IDT Corporation (IDT) presented Q3 FY2026 performance that exceeded market expectations. The FinTech segment emerged as the primary growth driver, offsetting slower expansion in the National Retail Solutions (NRS) network and enabling the company to raise its full-year adjusted EBITDA forecast. Despite lowering the target price from $80 to $75, Freedom analysts have maintained a Buy recommendation, highlighting significant long-term potential.
IDT’s consolidated revenue increased 5% YoY to $315.7 million, surpassing analyst forecasts. Adjusted earnings per share (EPS) reached $0.94, also above market expectations. Following the statements release, the company’s shares rose more than 5% at the market open.
The FinTech segment delivered the strongest performance. Revenue grew 17% YoY to $45 million, with profitability improving notably due to the shift in customer behavior toward digital money transfer channels. The number of BOSS Money digital transactions increased by 20%, while the volume of digital remittances surged 40% YoY.
A further positive factor was the upward revision of the adjusted EBITDA forecast for FY2026 - from $148 million to $151 million. Management expects high-margin businesses to continue increasing their contribution to overall financial performance. Currently, these segments generate more than half of the company’s total EBITDA while accounting for only about one-third of consolidated revenue.
The main weakness in the quarter came from the National Retail Solutions (NRS) division. Terminal deployment growth fell short of expectations due to intensified competition and higher-than-anticipated customer churn following the holiday season. This more conservative outlook for NRS was one of the key reasons behind the downward adjustment to the stock’s target price.
Freedom analysts note that IDT’s financial position remains exceptionally strong, with $251 million in cash and cash equivalents and zero debt on the balance sheet. Additionally, the company continues to return capital to shareholders through share buybacks and regular dividend payments.
According to analysts, long-term growth drivers include the ongoing digitalization of remittance services, the development of AI-powered solutions within the net2phone communications platform, and the continued expansion of high-margin FinTech operations within IDT’s overall business mix.
Not an individual investment recommendation.