Executive Summary
IDT delivered a solid QQ1 2025 performance with sequential revenue growth for three consecutive quarters and notable margin expansion driven by Fintech and NRS initiatives, complemented by Net2Phone UCaaS strength. Revenue reached $309.6 million, gross margin was 34.8%, and EBITDA stood at $23.6 million, underscoring positive operating leverage despite FX headwinds in Latin America. Management signaled confidence in continued EBITDA outperformance relative to prior projections, while FX volatility in LATAM remains a key near-term drag on Net2Phone’s reported results. The company maintains a strong liquidity position with a net cash balance and a solid asset base, positioning IDT to invest in US-centric growth platforms while extending its addressable markets in payments, cloud communications, and traditional services.
Key takeaway: IDT’s diversified mix (Fintech, net2phone UCaaS, and Traditional Communications) is driving steady top-line progress and profitability improvements, supported by disciplined cost management and strategic investments in product and go-to-market initiatives. The near-term caveat remains currency movements in LATAM and seasonality in NRS deployments, which management discussed as temporary but meaningful in quarterly results.
Key Performance Indicators
QoQ: -53.15% | YoY:125.21%
QoQ: -53.10% | YoY:126.67%
Key Insights
Revenue: $309.566 million, up 2.78% YoY and 0.24% QoQ; Gross Profit: $107.627 million, up 13.98% YoY and 5.32% QoQ; Gross Margin: 34.77%; Operating Income: $23.64 million (margin 7.64%); EBITDA: $23.64 million; Net Income: $17.25 million (margin 5.57%); EPS: $0.68; Net Debt: -$241.65 million (net cash positive); Cash at end of period: $243.21 million; Free Cash Flow: -$5.11 million; Current Ratio: 1.60; Quick Ratio: 1.60; Cash Ratio: 0.90; DSO: 12.08 days; ROE: 6.62%; ROA: 3.11%; Debt/Total Capi...
Financial Highlights
Revenue: $309.566 million, up 2.78% YoY and 0.24% QoQ; Gross Profit: $107.627 million, up 13.98% YoY and 5.32% QoQ; Gross Margin: 34.77%; Operating Income: $23.64 million (margin 7.64%); EBITDA: $23.64 million; Net Income: $17.25 million (margin 5.57%); EPS: $0.68; Net Debt: -$241.65 million (net cash positive); Cash at end of period: $243.21 million; Free Cash Flow: -$5.11 million; Current Ratio: 1.60; Quick Ratio: 1.60; Cash Ratio: 0.90; DSO: 12.08 days; ROE: 6.62%; ROA: 3.11%; Debt/Total Capital: 0.57%; Equity Multiplier: 2.13; Shares (weighted avg dil): ~25.36 million.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
309.57M |
2.78% |
0.24% |
| Gross Profit |
107.63M |
13.98% |
5.32% |
| Operating Income |
23.64M |
37.72% |
17.39% |
| Net Income |
17.25M |
125.21% |
-53.15% |
| EPS |
0.68 |
126.67% |
-53.10% |
Key Financial Ratios
operatingProfitMargin
7.64%
operatingCashFlowPerShare
$0.01
freeCashFlowPerShare
$-0.2
dividendPayoutRatio
7.31%
Management Commentary
- Strategy and growth: Management highlighted momentum from Fintech (BOSS Money) and net2phone, with continued investments to expand addressable markets through new SaaS features and product enhancements. - Operations and product execution: NRS experienced seasonal churn linked to a large fireworks customer; kiosk rollouts and software-driven plans shifted some sales focus but overall progress remained on track. Net2phone added seats served >400,000, contributing to a 13% year-over-year subscription revenue increase despite FX headwinds. - Market conditions and FX: Management acknowledged that FX, particularly Brazilian Real and Mexican Peso movements, reduced reported LATAM revenue growth. They emphasized that local-currency growth remains healthy and that US-market profitability supports reallocation of investment. - Financial discipline and outlook: The company cited record gross profit and EBITDA, and CEO Shmuel Jonas stated the team is “on track to significantly beat the EBITDA projections that we previously had.” CFO Marcelo Fischer noted the FX drag on Net2Phone and the need to offset costs in Latin America, while remaining optimistic about long-term LATAM potential and US-focused profitability.
"You can't build things in America and make America stronger without immigration into this country."
— Shmuel Jonas
"The exchange rates are not helping net2phone right now. If not for this FX impact, it would have been 16%"
— Marcelo Fischer
Forward Guidance
- Near-term outlook: IDT aims to maintain momentum across its three core platforms and to exceed prior EBITDA projections as evidenced by management commentary that they are on track to beat previous projections. - FX and regional dynamics: FX headwinds in LATAM will continue to affect Net2Phone reported results; however, local-currency growth remains robust and management is pursuing cost-offsetting measures and hedges where feasible. - Growth catalysts and milestones: Continued strength in Net2Phone seats (over 400k) and a broadening NRS advertising footprint (3,000+ screens ordered; placement in high-traffic venues) support a growing revenue base. - Key monitorables for investors: (1) USD-denominated growth in the US fintech/UCaaS franchises, (2) progression of NRS monetization and new advertising formats, (3) LATAM FX sensitivity and cost structure, (4) quarterly EBITDA progression relative to prior guidance, and (5) liquidity and cash flow trajectory, including free cash flow evolution as capex remains purposeful to scale platforms.