation to provide service over time for an agreed-upon term. Unlimited plans include fixed consideration over the term. Plan fees for unlimited plans are generally refundable at the request of the customer up tothree days after payment if there wasno usage. Since the Company’s satisfaction of its performance obligation and the customer’s use of the service occur over the term of the plan, the Company recognizes revenue over a period of time as the service is rendered. The Company recognizes revenue as time elapses because it reflects the pattern by which the Company satisfies its performance obligation through the transfer of service to the customer. The fixed upfront consideration is recognized evenly over the service period, which is generally24 hours,7 days, orone month.

For bundles of minutes, the customer prepays for a fixed quantity of minutes over a specified period. The Company recognizes revenue at the point in time when minutes are utilized, consistent with the recognition pattern for pay-as-you-go plans. Unused minutes are recognized as revenue (breakage) upon expiration of the plan, at which point the Company's remaining performance obligation is extinguished.

For the savings pass program, the customer pays a recurring membership fee in exchange for a discount on standard per-minute rates for calls made during the membership period. The membership fee represents a stand-ready obligation to provide the discount over the membership term and is recognized over that period on the same basis as unlimited plans. Revenue from calls made under the discounted rate is recognized at the point in time when minutes are utilized, consistent with the recognition pattern for pay-as-you-go plans.

BOSS Revolution Sold Through Distributors and Retailers

BOSS Revolution sold through distributors and retailers is the same service as BOSS Revolution sold direct-to-consumer. The Company sells capacity to international calling minutes to retailers, or to distributors who resell to retailers. The retailer or distributor is the Company’s customer in these transactions. The Company’s sales price to retailers and distributors, net of discounts, is less than the end user rate for BOSS Revolution minutes. The customer or the Company* mayterminate their agreement at any time uponthirty* days written notice without penalty. Retailers* may*sell BOSS Revolution on a pay-as-you-go basis or in unlimited plans. As described above, for pay-as-you-go, the Company recognizes revenue at the point in time when minutes are utilized, and for unlimited plans, the Company recognizes revenue over a period of time as the service is rendered. Retailers and distributors also receive initial commissions upon sale to end users, and renewal commissions when certain end users subsequently purchase minutes directly from the Company. Initial and renewal commission payments are accounted for as a reduction of the transaction price over time as the end user uses the service.

F-20

IDT Global

IDT Global services are offered to both postpaid and prepaid customers. Postpaid customers are billed in arrears and typically consist of credit-worthy companies such as Tier1 carriers and mobile network operators. Prepaid customers are typically smaller communications companies and independent call aggregators. There isno performance obligation until the transport and termination of international long-distance calls commences. The initial contract durations range fromsix months toone year, and generally have successive extensions. During the initial term, the contract can only be terminated in certain instances (such as bankruptcy of either party, damage to the other party’s network, fraud, or breach of contract). However,no penalties are applied if the agreement is terminated in the initial term. After the initial term has expired, either party* mayterminate the agreement with notice of30* days to60 days depending on the agreement. The term of the contract is essentially minute-to-minute as there isno penalty for an early termination andno obligation to send traffic.

Each iteration is a separate optional purchase that occurs over the contract duration (that is, minute-by-minute). The performance obligation is satisfied at a point in time (as the minutes are transferred) because the provision of the service and the satisfaction of the performance obligation occur essentially simultaneously. Revenue is recognized at the point in time upon delivery of the service.

The Company hasnot generally entered into contracts that have retroactive pricing features. Additionally, as the performance obligations are considered minute-by-minute obligations in the original contract, any modification of the original contract that leads to a conclusion that there is a new contract wouldnot result in any adjustment related to the original contract’s consideration.

The Company provides discounts to its larger customers based on the expectation of a significant volume of minutes that are consistent with that class of customer in the wholesale carrier market. The discounts donot provide a material right to the customer because the customer receives the same pricing for all usage under the contract.

IDT Global’s contracts* mayinclude tiered pricing based on minute volumes. The Company determined that its retroactive tiered pricing should be accounted for as variable consideration because the final transaction price is unknown until the customer completes or fails to complete the specified threshold. Currently, contracts with retroactive tiered pricing arenot* material. The Company estimates the amount of variable consideration to include in the transaction price only to the extent that it is probable that a subsequent change in the estimate wouldnot result in a significant revenue reversal.

F-21

The Company enters into Notification of Reciprocal Transmission (“NORT”) transactions, in which the Company commits to purchase a specific number of wholesale carrier minutes to specific destinations at specified rates, and the counterparty commits to purchase from the Company a specific number of minutes to specific destinations at specified rates. The number of minutes purchased and sold isnot necessarily the same. The rates in these reciprocal transactions are generallynot at prevailing market rates, and the amounts paid to the counterparty in excess of market rates are reflected as a reduction in revenue received from the customer. In addition, the Company enters into transactions in which it swaps minutes with another carrier. The Company recognizes revenue and the related direct cost of revenue for these reciprocal and swap transactions based on the fair value of the minutes.

IDT Global’s NORT contracts include the promise of minimum guaranteed amounts of traffic. The performance obligation represents a stand ready obligation to provide the specified number of minutes over the contractual term. The initial terms of NORT contracts generally range fromone month tosix months. Since the Company’s satisfaction of its performance obligation of routing calls to their destination includes a minimum guaranteed amount of traffic, the Company recognizes revenue over a period of time as the service is rendered. The customer simultaneously receives and consumes the benefits provided by the Company’s performance as the Company performs. The Company uses an output method as the usage of minutes occur because it reflects the pattern by which the Company satisfies its performance obligation through the transfer of service to the customer.

NRS

NRS earns revenue from (1) merchant services’ commissions for the processing of credit and debit card transactions on the POS terminals, (2) a monthly recurring charge for its software license, software upgrades, and help desk support (collectively, the “Software services”), (3) fees for advertising on the POS terminals, (4) sales of the data collected by the POS terminals to data aggregators and others, and (5) the sale of POS terminals to retailers.

NRS’ merchant services enable retailers to accept and process payments made by credit cards, debit cards, electronic benefits transfer, and other forms of electronic payment. Merchant services revenue includes a monthly fee plus a percentage of the transaction amount plus a flat rate per transaction. There isno separate charge for the credit card reader provided to the retailers, which remains NRS’ property and must be returned upon termination of the services. Merchant services are provided as an agent of the payment processor or funding bank, therefore NRS records revenue net of the associated costs incurred. The performance obligation is satisfied, and revenue is recognized when the payment is processed.

The retailers’ use of the credit card reader is a separate performance obligation that meets the definition of a lease. The lease consideration is included in the merchant services’ monthly recurring charge. NRS accounts for the non-lease and lease components as a single performance obligation in accordance with Accounting Standards CodificationRevenue from Contracts with Customers (Topic606*)(“ASC606”*) because the timing and pattern of transfer of both components is the same, and the non-lease component is the predominant component.

NRS sells advertising on the POS terminal’s high-definition screens through internal sales agents,third-party brokers, and real-time auctions on exchange platforms known as programmatic advertising. For advertising sold through its agents or a broker, as well as for a portion of its programmatic advertising, NRS is the principal because it is responsible for performing the service by delivering advertisements according to the customer’s requirements. For the portion of its programmatic advertising where NRS doesnot control the ad space before it is provided to the customer, NRS acts as an agent of the advertising exchange. NRS records gross revenues based on the amount billed to the customer when it is the principal in the arrangement and records revenue net of the associated costs incurred when it acts as an agent in the arrangement. The performance obligation is satisfied, and revenue is recognized during the period of time when the advertisement is broadcast on the POS terminal.

NRS captures targeted, daily data from the POS terminals that it sells to customers. The performance obligation is the provision of a data report, generallyone report per POS terminal per week, where each report is a distinct good that isnot interrelated with another report. Customers purchase data reports generally for an annual fee per POS terminal. The consideration is variable because it depends on the number of POS terminals selected. The performance obligation is satisfied, and revenue is recognized at the point in time when the customer receives a data report because the customer obtains control and has the benefit of the data. The amount recognized per report is the same for each report since each report has the same standalone value to the customer.

F-22

NRS sells its POS terminals to retailers. The terminals include a cash register, a barcode scanner, retailer and customer-facing high-definition screens, a receipt printer, and a credit card reader. The arrangement with the customer includes the equipment sale including embedded POS software, as well as the Software services. Each hardware component and the Software services is a separate performance obligation because each is a distinct good or service that can be obtained from alternate providers. The transaction price is allocated to each performance obligation based on the relative standalone selling price (“SSP”). The SSP reflects the amount the Company would charge for each performance obligation if it were sold separately in a standalone sale to similar customers in similar circumstances. The SSP for POS terminals is generally estimated using the cost plus expected gross margin approach. Equipment revenue is recognized at the point in time when the customer has physical possession of the POS terminal, which is when the customer can use the POS terminal and embedded software and has the risks and rewards of ownership. Revenue from the Software services is recognized ratably over the term of the contract because satisfaction of the performance obligation and the customer’s use of the service occur evenly over the term.

net2phone

net2phone earns revenue primarily through the provision of integrated cloud-based UCaaS and CCaaS offerings for businesses. The services are priced on a per-seat basis, and its subscription revenue is a monthly fee per seat. Revenue is primarily recognized over the monthly service period. Revenue from the sale of telephone equipment is recognized at a point in time when the equipment is delivered to the customer.

During fiscal year2026, net2phone launched complementary products to their UCaaS and CCaaS offerings called AI Agent and Coach (an AI-based contact center performance optimization tool). These revenue streams are priced according to fixed bundles of interaction credits and recognized as subscription revenue on a monthly basis.

net2phone leases telephone equipment to certain customers, which is a separate performance obligation that meets the definition of a lease. The lease consideration is included in the monthly recurring charge.net2phone accounts for the non-lease and lease components as a single performance obligation in accordance with ASC606 because the timing and pattern of transfer of both components is the same, and the non-lease component is the predominant component.

BOSS Money

Revenues from international money transfers are primarily from transaction fees charged to the customer based on the amount sent and the send and receive locations. In addition, revenues are earned on the foreign currency exchange based on the difference between purchasing currency at wholesale exchange rates and selling the currency at retail exchange rates. The Company satisfies its international money transfer performance obligations and recognizes revenue at a point in time when the designated recipient receives the funds, as the Company has a right to payment and the customer has use of the service.

Disaggregated Revenues

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

F-23

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

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* July 31, 2026*. The table excludes contracts that had an original expected duration ofone year or less.

F-24

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 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 consolidated balance sheets as “Deferred revenue." The Company’s revenue recognized in fiscal2026, fiscal2025, and fiscal2024 from amounts included in the contract liability balance at the beginning of the period was $15.2 million, $17.5 million, and $22.1 million, respectively.

The Company estimates its expected breakage revenue by revenue stream recorded each month, based on inputs and assumptions about usage of the deferred revenue balances. The Company used its historical deferred revenue usage data by revenue stream to calculate the percentage of deferred revenue by month that will become breakage. The historical data indicated that customers utilized a very high percentage of minutes purchased in thefirst three months. The Company periodically reviews its estimates based on updated data and adjusts the monthly estimates accordingly.

Receivables and contract balances from contracts with customers for the fiscal years ended* July 31, 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. Costs to obtain a contract are capitalized and amortized on a straight-line basis over the estimated period of benefit.

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.

F-25

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

In fiscal2026, fiscal2025, and fiscal2024, the Company’s amortization of deferred customer contract acquisition costs was $5.5 million, $5.7 million, and $5.8 million, respectively.

Note5—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms 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.

The Company has also elected to apply the practical expedient for short-term leases under which it doesnot recognize a lease liability or a right-of-use asset for leases with a term of12 months or less. The Company recognizes short-term leases on a straight-line basis.

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

F-26

In fiscal2026, fiscal2025, and fiscal2024, the Company obtained right-of-use assets of $0.5 million, $0.6 million, and $0.9 million, respectively, in exchange for new operating lease liabilities.

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

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 consolidated balance sheets that equal the total of the same amounts reported in the consolidated statements of cash flows:

Restricted cash and cash equivalents included the following:

F-27

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. IDT Services (IDTS) is subject to similar regulatory obligations under the Maltese financial services regulations, which also mandate the safeguarding of electronic money, the segregation of the cash held for customer deposits from any other cash that IDTS holds, and the use of that 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 consolidated balance sheets. As of* July 31, 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* July 31, 2026and2025*, 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 $43.3 million, $36.3 million, and $50.1 million in fiscal2026, fiscal2025, and fiscal2024, respectively. Realized gains and realized losses from sales of debt securities werenot material in fiscal2026, fiscal2025, or fiscal2024.

F-28

The contractual maturities of the Company’s available-for-sale debt securities at* July 31, 2026* were as follows:

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

F-29

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

Note8—Equity Investments

Equity investments consist of the following:

Howard Jonas, 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 assessments, 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.

F-30

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-held Israeli company for initial consideration of $500,000, paid at closing. An additional $500,000 was paid in August 2026upon the successful launch of the investee's mobile application, resulting in total consideration of $1.0 million, which was recorded as an increase to the cost basis of the investment. 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 control or significant influence over the investee.

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

Unrealized (losses) gains 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* July 31, 2026and2025*, 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 because the Company can exercise significant influence over the operating and financial policies of MarketSpark but doesnot have a controlling interest.

F-31

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 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 expense, net” (see Note18).

The following table summarizes the change in the balance of the Company’s equity method investment. End of period balances are classified as other current liabilities in the consolidated balance sheets.

In* February 2025,the Company provided a revolving credit facility to MarketSpark 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.Between February 2025and July 2025,the Company advanced MarketSpark $1.9 million under the facility. In June 2026,the Company advanced MarketSpark an additional $0.1 million, fully drawing the facility. In July 2026,the Company provided MarketSpark an additional $0.2 million under a new subordinated loan agreement, due and payable in January 2027.As of July 31, 2026*, $2.2 million of principal was outstanding under the revolving credit facility and subordinated loan agreement.

Because the Company has committed and provided up to $2.2 million in funding to MarketSpark under the revolving credit facility and subordinated loan agreement, it continues to recognize its share of MarketSpark’s losses in excess of itszero carrying value, up to that funding amount.

Note9—Fair Value Measurements

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

F-32

At* July 31, 2026and2025*, the Company had $4.3 million and $3.0 million, respectively, in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method and were thereforenot measured at fair value.

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

In fiscal2026, fiscal2025, and fiscal2024, the Company paid an aggregate of $0.3 million, $0.3 million, and $2.1 million, respectively, for contingent consideration related to prior acquisitions, which included 2,679 shares in fiscal2024, of the Company’s Class B common stock with an issue date value of $0.1 million. In addition, the Company recorded gains of $1.8 million in fiscal2024, on the write-off of contingent consideration payment obligations. These write-offs of contingent consideration were included in “Other operating expense, net” in the accompanying consolidated statements of income.

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* July 31, 2026and2025*, 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.

F-33

Other assets and other liabilities. At* July 31, 2026and2025*, 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.

Note10—Property, Plant, and Equipment

Property, plant, and equipment consist of the following:

The Company reduced its gross property, plant, and equipment and accumulated depreciation and amortization by $3.5 million and $6.1 million in fiscal2026 and fiscal2025, respectively, for property, plant, and equipment that was fully depreciated andno longer in service.

Depreciation and amortization expense of property, plant, and equipment was $20.0 million, $19.5 million, and $19.1 million in fiscal2026, fiscal2025, and fiscal2024, respectively.

F-34

Note11—Goodwill

The table below reconciles the change in the carrying amount of goodwill by operating segment:

Note12—Other Intangible Assets

The table below presents information on the Company’s amortized intangible assets:

Amortization expense of intangible assets was $1.4 million, $1.5 million, and $1.3 million in fiscal2026, fiscal2025, and fiscal2024, respectively. The Company estimates that amortization expense of intangible assets with finite lives will be $1.9 million, $1.8 million, $1.5 million, $1.3 million, and $1.3 million in fiscal2027, fiscal2028, fiscal2029, fiscal2030, and fiscal2031, respectively.

F-35

Note13—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 interest in the Disbursement Payments VIE and thus the net income of the Disbursement Payments VIE was attributed to noncontrolling interests in the accompanying 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:

F-36

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 other consolidated entities.

Note14—Other Operating** Expense, N****et**

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

F-37

Straight Path Communications Inc. Class Action

As discussed in Note23, 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.

Settlement of Litigation

In fiscal2026, the Company recorded an aggregate expense of $0.1 million related to the settlement of litigation, of which $0.2 million was included in Corporate, partially offset by less than $0.1 million recorded within the NRS segment in connection with the favorable resolution of a litigation matter.

In fiscal2025, the Company recorded an aggregate expense of $4.0 million related to the settlement of litigation, of which $1.6 million was included in Corporate and $2.4 million was included in the NRS segment.

Contingent Consideration Liabilities

In fiscal2024, the Company recognized a gain on the write-off of a contingent consideration payment obligation in the Fintech segment of $1.8 million, and a gain on the write-off of a contingent consideration payment obligation in thenet2phone segment of $0.1 million.

Write-off of Equipment

In fiscal2026, the Company reduced its net book value of equipment that was taken out of service and recorded expense of $0.3 million in thenet2phone segment.

In fiscal2025, the Company reduced its net book value of equipment that was taken out of service and recorded expense of $0.9 million, of which $0.6 million was recorded within thenet2phone segment and $0.2 million within the Traditional Communications segment.

Write-off of Capitalized Internal Use Software Costs

In fiscal2024, the Company reduced its unamortized capitalized internal use software costs for internal use software that was taken out of service and recorded expense of $0.3 million.

F-38

Note15—Revolving Credit Facility

IDT Telecom, Inc. (“IDT Telecom”), a subsidiary of the Company, maintains a revolving credit facility with TD Bank, N.A. The commitment under the facility was initially $25.0 million. Effective* August 11, 2026,the facility, which was scheduled to mature on August 16, 2026,was amended to extend the maturity date to July 15, 2029.The amendment also increased the facility to provide additional seasonal borrowing capacity, raising the commitment to $50.0 million during the months of Mayand Decemberof each year (from $25.0 million during all other months). IDT Telecom mayuse the proceeds to finance working capital requirements. The facility is secured by substantially all of the Company's assets and bears interest at the term secured overnight financing rate plus10* basis points, plus a margin of 125 to 175 basis points depending on IDT Telecom’s leverage ratio as of the most recently completed fiscal quarter. Interest is payable monthly, and all outstanding principal and accrued and unpaid interest is due upon the maturity date of the facility. IDT Telecom pays a quarterly unused commitment fee of 10 basis points on the average daily unused balance of the commitment. At* July 31, 2026* and* July 31, 2025*, there wereno amounts outstanding under this facility. During fiscal2026, fiscal2025, and fiscal2024, IDT Telecom borrowed and repaid $21.4 million, $24.6 million, and $32.9 million, respectively, under this facility. IDT Telecom is required to comply with various affirmative and negative covenants and to maintain certain financial ratio targets during the term of the facility. As of* July 31, 2026* and* July 31, 2025*, IDT Telecom was in compliance with all such covenants.

In thefirst quarter of fiscal2027 through* September 29, 2026,*IDT Telecom hadno borrowings under the facility.

Note16—Accrued Expenses

Accrued expenses consist of the following:

Note17—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.

F-39

The shares of NRS’ Class B common stock sold to Alta Fox have been classified as mezzanine equity in the accompanying 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:

Note18—OtherIncome (Expense), Net

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

Note19—Income Taxes

The components of income before income taxes are as follows:

The significant components of the Company’s deferred income tax assets are as follows:

F-40

The components of the (provision for) benefit from income taxes consist of the following:

A reconciliation of the provision for income taxes to the amount computed by applying the U.S. federal statutory income tax rate of21% to income before income taxes following the adoption of ASU2023-09, is as follows:

F-41

A reconciliation of the provision for income taxes to the amount computed by applying U.S. federal statutory income tax rate of21% to income before income taxes for the years presented prior to the adoption of ASU2023-09, is as follows:

The Company's cash payments for income taxes were as follows:

The Company’s cumulative undistributed foreign earnings are included in retained earnings in the Company’s consolidated balance sheets and consisted of approximately $281 million at* July 31, 2026*. The Company has concluded that these earnings are permanently reinvested outside of the United States.

At* July 31, 2026*, the Company hadno U.S. federal net operating loss carryforwards. The Company has foreign net operating loss carryforwards of approximately $64 million, of which approximately $55 million doesnot expire, and approximately $9 million expires intwo toten years. These foreign loss carryforwards are available to offset future taxable income in the countries in which the losses were incurred.

In fiscal2024, the Company completed a study under Section382 of the Internal Revenue Code in connection with its* March 2006reacquisition ofNet2Phone,* Inc. As a result of the study, the Company recorded a tax benefit related to the adjusted amount of $23.6 million in fiscal2024. As of* July 31, 2025,*all of the acquired NOLs have been utilized.

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The change in the valuation allowance is as follows:

In fiscal2026, the Company decreased the valuation allowance by $3.3 million due to profitability in the United Kingdom as well as restructuring of foreign operations.

In fiscal2025, the Company decreased the valuation allowance by $3.4 million due to profitability in the United Kingdom, offset by $4.7 million of additions in other jurisdictions, due to losses in countries that it couldn't utilize.

In fiscal2024, the Company increased the valuation allowance by $3.0 million, which included the establishment of a valuation allowance of $3.5 million for deferred income tax assets that werenot more likely thannot going to be utilized prior to expiration, net of a decrease of $0.2 million due to the utilization or disposal of previously valued deferred income tax assets and a release of $0.3 million for profitability in the United Kingdom.

At* July 31, 2026and2025*, the Company hadno unrecognized income tax benefits. There wereno changes in unrecognized income tax benefits in fiscal2026, fiscal2025, and fiscal2024. At* July 31, 2026*, the Company didnot expect any changes in unrecognized income tax benefits during the nexttwelve months. The Company didnot record any interest and penalties related to income taxes during fiscal2026, fiscal2025, and fiscal2024. At* July 31, 2026and2025*, there wasno accrued interest included in current income taxes payable.

The Company is subject to examination by the relevant taxing authorities for the following periods: U.S. federal income tax returns for fiscal2023 through fiscal 2026, state and local income tax returns generally for fiscal2022 through fiscal 2026, and foreign income tax returns generally for fiscal2022 through fiscal 2026.

On* July 4, 2025,the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA includes several changes to the U.S. tax code, including the restoration of100%* bonus depreciation, the immediate expensing of certain domestic research and development costs, revisions to the interest expense limitation rules, and modifications to certain international tax provisions governing GILTI and FDII. The Company evaluated the effects of the OBBBA and determined that the impact on its consolidated financial statements wasnot material for the fiscal years ended* July 31, 2026* and2025.

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Note20—Equity

Class A Common Stock and Class B Common Stock

The rights of holders of Class A common stock and Class B common stock are identical except for certain voting and conversion rights and restrictions on transferability. The holders of Class A common stock and Class B common stock receive identical dividends per share when and if declared by the Company’s Board of Directors. In addition, the holders of Class A common stock and Class B common stock have identical and equal priority rights per share in liquidation. The Class A common stock and Class B common stock donot have any other contractual participation rights. The holders of Class A common stock are entitled tothree votes per share and the holders of Class B common stock are entitled toone-tenth of a vote per share. Each share of Class A common stock* maybe converted intoone* share of Class B common stock, at any time, at the option of the holder. Shares of Class A common stock are subject to certain limitations on transferability that donot apply to shares of Class B common stock.

Dividend Payments

In* March 2024,the Company’s Board of Directors initiated a quarterly cash dividend of $0.05 per share on the Company’s Class A and Class B common stock. In March 2025,the Company’s Board of Directors increased the quarterly cash dividend on the Company’s Class A and Class B common stock to $0.06 per share from $0.05 per share. In May 2026,the Company’s Board of Directors increased the quarterly cash dividend on the Company’s Class A and Class B common stock to $0.07 per share from $0.06 per share. In fiscal2026* and fiscal2025, the Company paid aggregate cash dividends per share of $0.26 and $0.22, respectively, on its Class A and Class B common stock. In fiscal2026 and fiscal2025, the Company paid aggregate cash dividends of $6.5 million and $5.6 million, respectively.

On* September 22, 2026,the Company’s Board of Directors declared a cash dividend on the Company’s Class A and Class B common stock of $0.07 per share payable on or about October 14, 2026to stockholders of record as of the close of business on October 5, 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 fiscal2026*, the Company repurchased 421,938 shares of its Class B common stock for an aggregate purchase price of $21.0 million. In fiscal2025, the Company repurchased 221,823 shares of its Class B common stock for an aggregate purchase price of $10.1 million. In fiscal2024, the Company repurchased 298,421 shares of its Class B common stock for an aggregate purchase price of $9.1 million. At* July 31, 2026*,3.8 million shares remained available for repurchase under the stock repurchase program.

Shares Withheld for Employee Taxes

In fiscal2026, fiscal2025, and fiscal2024, the Company paid$0.5 million, $7.7 million, and $1.5 million, respectively, to repurchase 10,852,157,180, and 41,994 shares, respectively, of the Company’s Class B common stock tendered by employees to satisfy tax withholding obligations arising from the vesting of deferred stock units (“DSUs”), the lapsing of restrictions on restricted stock, and the issuance of shares for bonus payments. Such shares were repurchased by the Company based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

Distributions

The Company distributed cash of $2.7 million, $0.1 million, and $0.1 million in fiscal2026, fiscal2025, and fiscal2024 respectively, to the noncontrolling interests in certain of its subsidiaries.

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Exchange of NRS Equity for Shares of the Company**’**s Class B Common Stock and Cash

In* June 2024,the Company initiated a tender offer to purchase 10% of each qualified holder’s outstanding DSUs that are to be settled in shares of NRS common stock (“NRS DSUs”) in exchange for cash or shares (depending on the number of NRS DSUs held by each holder) of the Company’s Class B common stock. In July 2024,certain qualified holders tendered and sold an aggregate of 199,687 NRS DSUs to the Company, and, as a condition of the tender offer, each NRS DSU seller granted to the Company an option, exercisable in the Company’s sole discretion for a period ofone* year, to purchase an additional aggregate 199,687 NRS DSUs at the same purchase price. In addition, in* July 2024,certain holders of NRS DSUs and shares of NRS’ Class B common stock sold an aggregate of 10,000 NRS DSUs and 142,500 shares of NRS’ Class B common stock to the Company, and, each of these sellers granted to the Company an option, exercisable in the Company’s sole discretion for a period ofone* year, to purchase an additional aggregate 10,000 NRS DSUs and 142,500 shares of NRS’ Class B common stock with the purchase price to be paid in shares of the Company’s Class B common stock with a value based on an average closing price of the Company’s Class B common stock at the time of the exercise notice. The NRS DSUs and shares in the exchange represented an aggregate of 0.2% of NRS’ outstanding capital stock on a fully diluted basis. The NRS DSUs and shares were exchanged for an aggregate of 13,042 and 12,094 shares of the Company’s Class B common stock that were issued in* July 2024and August 2024,*respectively, and cash of $0.1 million, with an aggregate value of $1.0 million based on agreed-upon valuations of the NRS DSUs and NRS Class B common stock and the market value of the Company’s Class B common stock at the time of issuance.

In* April 2025,the Company exercised its rights and purchased an aggregate of 209,317 additional NRS DSUs and 142,500 additional shares of NRS’ Class B common stock. The NRS DSUs and shares represented an aggregate of 0.2% of NRS’ outstanding capital stock on a fully diluted basis. The NRS DSUs and shares were exchanged for an aggregate of 17,584 shares of the Company’s Class B common stock that were issued in April 2025,and cash of $0.1 million, with an aggregate value of $1.0 million based on agreed-upon valuations of the NRS DSUs and NRS Class B common stock and the average price of the Company’s Class B common stock during the10* days immediately before the notice of the additional exercise.

The Company accounted for the exchange of NRS’ Class B common stock for shares of the Company’s Class B common stock as an equity transaction and recorded a decrease in “Noncontrolling interests” and an increase in “Additional paid-in capital” of $33,000 in fiscal2025 and $13,000 in fiscal2024, based on the carrying amount of the 0.1% and 0.09% noncontrolling interest in NRS in fiscal2025 and fiscal2024, respectively. The Company accounted for the exchange of NRS’ DSUs for shares of the Company’s Class B common stock and cash as compensation expense and recorded stock-based compensation expense of $0.5 million in both fiscal2025 and fiscal2024, based on the closing price of the shares of the Company’s Class B common stock on the date prior to the date that the shares were issued plus the cash paid.

In* January 2024,*three management employees of NRS exchanged shares of NRS’ Class B common stock that they held for shares of the Company’s Class B common stock with an equal value. The NRS shares in the exchange represented an aggregate of 1.25% of NRS’ outstanding shares (1.21% on a fully diluted basis), which were exchanged for an aggregate of 192,433 shares of the Company’s Class B common stock. The Company accounted for the exchange as an equity transaction and recorded a decrease in “Noncontrolling interests” and an increase in “Additional paid-in capital” of $0.1 million, based on the carrying amount of the 1.25% noncontrolling interest in NRS.

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Note21—Stock-Based Compensation

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, 2026*, the Company had 425,000 shares of Class B common stock reserved for the grant of awards under the2024 Equity Incentive Plan, and 162,920 shares were available for future grants. On* September 22, 2026,the Company's Board of Directors approved an amendment to the plan to increase the number of shares of the Company's Class B common stock available for future grant by 75,000 shares, subject to approval by the Company's stockholders at the Annual Meeting of Stockholders scheduled for December 10, 2026.*

Stock Options

Option awards are generally granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Option awards generally vest on a graded basis over three years of service and haveten-year contractual terms. No option awards were granted in fiscal2026 or fiscal2024. The fair value of stock options granted in fiscal2025 was estimated on the date of the grant using a Black-Scholes valuation model and the assumptions in the following table. Expected volatility is based on historical volatility of the Company’s Class B common stock and other factors. Expected dividends are based on the Company's dividend policy at the time of grant. The Company uses historical data on exercise of stock options, post vesting forfeitures and other factors to estimate the expected term of the stock options. The risk free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

A summary of stock option activity for the Company is as follows:

In fiscal2026, fiscal2025, and fiscal2024, the Company received cash from the exercise of stock options of $0.2 million, nil, and $0.2 million, respectively, for which the Company issued 5,204 shares, nil, and 12,500 shares, respectively, of its Class B common stock.

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The total intrinsic value of options exercised during fiscal2026, fiscal2025, and fiscal2024 was $0.1 million, nil, and $0.1 million, respectively. At* July 31, 2026*, there was $0.2 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 0.7 years.

Restricted Stock

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

At* July 31, 2026*, there was $0.3 million of total unrecognized compensation cost related to non-vested restricted shares, which is expected to be recognized over a weighted-average period of 0.7 years. The total grant date fair value of shares vested in fiscal2026, fiscal2025, and fiscal2024 was $0.3 million, $0.7 million, and $0.7 million, respectively.

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*2022 Equity Growth Program *

On* November 30, 2022,the Company adopted the IDT2022* Equity Growth Program in the form of grants of DSUs that, upon vesting, entitled the grantees to receive shares of the Company’s Class B common stock. The number of shares issuable on each vesting date varied between 50% to 200% of the number of DSUs vesting on that date, depending on the market price for the underlying Class B common stock on the vesting date relative to the base price of $25.45 per share approved by the Compensation Committee of the Company’s Board of Directors, based on the market price of the Class B common stock at the time of the grants. In fiscal2025 and fiscal2024, in accordance with the program and based on elections made by grantees, the Company issued 276,960 and 55,039 shares, respectively, of its Class B common stock for vested DSUs. No shares were issued under this program in fiscal2026. The Company estimated that the fair value of the DSUs on the date of grants was $5.4 million which was recognized on a graded vesting basis over the requisite service periods. The Company used a risk-neutral Monte Carlo simulation method to value the DSUs, simulating the range of possible future values of the Company’s Class B common stock over the life of the DSUs. With the final vesting in* February 2025,the2022* Equity Growth Program has been completed, andno DSUs remain outstanding thereunder.

2025 Equity Growth Program

On* September 18, 2025,the Company adopted the IDT2025* Equity Growth Program under its2024 Equity Incentive Plan, pursuant to which it granted 109,975 DSUs to certain executive officers, employees, and consultants. Upon vesting, the DSUs entitle grantees to receive shares of the Company's Class B common stock. The DSUs vest inthree substantially equal installments on* February 17, 2026,** February 16, 2027,and February 15, 2028,subject to continued service. The number of shares issuable on each vesting date varies based on the market price of the Class B common stock on the vesting date relative to the grant price of $50.90 per share, ranging from 50% to 267% of the DSUs vesting on that date, and up to 400% for certain executive officers. Grantees may*elect to defer vesting of some or all of their DSUs to the next scheduled vesting date.

In* February 2026,thefirst* vesting date under the program, the Company issued 26,681 shares of its Class B common stock in respect of DSUs that vested on* February 17, 2026,based on elections made by grantees. To satisfy statutory tax withholding obligations, the Company withheld 10,852 shares and remitted the equivalent cash to the applicable tax authorities, recording the withheld shares as treasury stock. The Company estimated the aggregate grant-date fair value of the DSUs at $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 to value the DSUs, simulating the range of possible future values of the Class B common stock over the life of the DSU.

A summary of the status of the Company’s grants of DSUs is presented below:

At* July 31, 2026*, there was $5.9 million of total unrecognized compensation cost related to non-vested DSUs, which is expected to be recognized over a weighted-average period of 0.7 years. The total grant date fair value of DSUs vested in fiscal2026, fiscal2025, and fiscal2024 was $1.6 million, $4.3 million, and $1.1 million, respectively.

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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, including 23,500 DSUs that, upon the scheduled vesting, represent the right to receive shares of the Company’s Class B common stock, and 50,000 shares of Class B common stock ofnet2phone* 2.0, as well as a contingent bonus subject to the completion of certain financial milestones as set forth in the agreement. In fiscal2024, two of these milestones were achieved, for which the Company issued to Mr. Pereira 39,155 shares of its Class B common stock in fiscal2024 with an issue date value of $1.5 million, and 39,155 shares of its Class B common stock in fiscal2025 with an issue date value of $1.8 million. In addition, in fiscal2025, the Company accrued $1.0 million in connection with the achievement of an additional milestone. In fiscal2024, the Company accrued aggregate stock-based compensation expense of $4.1 million related to these equity grants and the contingent bonus, which is included in “Selling, general and administrative expense” in the accompanying consolidated statements of income.

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.

In connection with the vesting of the restricted shares of NRS Class B common stock on* June 1, 2024,*the Company repurchased a portion of the shares representing an aggregate of 0.17% of the outstanding shares of NRS with an aggregate fair value of $0.6 million to satisfy the grantees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock. The fair value per share of the NRS Class B common stock was based on a valuation of the total equity of NRS using a market approach and income approach. The Company recorded a decrease in “Noncontrolling interests” of $21,000 and a decrease in “Additional paid-in capital” of $0.6 million, and an offsetting income tax withholding liability of $0.6 million.

F-49

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.

net2phone 2.0, Inc. Restricted Common Stock

On* December 31, 2020,the Company finalized compensatory arrangements with Howard Jonas, the Company's Chairman of the Board of Directors and Shmuel Jonas, the Company’s Chief Executive Officer, pursuant to which each received 500,000 restricted shares ofnet2phone* 2.0’s Class B common stock, representing an aggregate of 10% ofnet2phone 2.0’s issued and outstanding common stock at the time of the grant. The shares entitle each grantee to proceeds only on a sale, spin-off, initial public offering, or other monetization ofnet2phone 2.0, and include anti-dilution protection with respect to thefirst $15 million invested innet2phone 2.0 following the grant. In* January 2024,the restrictions on these shares lapsed. Concurrently, Bill Pereira was granted 50,000 shares ofnet2phone* 2.0 Class B common stock pursuant to his employment agreement described above. In connection with the lapsing of restrictions and the share grant, the Company repurchased an aggregate of 4.5% ofnet2phone 2.0's outstanding shares, with an aggregate fair value of $3.6 million to satisfy the grantees' tax withholding obligations. The fair value per share was determined based on a valuation ofnet2phone 2.0 using both a market approach and an income approach. As a result, in* January 2024,*the Company recorded an increase in "Noncontrolling interests" of $53,000, a decrease in "Additional paid-in capital" of $3.6 million, and a corresponding income tax withholding liability of $3.6 million.

Note22—Accumulated Other Comprehensive****Loss

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

F-50

Note23—Commitments and Contingencies

On* July 5, 2017,plaintiffJDS1,* LLC, on behalf of itself and all other similarly situated stockholders of Straight Path, and derivatively on behalf of Straight Path as nominal defendant, filed a putative class action and derivative complaint in the Court of Chancery of the State of Delaware (the “Court of Chancery”) against the Company, The Patrick Henry Trust (a trust formed by Howard S. Jonas that held record and beneficial ownership of certain shares of Straight Path he formerly held), Howard S. Jonas, and each of Straight Path’s directors. The complaint alleged that the Company aided and abetted Straight Path Chairman of the Board and Chief Executive Officer Davidi Jonas, and Howard S. Jonas in his capacity as controlling stockholder of Straight Path, in breaching their fiduciary duties to Straight Path in connection with the settlement of claims between Straight Path and the Company related to potential indemnification claims concerning Straight Path’s obligations under the Consent Decree it entered into with the Federal Communications Commission (“FCC”), as well as the sale of Straight Path’s subsidiary Straight Path IP Group, Inc. to the Company in connection with that settlement. The Plaintiffs sought, among other things, (i) a declaration that the action* maybe maintained as a class action or in the alternative, that demand on the Straight Path Board is excused; (ii) that the term sheet is invalid; (iii) awarding damages for the unfair price stockholders received in the merger between Straight Path and Verizon Communications Inc. for their shares of Straight Path’s Class B common stock; and (iv) ordering Howard S. Jonas, Davidi Jonas, and the Company to disgorge any profits for the benefit of the class Plaintiffs. The trial was held in Augustand December 2022.On October 3, 2023,the Court of Chancery issued a Memorandum Decision (the “Post-Trial Decision”) dismissing all claims against the Company, and finding that, contrary to the plaintiffs’ allegations, the class sufferedno* damages. The Court of Chancery denied plaintiff’s request for attorney’s fees (the “Attorney’s Fee Decision”). On* December 16, 2024,the Court of Chancery issued a Final Order and Judgment, embodying the Post-Trial Decision and Attorney’s Fee Decision. On January 14, 2025,the plaintiff filed a notice of appeal of the Final Order and Judgment to the Supreme Court of the State of Delaware. On April 22, 2025,the Company filed its answering brief to the appeal. 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* July 31, 2026*, the Company had purchase commitments of $10.4 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* July 31, 2026and2025*, the Company had aggregate performance bonds outstanding of $25.6 million and $33.8 million, respectively.

Note24—Related Party Transactions

Rafael Holdings, Inc.

In connection with the spin-off of Rafael Holdings, Inc. (“Rafael”) in* March 2018,the Company and Rafael entered into a transition services agreement, which provides for certain services to be provided by the Company and Rafael. This constitutes a related person transaction because Howard Jonas is the chairman of the Company's Board of Directors and executive chairman of Rafael. The Company charged Rafael $0.3 million, $0.3 million, and $0.3 million in each of fiscal2026*, fiscal2025, and fiscal2024, respectively, for services provided, net of the amounts charged by Rafael to the Company. At both* July 31, 2026and2025*, other current assets reported in the Company’s consolidated balance sheets included net receivables from Rafael ofnil.

Genie Energy Ltd.

In connection with the spin-off of Genie Energy Ltd. ("Genie") in* October 2011,the Company and Genie entered into a transition services agreement, which provides for certain services to be performed by the Company and Genie. This constitutes a related person transaction because Howard Jonas is a chairman of Genie. The Company charged Genie $0.1 million, $0.9 million, and $0.9 million in fiscal2026*, fiscal2025, and fiscal2024, respectively, for services provided and other items, net of the amounts charged by Genie to the Company. At both* July 31, 2026and2025*, other current assets reported in the Company’s consolidated balance sheets included receivables from Genie of $0.2 million.

Zedge, Inc.

In connection with the spin-off of Zedge, Inc. ("Zedge") in* June 2016,the Company and Zedge entered into a transition services agreement, which provides for certain services to be performed by the Company and Zedge. This constitutes a related person transaction because Howard Jonas is a director and vice chairman of Zedge and his son, Michael Jonas, is the chairman of the board of directors, executive chairman, and the controlling stockholder of Zedge. Pursuant to the agreement, the Company provides legal services to Zedge. Zedge paid the Company a total of $131,000 and $126,000 for legal services provided by the Company during fiscal2026* and fiscal2025, respectively. In addition, the Company paid Zedge $89,000 and $86,000 for consulting services provided to the Company by a Zedge employee in fiscal2026 and fiscal2025, respectively. As of* July 31, 2026and2025*, Zedge owed the Company $9,000 and $1,000, respectively.

In fiscal2024, NRS and Zedge entered into a marketing relationship. During fiscal2026 and fiscal2025, Zedge received $24,000 and $0.2 million from this agreement. In fiscal2024, there wereno monetary transactions between the parties.

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CTM Media Group

In fiscal2024, NRS and CTM Media Group (“CTM”) entered into a marketing relationship. This constitutes a related person transaction because Howard Jonas is the owner of CTM. NRS billed CTM a total ofnil and $0.5 million pursuant to the marketing relationship during fiscal2026 and fiscal2025, respectively. As of* July 31, 2026and2025*, CTM owed NRS $0.6 million and $0.5 million, respectively, for such services. In fiscal2024, there wereno monetary transactions between the parties.

Other Related Party Transactions

The Company provides office space, certain connectivity and other services to Jonas Media Group, a publishing firm owned by Howard Jonas. Billings for such services werenil, $1,180, and $1,300 in fiscal2026, fiscal2025, and fiscal2024, respectively. The balance owed to the Company by Jonas Media Group was $6,461 and $6,461 as of* July 31, 2026and2025*, respectively.

Mason and Company Consulting, LLC (“Mason and Co.”), a company owned solely by Jonathan Mason, receives annual commissions and fees for the insurance brokerage referral and placement of certain of the Company’s insurance policies. Jonathan Mason is the husband of Joyce Mason, the Company’s General Counsel, and brother-in-law of Howard Jonas. Based on information the Company received from Jonathan Mason, the Company believes that Mason and Co. received commissions and fees from payments made by the Company in the aggregate amount of $54,000 in fiscal2026, $54,000 in fiscal2025, and $57,000 in fiscal2024. Neither Howard Jonas nor Joyce Mason has any ownership or other interest in Mason and Co., or the commissions paid to Mason and Co., other than via the familial relationships with Jonathan Mason. On* April 28, 2025,*the Company exercised its option pursuant to an Exchange and Option Agreement with Alexander Mason, son of Joyce Mason, pursuant to which the Company exchanged 127,500 shares of NRS, a subsidiary of the Company, for 7,685 shares of Class B Common Stock of IDT Corporation (valued at $395,250).

IDT DT leases space in a building in the Bronx, New York that is owned by a limited liability company that is jointly owned by Howard Jonas and Shmuel Jonas. The annual rent is $18,600.

The Company had loans receivable from employees aggregating $0.5 million and $0.4 million at* July 31, 2026and2025*, respectively, which are included in “Other current assets” in the accompanying consolidated balance sheets.

Note25—Defined Contribution Plans

The Company maintains a401(k) Plan available to all U.S.-based 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. In fiscal2026, fiscal2025, and fiscal2024, the Company’s expense related to the plan was $1.0 million, $1.0 million, and $1.0 million, respectively.