IDT Corp: Form 10-Q for the period ended Apr 30, 2025

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 (or our 2024 Form 10-K) as filed with the U.S. Securities and Exchange Commission (or SEC).

As used below, unless the context otherwise requires, the terms “the Company,” “IDT,” “we,” “us,” and “our” refer to IDT Corporation, a Delaware corporation, its predecessor, International Discount Telecommunications, Corp., a New York corporation, and their subsidiaries, collectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks, and uncertainties that could result in those differences include, but are not limited to, those discussed under Item 1A to Part I “Risk Factors” in our 2024 Form 10-K and Item 1A to Part II “Risk Factors” of this Quarterly Report. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our 2024 Form 10-K.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disclosures about an entity’s expenses including more detailed information about the types of expenses in commonly presented expense captions. At each interim and annual reporting period, entities will disclose in tabular format disaggregating information about prescribed categories underlying relevant income statement captions, as well as the total amount of selling expense and a description of the composition of its selling expense. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2027. We are evaluating the impact that this ASU will have on our consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, primarily related to the rate reconciliation and income taxes paid disclosures as well as certain other amendments to income tax disclosures. Entities will be required on an annual basis to consistently categorize and provide greater disaggregation of rate reconciliation information and further disaggregate their income taxes paid. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2025. The amendments in this ASU should be applied on a prospective basis, although retrospective application is permitted. We are evaluating the impact that this ASU will have on our consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60), Accounting for and Disclosure of Crypto Assets, that changes the accounting for crypto assets from a cost-less-impairment model to fair value, with changes recognized in net income each reporting period. The ASU also requires enhanced disclosures including, among other things, the name, cost basis, fair value, and number of units for each significant holding, and a rollforward of annual activity including additions, dispositions, gains, and losses. We will adopt the amendments in this ASU for our fiscal year beginning on August 1, 2025. The ASU requires a cumulative-effect adjustment to the opening balance of retained earnings as of adoption. We are evaluating the impact that this ASU will have on our consolidated financial statements.

Results of Operations

We evaluate the performance of our business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

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.

Explanation of Performance Metrics

Our results of operations discussion include the following performance metrics:

• for NRS, active point-of-sale, or POS, terminals, payment processing accounts, and recurring revenue,
• for net2phone, seats and subscription revenue, and
• for Traditional Communications, minutes of use.

NRS uses two key metrics to measure the size of its customer base: active POS terminals and payment processing accounts. Active POS terminals are the number of POS terminals that have completed at least one transaction in the calendar month. It excludes POS terminals that have not been fully installed by the end of the month. Payment processing accounts are accounts that can generate revenue. It excludes accounts that have been approved but not activated. NRS’ recurring revenue is NRS’ revenue in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, excluding its revenue from POS terminal sales.

net2phone’s cloud communications offerings are priced on a per-seat basis, with customers paying based on the number of users in their organization. net2phone’s subscription revenue is its revenue in accordance with U.S. GAAP excluding its equipment revenue and revenue generated by a legacy SIP trunking offering in Brazil.

The trends and comparisons between periods for the number of active POS terminals, payment processing accounts, seats served, recurring revenue, and subscription revenue are used in the analysis of NRS’ or net2phone’s revenues and direct cost of revenues and are strong indications of the top-line growth and performance of the business.

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

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

National Retail Solutions Segment

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.

(in millions)

(in thousands)

26

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.

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.

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.

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.

Fintech Segment

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.

(in millions)

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.

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.

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.

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 expense.

net2phone Segment

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.

(in millions)

nm—not meaningful

(in thousands)

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.

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.

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.

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.

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.

Traditional Communications Segment

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.

Traditional Communications’ most significant revenue streams are from IDT Digital Payments, BOSS Revolution, and IDT Global. IDT Digital Payments and BOSS Revolution are sold directly to consumers and through distributors and retailers. We receive payments for BOSS Revolution, traditional calling cards, and IDT Digital Payments prior to providing the services. We recognize the revenue when services are provided to the customer. Traditional Communications’ revenues tend to be somewhat seasonal, with the second fiscal quarter (which contains Christmas and New Year’s Day) and the fourth fiscal quarter (which contains Mother’s Day and Father’s Day) typically showing higher minute volumes.

(in millions)

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.

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.

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.

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.

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.

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.

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.

Corporate

(in millions)

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 does not generate any revenues, nor does it incur any direct cost of revenues.

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.

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.

Consolidated

The following is a discussion of our consolidated stock-based compensation expense, and our consolidated income and expense line items below income from operations.

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.

On February 25, 2025, in accordance with the program and based on certain elections made by grantees, we issued 276,960 shares of our Class B common stock for vested DSUs.

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.

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.

(in millions)

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

(in millions)

We have an investment in shares of convertible preferred stock of a communications company (the equity method investee, or EMI). As of both April 30, 2025 and 2024, our ownership was 33.4% of the EMI’s outstanding shares on an as converted basis. We account for this investment using the equity method since we can exercise significant influence over the operating and financial policies of the EMI but do not have a controlling interest. We determined that on the dates of the acquisitions of the EMI’s shares, there were differences between our investment in the EMI and our proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to our interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. “Equity in the net loss of investee” includes the amortization of equity method basis difference.

Provision for Income Taxes. The change in income tax expense in the three and 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.

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.

Liquidity and Capital Resources

As of the date of this Quarterly Report, we expect our cash flow from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on April 30, 2025 will be sufficient to meet our currently anticipated working capital and capital expenditure requirements during the twelve-month period ending April 30, 2026.

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.

Contractual Obligations and Commitments

The following table includes our anticipated material cash requirements from contractual obligations and other commitments at April 30, 2025:

(1) The above table does not include up to $10 million for the potential redemption of shares of NRS’ Class B common stock, an aggregate of $34.9 million in performance bonds, and up to $2.7 million for potential contingent consideration payments related to a business acquisition, due to the uncertainty of the amount and/or timing of any such payments.

Consolidated Financial Condition

(in millions)

Operating Activities

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.

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.

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.

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.

In September 2017, we and certain of our subsidiaries were certified by the New Jersey Economic Development Authority, or NJEDA, as having met the requirements of the Grow New Jersey Assistance Act Tax Credit Program. The program provides for credits against a corporation’s New Jersey corporate business tax liability for maintaining a minimum number of employees in New Jersey, and that tax credits may be sold subject to certain conditions. On June 5, 2023, we received a 2019 tax credit certificate for $1.8 million from the NJEDA. In August 2023, we sold the certificate for cash of $1.6 million.

On June 21, 2018, the United States Supreme Court rendered a decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could materially and adversely affect our business, financial position, and operating results. One or more jurisdictions may change their laws or policies to apply their sales, use or other similar taxes to our operations, and if such changes were made it could materially and adversely affect our business, financial position, and operating results.

As discussed in Note 16 to the 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.

Investing Activities

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.

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.

Purchases of debt securities and equity investments were $29.1 million and $27.6 million in the nine months ended April 30, 2025 and 2024, respectively. Proceeds from maturities and sales of debt securities and redemptions of equity investments were $35.0 million and $41.5 million in the nine months ended April 30, 2025 and 2024, respectively.

Financing Activities

In March 2025, our Board of Directors increased our quarterly cash dividend on our Class A and Class B common stock to $0.06 per share from $0.05 per share. In the nine months ended April 30, 2025 and 2024, we paid aggregate cash dividends of $0.16 and $0.05 per share, respectively, on our Class A and Class B common stock. In the nine months ended April 30, 2025 and 2024, we paid aggregate cash dividends of $4.0 million and $1.3 million, respectively. In May 2025, our Board of Directors declared a cash dividend on our Class A and Class B common stock of $0.06 per share payable on or about June 18, 2025 to stockholders of record on June 9, 2025.

We distributed cash of $0.1 million and $62,000 in the nine months ended April 30, 2025 and 2024, respectively, to the noncontrolling interests in certain of our subsidiaries.

Our subsidiary, IDT Telecom, Inc., or IDT Telecom, entered into a credit agreement, dated as of May 17, 2021, with TD Bank, N.A. for a revolving credit facility for up to a maximum principal amount of $25.0 million. As of July 15, 2024 and July 28, 2023, IDT Telecom and TD Bank, N.A. amended certain terms of the credit agreement. IDT Telecom may use the proceeds to finance working capital requirements and for certain closing costs of the facility. At April 30, 2025 and July 31, 2024, there were no amounts outstanding under this facility. In the nine months ended April 30, 2025 and 2024, IDT Telecom borrowed and repaid an aggregate of $24.6 million and $32.9 million, respectively, under the facility. The revolving credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum at the secured overnight financing rate published by the Federal Reserve Bank of New York plus 10 basis points, plus depending upon IDT Telecom’s leverage ratio as computed for the most recent fiscal quarter, 125 to 175 basis points. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on May 16, 2026. IDT Telecom pays a quarterly unused commitment fee of 10 basis points on the average daily balance of the unused portion of the $25.0 million commitment. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain targets based on financial ratios during the term of the revolving credit facility. As of April 30, 2025, IDT Telecom was in compliance with all of the covenants.

In January 2024, the restrictions lapsed on the 0.5 million restricted shares of net2phone 2.0 Class B common stock that were granted in December 2020 to each of Howard S. Jonas and Shmuel Jonas, our Chief Executive Officer, and Bill Pereira was granted 50,000 shares of net2phone 2.0 Class B common stock. We repurchased a portion of these shares representing an aggregate of 4.5% of the outstanding shares of net2phone 2.0 with an aggregate fair value of $3.6 million to satisfy the grantees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock or the grant of shares.

In the nine months ended April 30, 2024, we received cash from the exercise of stock options of $0.2 million for which we issued 12,500 shares of our Class B common stock. There were no stock option exercises in the nine months ended April 30, 2025.

We have an existing stock repurchase program authorized by our Board of Directors for the repurchase of shares of our Class B common stock. In January 2016, the Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the nine months ended April 30, 2025, we repurchased 221,823 shares of our Class B common stock for an aggregate purchase price of $10.1 million. In the nine months ended April 30, 2024, we repurchased 204,107 shares of our Class B common stock for an aggregate purchase price of $5.7 million. At April 30, 2025, 4.2 million shares remained available for repurchase under the stock repurchase program.

In the nine months ended April 30, 2025 and 2024, we paid $7.7 million and $1.5 million, respectively, to repurchase 157,180 and 41,994 shares, respectively, of our Class B common stock that were tendered by employees of ours to satisfy the employees’ tax withholding obligations in connection with the vesting of DSUs, the lapsing of restrictions on restricted stock, and shares issued for bonus payments. Such shares were repurchased by us based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

Other Sources and Uses of Resources

From time to time, we consider spin-offs and other potential dispositions of certain of our subsidiaries. A spin-off may include the contribution of a significant amount of cash, cash equivalents, debt securities, and/or equity securities to the subsidiary prior to the spin-off, which would reduce our capital resources. There is no assurance that a transaction will be completed.

We intend to, where appropriate, make strategic investments and acquisitions to complement, expand, and/or enter into new businesses. In considering acquisitions and investments, we search for opportunities to profitably grow our existing businesses and/or to add qualitatively to the range and diversification of businesses in our portfolio. We cannot guarantee that we will be presented with acquisition opportunities that meet our return-on-investment criteria, or that our efforts to make acquisitions that meet our criteria will be successful.

Foreign Currency Risk

Revenues from our international operations were 21% and 22% of our consolidated revenues in the three months ended April 30, 2025 and 2024, respectively, and 21% and 24% of our consolidated revenues in the nine months ended April 30, 2025 and 2024, respectively. A significant portion of our revenues is in currencies other than the U.S. Dollar. Our foreign currency exchange risk is somewhat mitigated by our ability to offset a portion of these non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign currency exchange rate changes at the end of each reporting period is generally not material.

Investment Risk

We hold a portion of our assets in debt and equity securities for strategic and speculative purposes. At April 30, 2025 and July 31, 2024, the value of our debt and equity security holdings was an aggregate of $30.8 million and $35.0 million, respectively, which represented 5% and 6% of our total assets at April 30, 2025 and July 31, 2024, respectively. Investments in debt and equity securities carry a degree of risk and depend to a great extent on correct assessments of the future course of price movements of securities and other instruments. There can be no assurance that our investment managers will be able to accurately predict these price movements. The securities markets have in recent years been characterized by great volatility and unpredictability. Accordingly, the value of our investments may go down as well as up and we may not receive the amounts originally invested upon redemption.

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of April 30, 2025.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the fiscal quarter ended April 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth below, there are no material changes from the risk factors previously disclosed in Item 1A to Part I of our 2024 Form 10-K.

Global and regional economic conditions could materially adversely affect our business, results of operations, financial condition, and growth.

We have international operations with revenues outside the United States representing a significant amount of our total revenues. As a result, our operations and performance depend significantly on global and regional economic conditions. Adverse macroeconomic conditions, including inflation, slower growth, or recession, new or increased tariffs or excise taxes and other barriers to trade, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment, and currency fluctuations could materially adversely affect demand for our products and services, our operating costs or our profitability. In addition, consumer confidence and spending could be adversely affected in response to financial market volatility, negative financial news, conditions in the real estate and mortgage markets, declines in income or asset values, changes to fuel and other energy costs, labor and healthcare costs, and other economic factors.

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

Our upstream carriers, suppliers and vendors may increase their prices thus directly impacting our direct cost of revenues, which would affect our earnings. Future changes in tariffs by regulatory agencies or application of tariff requirements to currently un-tariffed products or services could affect the price and sales of our products for a certain set of customers. Changes in our underlying direct costs of revenues may cause us to increase the rates we charge our customers, which could make us less competitive and impact our sales and retention of existing customers. Currently pending legislation in the United States that has been passed by the House of Representatives and requires approval by the Senate and the President would impose a five percent excise tax on certain remittance transfers, including those by non-U.S. citizens. The imposition of these or similar excise taxes could adversely affect our business and financial condition.

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

In January 2025, the global tariff landscape began to quickly change with the United States implementing tariffs on goods from various foreign countries, either generally or with respect to certain products, and certain of those foreign countries implementing rebalancing tariffs on goods from the United States, either generally or with respect to certain products. In certain circumstances the United States and certain foreign countries temporarily suspended tariffs they had recently implemented, either in whole or in part. Since then, the United States has continued to impose tariffs on imported goods, and affected countries have often responded by imposing tariffs on U.S. goods. In April 2025, the U.S. announced a baseline tariff of 10% on goods from all countries and instituted additional individualized reciprocal tariffs for countries with which the United States has significant trade deficits. The United States continues to implement new, reinstated or adjusted tariffs, and we expect that it will continue with this practice. Foreign countries subject to these U.S. tariffs continue to implement new, reinstated or adjusted rebalancing tariffs, and we expect that foreign countries will continue with that practice.

The U.S. tariffs and rebalancing tariffs that were recently enacted or that may be enacted have contributed to uncertainty about current global economic conditions. Sustained uncertainty could result in a global economic slowdown and long-term changes to global trade. Such changes could lead to negative sentiments towards us, potentially depressing economic activity or restricting access to suppliers or customers and thereby have a material adverse effect on our business, results of operations, and outlook.

Changes to immigrant populations could negatively impact certain of our businesses.

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

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

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

In addition, many foreign jurisdictions have enacted laws and regulations mandating certain reporting related to direct and indirect greenhouse gas emission by businesses operating in those areas. Our costs to comply with any legislation, regulations or initiatives may be significant and we could be exposed to fines and penalties and other negative impacts on our businesses if we do not comply with the laws and regulations that apply to us.