IDT CORP

Previous wording

As of January 31, 2025, we owned 94.0% of the outstanding shares of our subsidiary, net2phone 2.0, Inc., or net2phone 2.0, which owns and operates the net2phone segment, and 81.5% of the outstanding shares of National Retail Solutions, or NRS. On a fully diluted basis assuming all the vesting criteria related to various rights granted have been met, we would own 90.2% of the equity of net2phone 2.0 and 79.3% of the equity of NRS.

Current wording

As of April 30, 2025, we owned 94.0% of the outstanding shares of our subsidiary, net2phone 2.0, Inc., or net2phone 2.0, which owns and operates the net2phone segment, and 81.6% of the outstanding shares of National Retail Solutions, or NRS. On a fully diluted basis assuming all the vesting criteria related to various rights granted have been met, we would own 90.2% of the equity of net2phone 2.0 and 79.5% of the equity of NRS.

Previous wording

Three and Six Months Ended January 31, 2025 Compared to Three and Six Months Ended January 31, 2024

Current wording

Three and Nine Months Ended April 30, 2025 Compared to Three and Nine Months Ended April 30, 2024

Previous wording

NRS, which represented 10.9% and 8.5% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 10.3% and 8.2% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, is an operator of a nationwide POS network providing independent retailers with 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.

Current wording

NRS, which represented 10.3% and 8.6% of our total revenues in the three months ended April 30, 2025 and 2024, respectively, and 10.3% and 8.4% of our total revenues in the nine months ended April 30, 2025 and 2024, respectively, is an operator of a nationwide POS network providing independent retailers with 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.

Previous wording

*Revenues.*Revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 driven primarily by revenue growth from NRS’ merchant services, as well as the expansion of NRS’ POS network.

Current wording

*Revenues.*Revenues increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 driven primarily by revenue growth from NRS’ merchant services, as well as the expansion of NRS’ POS network.

Previous wording

Direct Cost of Revenues. Direct cost of revenues decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to the decreases in the direct costs of NRS’ POS terminal sales.

Current wording

Direct Cost of Revenues. Direct cost of revenues decreased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to the decreases in the direct costs of NRS’ POS terminal sales.

Previous wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily due to increases in sales commissions, employee compensation, and bad debt expense. Selling, general and administrative expense increased in the six months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily due to increases in sales commissions, employee compensation, legal fees, marketing expense, and bad debt expense. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense decreased to 57.6% from 60.4% in the three months ended January 31, 2025 and 2024, respectively, and increased to 60.0% from 58.6% in the six months ended January 31, 2025 and 2024, respectively.

Current wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in sales commissions, bad debt expense, employee compensation, and stock-based compensation. The increase in bad debt expense was related to a large programmatic advertising partner. As a percentage of NRS’ revenue, NRS’ selling, general and administrative expense increased to 64.2% from 60.9% in the three months ended April 30, 2025 and 2024, respectively, and increased to 61.4% from 59.4% in the nine months ended April 30, 2025 and 2024, respectively.

Previous wording

Technology and Development. Technology and development expense increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in employee compensation and depreciation and amortization expense, partially offset by a decrease in consulting expense.

Current wording

Technology and Development. Technology and development expense increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in employee compensation and depreciation and amortization expense, partially offset by a decrease in consulting expense.

Previous wording

Fintech, which represented 12.1% and 9.4% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 12.1% and 9.1% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; and (ii) other, significantly smaller, financial services businesses, including a variable interest entity, or VIE, that processes disbursement payments, and IDT Financial Services Limited, or IDT Financial Services, our Gibraltar-based bank.

Current wording

Fintech, which represented 12.8% and 10.5% of our total revenues in the three months ended April 30, 2025 and 2024, respectively, and 12.3% and 9.6% of our total revenues in the nine months ended April 30, 2025 and 2024, respectively, is comprised of: (i) BOSS Money, a provider of international money remittance and related value/payment transfer services; and (ii) other, significantly smaller, financial services businesses, including a variable interest entity, or VIE, that processes disbursement payments, or the Disbursement Payments VIE, and IDT Financial Services Limited, or IDT Financial Services, a Gibraltar-based bank.

Previous wording

*Revenues.*Revenues from BOSS Money increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily because of increased transaction volume at BOSS Money, which included increases in both its digital and retail channels. BOSS Money continues to expand to new destinations and to build out its extensive payout network in destination markets.

Current wording

*Revenues.*Revenues from BOSS Money increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily because of increased transactions at BOSS Money, which included increases in both its digital and retail channel transactions.

Previous wording

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to an increase in BOSS Money’s direct cost of revenues, which was due to the increase in BOSS Money’s revenue.

Current wording

Direct Cost of Revenues. Direct cost of revenues increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to an increase in BOSS Money’s direct cost of revenues, which reflected the increase in BOSS Money’s revenue.

Previous wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in debit and credit card processing charges, employee compensation, and bank fees. The increase in card processing charges was the result of increased credit and debit card transactions through our BOSS Money app and other digital channels. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense decreased to 44.2% from 51.2% in the three months ended January 31, 2025 and 2024, respectively, and to 43.8% from 52.2% in the six months ended January 31, 2025 and 2024, respectively.

Current wording

Selling, General and Administrative. Selling, general and administrative expense increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in debit and credit card processing charges, employee compensation, and bank fees. The increase in card processing charges was the result of increased credit and debit card transactions through our BOSS Money app and other digital channels. As a percentage of Fintech’s revenue, Fintech’s selling, general and administrative expense decreased to 41.5% from 48.4% in the three months ended April 30, 2025 and 2024, respectively, and to 43.0% from 50.8% in the nine months ended April 30, 2025 and 2024, respectively.

Previous wording

The net2phone segment, which represented 7.1% and 6.9% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 7.0% and 6.8% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, is comprised of net2phone’s integrated cloud communications and contact center services.

Current wording

The net2phone segment, which represented 7.3% and 6.9% of our total revenues in the three months ended April 30, 2025 and 2024, respectively, and 7.1% and 6.8% of our total revenues in the nine months ended April 30, 2025 and 2024, respectively, is comprised of net2phone’s integrated cloud communications and contact center services.

Previous wording

*Revenues.*net2phone’s revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 driven primarily by the growth in subscription revenue, most significantly in the U.S. and Latin America markets, which reflected the increase in seats served at January 31, 2025 compared to January 31, 2024.

Current wording

*Revenues.*net2phone’s revenues increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 driven primarily by the growth in subscription revenue, most significantly in the U.S., and from its contact center services, which reflected the increase in seats served at April 30, 2025 compared to April 30, 2024.

Previous wording

Direct Cost of Revenues. Direct cost of revenues increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to the increase in revenues, with the largest increase in the U.S. market. net2phone’s revenue growth exceeded the increase in direct cost of revenues.

Current wording

Direct Cost of Revenues. Direct cost of revenues increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to the increase in revenues, with the largest increase in the U.S. market. net2phone’s revenue growth exceeded the increase in direct cost of revenues.

Previous wording

Selling, General and Administrative. Selling, general and administrative expense decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in marketing expense and consulting expense, partially offset by increases in sales commissions. As a percentage of net2phone’s revenues, net2phone’s selling, general and administrative expense decreased to 60.3% from 64.6% in the three months ended January 31, 2025 and 2024, respectively, and to 60.5% from 65.6% in the six months ended January 31, 2025 and 2024, respectively.

Current wording

Selling, General and Administrative. Selling, general and administrative expense slightly decreased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in marketing expense and bad debt expense, partially offset by increases in sales commissions. As a percentage of net2phone’s revenues, net2phone’s selling, general and administrative expense decreased to 59.1% from 63.1% in the three months ended April 30, 2025 and 2024, respectively, and to 60.1% from 64.7% in the nine months ended April 30, 2025 and 2024, respectively.

Previous wording

Technology and Development. Technology and development expense increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in employee compensation and cloud services expenses.

Current wording

Technology and Development. Technology and development expense increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in employee compensation and cloud services expenses.

Previous wording

Other operating (expense) gain, net. In the three and six months ended January 31, 2025, net2phone recorded an expense of $0.2 million for equipment that was taken out of service. In the three and six months ended January 31, 2024, net2phone recognized a gain of $0.1 million on the write-off of a contingent consideration payment obligation.

Current wording

Other Operating (Expense) Gain, net. In the three and nine months ended April 30, 2025, net2phone recorded expense of $0.2 million and $0.4 million, respectively, for equipment that was taken out of service. In the nine months ended April 30, 2024, net2phone recognized a gain of $0.1 million on the write-off of a contingent consideration payment obligation.

Previous wording

The Traditional Communications segment, which represented 69.9% and 75.2% of our total revenues in the three months ended January 31, 2025 and 2024, respectively, and 70.6% and 75.9% of our total revenues in the six months ended January 31, 2025 and 2024, respectively, includes: (i) IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts; (ii) BOSS Revolution, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada; and (iii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Current wording

The Traditional Communications segment, which represented 69.6% and 74.0% of our total revenues in the three months ended April 30, 2025 and 2024, respectively, and 70.3% and 75.2% of our total revenues in the nine months ended April 30, 2025 and 2024, respectively, includes: (i) IDT Digital Payments, which enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile accounts; (ii) BOSS Revolution, an international long-distance calling service marketed primarily to immigrant communities in the United States and Canada; and (iii) IDT Global, a wholesale provider of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide. Traditional Communications also includes other small businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Previous wording

*Revenues.*Revenues from IDT Digital Payments increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in revenues from the direct-to-consumer and enterprise and wholesale channels, partially offset by a decrease in revenues from the retail channel.

Current wording

*Revenues.*Revenues from IDT Digital Payments increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to increases in revenues from the direct-to-consumer and enterprise and wholesale channels, partially offset by a decrease in revenues from the retail channel.

Previous wording

Revenues and minutes of use from BOSS Revolution decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024. BOSS Revolution continues to be impacted by persistent, market-wide trends, including the proliferation of unlimited calling plans offered by wireless carriers and mobile virtual network operators, and the increasing penetration of free and paid over-the-top voice, video conferencing, and messaging services.

Current wording

Revenues and minutes of use from BOSS Revolution decreased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024. BOSS Revolution continues to be impacted by persistent, market-wide trends, including the proliferation of unlimited calling plans offered by wireless carriers and mobile virtual network operators, and the increasing penetration of free and paid over-the-top voice, video conferencing, and messaging services.

Previous wording

Revenues from IDT Global increased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024, although IDT Global’s minutes of use decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024. IDT Global mitigated the impacts of the ongoing industry-wide declines in paid-minute voice through new service offerings and a traffic mix shift to higher margin routes. However, we expect IDT Global to continue to be adversely impacted by these trends, and minutes of use and revenues will likely continue to decline from quarter-to-quarter, as we seek to maximize economics rather than necessarily sustain minutes of use or revenues.

Current wording

Revenues from IDT Global were substantially unchanged in the three months ended April 30, 2025 compared to the similar period in fiscal 2024, and revenues slightly increased in the nine months ended April 30, 2025 compared to the similar period in fiscal 2024. IDT Global’s minutes of use slightly increased in the three months ended April 30, 2025 compared to the similar period in fiscal 2024, and minutes of use decreased in the nine months ended April 30, 2025 compared to the similar period in fiscal 2024. IDT Global mitigated the impacts of the ongoing industry-wide declines in paid-minute voice through a traffic mix shift to higher margin routes and new service offerings. However, we expect IDT Global to continue to be adversely impacted by these trends, and minutes of use and revenues will likely continue to decline from quarter-to-quarter, as we seek to maximize economics rather than necessarily sustain minutes of use or revenues.

Previous wording

Direct Cost of Revenues. Direct cost of revenues decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to the decreases in BOSS Revolution’s minutes of use and direct cost of revenues.

Current wording

Direct Cost of Revenues. Direct cost of revenues decreased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to the decreases in BOSS Revolution’s minutes of use and direct cost of revenues.

Previous wording

Selling, General and Administrative. Selling, general and administrative expense decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in stock-based compensation, sales commissions, employee compensation, and debit and credit card processing charges, partially offset by increases in marketing expense and legal fees. As a percentage of Traditional Communications’ revenue, Traditional Communications’ selling, general and administrative expense decreased to 9.2% from 9.6% in the three months ended January 31, 2025 and 2024, respectively, and decreased to 9.1% from 9.3% in the six months ended January 31, 2025 and 2024, respectively.

Current wording

Selling, General and Administrative. Selling, general and administrative expense decreased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in stock-based compensation, sales commissions, and debit and credit card processing charges, partially offset by an increase in legal fees. As a percentage of Traditional Communications’ revenue, Traditional Communications’ selling, general and administrative expense decreased to 9.8% from 10.2% in the three months ended April 30, 2025 and 2024, respectively, and decreased to 9.3% from 9.6% in the nine months ended April 30, 2025 and 2024, respectively.

Previous wording

Technology and Development. Technology and development expense decreased in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in employee compensation, software license and maintenance expense, and depreciation and amortization expense.

Current wording

Technology and Development. Technology and development expense decreased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily due to decreases in employee compensation, cloud services expense, and depreciation and amortization expense.

Previous wording

Severance Expense. In the three months ended January 31, 2025 and 2024, Traditional Communications incurred severance expense of $0.2 million and $0.4 million, respectively, and in the six months ended January 31, 2025 and 2024, Traditional Communications incurred severance expense of $0.5 million and $0.9 million, respectively.

Current wording

Severance Expense. In the three months ended April 30, 2025 and 2024, Traditional Communications incurred severance expense of $0.2 million and $0.4 million, respectively, and in the nine months ended April 30, 2025 and 2024, Traditional Communications incurred severance expense of $0.6 million and $1.3 million, respectively.

Previous wording

General and Administrative. Corporate general and administrative expense decreased in the three months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily because of a decrease in audit and accounting fees, partially offset by an increase in legal fees. Corporate general and administrative expense decreased in the six months ended January 31, 2025 compared to the similar period in fiscal 2024 primarily because of a decrease in employee compensation, partially offset by an increase in legal fees. As a percentage of our consolidated revenues, Corporate general and administrative expense was 1.0% and 1.1% in the three months ended January 31, 2025 and 2024, respectively, and 1.0% and 1.0% in the six months ended January 31, 2025 and 2024, respectively.

Current wording

General and Administrative. Corporate general and administrative expense increased in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 primarily because of an increase in employee compensation. As a percentage of our consolidated revenues, Corporate general and administrative expense was 0.9% and 0.8% in the three months ended April 30, 2025 and 2024, respectively, and 0.9% and 0.9% in the nine months ended April 30, 2025 and 2024, respectively.

Previous wording

Other Operating (Expense) Gain, net.* *As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path Communications Inc., or Straight Path. We incurred legal fees of $6,000 and $2.6 million in the three months ended January 31, 2025 and 2024, respectively, and $6,000 and $2.8 million in the six months ended January 31, 2025 and 2024, respectively, related to this action. Also, we recorded offsetting gains from insurance claims for this matter of nil and $2.2 million in the three months ended January 31, 2025 and 2024, respectively, and nil and $2.9 million in the six months ended January 31, 2025 and 2024, respectively. In fiscal 2024, we received the final payment from our insurance policy for these claims. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. 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 Delawareto appeal the Final Order and Judgment.

Current wording

Other Operating Expense, net. As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path Communications Inc., or Straight Path. We incurred legal fees of nil and $3.2 million in the three months ended April 30, 2025 and 2024, respectively, and $7,000 and $5.9 million in the nine months ended April 30, 2025 and 2024, respectively, related to this action. Also, we recorded offsetting gains from insurance claims for this matter of nil and nil in the three months ended April 30, 2025 and 2024, respectively, and nil and $2.9 million in the nine months ended April 30, 2025 and 2024, respectively. In fiscal 2024, we received the final payment from our insurance policy for these claims. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. 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 to appeal the Final Order and Judgment. On April 22, 2025, we filed our answering brief to the appeal. The Supreme Court of the State of Delaware has scheduled oral argument for July 2025.

Previous wording

Stock-Based Compensation Expense. Total stock-based compensation expense included in consolidated selling, general and administrative expense and technology and development expense was $0.9 million and $2.5 million in the three months ended January 31, 2025 and 2024, respectively, and $1.8 million and $3.3 million in the six months ended January 31, 2025 and 2024, respectively. The decrease in stock-based compensation expense was primarily due to a decrease in expense related to certain equity grants made in the three months ended January 31, 2024 to Bill Pereira, our President and Chief Operating Officer, and a decrease in stock-based compensation expense from the grant of deferred stock units, or DSUs, that, upon vesting, will entitle the grantees to receive shares of our Class B common stock. As of January 31, 2025, there was $0.7 million of total unrecognized compensation cost related to non-vested DSUs, which is being recognized on a graded vesting basis over the requisite service periods that end in October 2027.

Current wording

Stock-Based Compensation Expense. Total stock-based compensation expense included in consolidated selling, general and administrative expense and technology and development expense was $0.9 million and $2.1 million in the three months ended April 30, 2025 and 2024, respectively, and $2.7 million and $5.4 million in the nine months ended April 30, 2025 and 2024, respectively. The decrease in stock-based compensation expense was primarily due to a decrease in expense related to certain equity grants made in fiscal 2024 to Bill Pereira, our President and Chief Operating Officer, and a decrease in stock-based compensation expense from the grant of deferred stock units, or DSUs, that entitle the grantees to receive shares of our Class B common stock. As of April 30, 2025, there was $0.5 million of total unrecognized compensation cost related to non-vested DSUs, which is being recognized on a graded vesting basis over the requisite service periods that end in October 2027.

Previous wording

Effective as of June 30, 2022, restricted shares of NRS’ Class B common stock were granted to certain NRS employees. The restrictions on the shares lapse in three installments, the first was on June 1, 2024, and the others are June 1, 2026 and June 1, 2027. As of January 31, 2025, unrecognized compensation cost related to NRS’ non-vested Class B common stock was an aggregate of $1.6 million. The unrecognized compensation cost is expected to be recognized over the remaining vesting period that ends in fiscal 2027.

Current wording

Effective as of June 30, 2022, restricted shares of NRS’ Class B common stock were granted to certain NRS employees. The restrictions on the shares lapse in three installments, the first was on June 1, 2024, and the others are June 1, 2026 and June 1, 2027. As of April 30, 2025, unrecognized compensation cost related to NRS’ non-vested Class B common stock was an aggregate of $1.4 million. The unrecognized compensation cost is expected to be recognized over the remaining vesting period that ends in fiscal 2027.

Previous wording

As of January 31, 2025, there was an aggregate of $0.7 million in unrecognized compensation cost related to non-vested stock options and restricted stock, which is expected to be recognized over the remaining vesting periods that end in fiscal 2028.

Current wording

As of April 30, 2025, there was an aggregate of $0.6 million in unrecognized compensation cost related to non-vested stock options and restricted stock, which is expected to be recognized over the remaining vesting periods that end in fiscal 2028.

Previous wording

Provision for Income Taxes. The change in income tax expense in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 was primarily due to differences in the amount of taxable income earned in the various taxing jurisdictions.

Current wording

Provision for Income Taxes. The change in income tax expense in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 was primarily due to differences in the amount of taxable income earned in the various taxing jurisdictions.

Previous wording

Net Income Attributable to Noncontrolling Interests. The change in the net income attributable to noncontrolling interests in the three and six months ended January 31, 2025 compared to the similar periods in fiscal 2024 was primarily due to increases in net income attributable to the noncontrolling interests in net2phone 2.0, NRS, and the VIE, partially offset by a decrease in net income attributable to the noncontrolling interests in Sochitel.

Current wording

Net Income Attributable to Noncontrolling Interests. The change in the net income attributable to noncontrolling interests in the three and nine months ended April 30, 2025 compared to the similar periods in fiscal 2024 was primarily due to increases in net income attributable to the noncontrolling interests in net2phone 2.0, NRS, and Sochitel.

Previous wording

At January 31, 2025, we had cash, cash equivalents, debt securities, and current equity investments of $171.1 million and working capital (current assets in excess of current liabilities) of $183.9 million.

Current wording

At April 30, 2025, we had cash, cash equivalents, debt securities, and current equity investments of $223.8 million and working capital (current assets in excess of current liabilities) of $211.1 million.

Previous wording

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, generally trade accounts receivable and trade accounts payable. The decrease in net cash provided by operating activities to $20.3 million in the six months ended January 31, 2025 from $43.3 in the six months ended January 31, 2024 predominantly reflects the timing of our payments to cover anticipated BOSS Money disbursement prefunding.

Current wording

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, generally trade accounts receivable and trade accounts payable. The increase in net cash provided by operating activities to $96.1 million in the nine months ended April 30, 2025 from $52.7 in the nine months ended April 30, 2024 predominantly reflects the timing of disbursement prefunding payments to cover anticipated BOSS Money weekly remittance activity.

Previous wording

Gross trade accounts receivable increased to $52.4 million at January 31, 2025 from $48.6 million at July 31, 2024 primarily due to amounts billed in the six months ended January 31, 2025 that were greater than collections during the period.

Current wording

Gross trade accounts receivable increased to $51.5 million at April 30, 2025 from $48.6 million at July 31, 2024 primarily due to amounts billed in the nine months ended April 30, 2025 that were greater than collections during the period.

Previous wording

Deferred revenue arises from sales of prepaid products and varies from period to period depending on the mix and the timing of revenues. Deferred revenue decreased to $28.4 million at January 31, 2025 from $30.4 million at July 31, 2024 primarily due to decreases in BOSS Revolution’s and traditional calling cards’ deferred revenue balances.

Current wording

Deferred revenue arises from sales of prepaid products and varies from period to period depending on the mix and the timing of revenues. Deferred revenue decreased to $27.5 million at April 30, 2025 from $30.4 million at July 31, 2024 primarily due to decreases in BOSS Revolution’s and traditional calling cards’ deferred revenue balances.

Previous wording

Customer funds deposits liabilities increased to $104.7 million at January 31, 2025 from $91.9 million at July 31, 2024. Our restricted cash and cash equivalents included an aggregate of $105.4 million and $90.7 million at January 31, 2025 and July 31, 2024, respectively, held by IDT Financial Services and our VIE for these customer funds.

Current wording

Customer funds deposits liabilities increased to $121.8 million at April 30, 2025 from $91.9 million at July 31, 2024. Our restricted cash and cash equivalents included an aggregate of $123.0 million and $90.7 million at April 30, 2025 and July 31, 2024, respectively, held by IDT Financial Services and the Disbursement Payments VIE for these customer funds.

Previous wording

As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiff’s allegations, the class suffered no damages. 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 Delawareto appeal the Final Order and Judgment.

Current wording

As discussed in Note 16 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary, Straight Path. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against us, and found that, contrary to the plaintiff’s allegations, the class suffered no damages. 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 to appeal the Final Order and Judgment. On April 22, 2025, we filed our answering brief to the appeal. The Supreme Court of the State of Delaware has scheduled oral argument for July 2025.

Previous wording

Our capital expenditures were $10.1 million and $8.9 million in the six months ended January 31, 2025 and 2024, respectively. We currently anticipate that total capital expenditures in the twelve-month period ending January 31, 2026 will be $19 million to $20 million. We expect to fund our capital expenditures with our net cash provided by operating activities and cash, cash equivalents, debt securities, and current equity investments on hand.

Current wording

Our capital expenditures were $15.5 million and $13.6 million in the nine months ended April 30, 2025 and 2024, respectively. We currently anticipate that total capital expenditures in the twelve-month period ending April 30, 2026 will be $18 million to $21 million. We expect to fund our capital expenditures with our net cash provided by operating activities and cash, cash equivalents, debt securities, and current equity investments on hand.

Previous wording

In the six months ended January 31, 2025 and 2024, each of the EMI’s shareholders, including us, purchased additional shares of the EMI’s convertible preferred stock. We paid an aggregate of $0.7 million and $1.0 million in the six months ended January 31, 2025 and 2024, respectively, to purchase additional shares. In addition, in February 2025, we purchased additional shares of the EMI’s convertible preferred stock for $0.3 million, and we entered into a loan agreement with the EMI for a revolving credit facility. The aggregate principal amount available under the facility is $2.0 million. The loans will incur interest at 12% per annum payable semiannually and are due and payable in February 2027. On February 27, 2025, we loaned the EMI $0.5 million under the revolving credit facility.

Current wording

In the nine months ended April 30, 2025 and 2024, each of the EMI’s shareholders, including us, purchased additional shares of the EMI’s convertible preferred stock. We paid an aggregate of $0.9 million and $1.5 million in the nine months ended April 30, 2025 and 2024, respectively, to purchase additional shares. In addition, in February 2025, we entered into a loan agreement with the EMI for a revolving credit facility. The aggregate principal amount available under the facility is $2.0 million. The loans will incur interest at 12% per annum payable semiannually and are due and payable in February 2027. In February 2025, we loaned the EMI $0.5 million under the revolving credit facility. In May 2025, we loaned the EMI an additional $0.4 million under the revolving credit facility.