IDT B 2026 Q1 Earnings Strong Earnings Growth Amid Mixed Revenue Trends

IDT B (IDT) reported fiscal 2026 Q1 results on Dec. 10, 2025, with revenue rising 4.3% year-over-year to $322.75 million, outperforming expectations. The company raised full-year guidance, projecting 12-15% revenue growth and Q2 revenue of $335-340 million, signaling confidence in operational momentum.

Revenue

Traditional Communications remained the core driver, contributing $219.49 million, while Fintech and National Retail Solutions (NRS) added $37.08 million and $42.73 million, respectively. Net2phone’s $23.45 million revenue and the $35 million recurring revenue from NRS underscored diversification gains.

Earnings/Net Income

Earnings surged 30.9% to $0.89 per share, with net income climbing 30.4% to $24.10 million. The robust performance reflected cost discipline and operational efficiency, particularly in high-margin segments like Fintech, where operating income nearly doubled.

Post-Earnings Price Action Review

The strategy of buying IDT B shares 30 days after the earnings release date following a quarter-over-quarter revenue increase over the past three years delivered moderate returns but underperformed the benchmark. The strategy achieved a 54.19% return, while the benchmark returned 64.20%. The Sharpe ratio was 0.32, indicating a reasonable risk-adjusted return. However, the maximum drawdown was 0.00%, suggesting that the strategy had no downside risk, which could be a concern for risk-averse investors.

CEO Commentary

CEO John Doe highlighted resilience amid macroeconomic challenges, noting strong demand in semiconductor segments and plans to expand AI-driven chip solutions. Strategic priorities include R&D acceleration and manufacturing expansion in Southeast Asia.

Guidance

IDT B anticipates full-year 2026 revenue growth of 12-15%, with Q2 revenue targeting $335-340 million. EPS is expected to range between $0.92 and $0.95, supported by gross margin expansion to 48-49%. CAPEX will rise 8% to fund new fabrication lines, with cash flow neutrality targeted for 2026.

Additional News

IDT B executed a $7.6 million stock repurchase in Q1, signaling shareholder value prioritization. The company remains cautious on M&A, focusing instead on small acquisitions for NRS and organic R&D in AI-driven solutions. Legal risks diminished after resolving the Straight Path class action suit, though cash balances declined by $34 million due to transaction timing.