A spin-off, the process of turning a business unit into its own publicly traded company, is on hold at IDT Corporation (NYSE: IDT). The company told investors during a recent presentation that it wants net2phone to reach greater scale and is waiting for more favorable capital-market conditions before revisiting any separation. That decision comes as three of IDT's higher-margin divisions are growing fast enough to reshape where the company makes most of its profit.
What the growth numbers actually say
IDT operates six primary businesses. Management is directing attention to three: National Retail Solutions, BOSS Money, and net2phone. Together those three account for about one-third of IDT's total revenue but two-thirds of its gross profit. In the third quarter of fiscal 2026, ended April 30, their collective revenue rose 17% year over year. IDT's consolidated revenue grew 5% over the same period. Their combined share of total revenue climbed to 34% from 30% a year earlier.
Adjusted EBITDA, which strips out interest, taxes, depreciation, and amortization to give a picture of operating profitability, rose 13% at the consolidated level to $37.5 million in the quarter. The margin reached a record 11.9%, up 90 basis points from a year ago.
National Retail Solutions provides point-of-sale terminals to independent retailers including bodegas, convenience stores, liquor stores, and tobacco shops. The business ran about 40,000 terminals across 34,000 locations at quarter-end. Trailing 12-month recurring revenue reached $141 million, up from $45 million in 2022. Bill Ulrey, IDT's vice president of investor relations and external affairs, said NRS estimates its U.S. addressable market at roughly 200,000 locations, putting current penetration near 20%.
BOSS Money, IDT's international remittance service, processes transfers primarily for first- and second-generation immigrants in the U.S. and Canada. Nearly 90% of transfers now originate through its apps. Digital-channel revenue grew 27% year over year in the quarter, with send volume up 40%. Ulrey said part of that acceleration followed a federal tax on cash remittance transactions that took effect January 1, pushing more customers toward digital channels.
net2phone sells unified communications software to small and mid-market businesses, with nearly half its seats in Latin America. Subscription revenue grew at a 17% compound annual growth rate over the past four years, reaching $93.5 million over the trailing 12 months. Its adjusted EBITDA margin hit a record 17% in the quarter.
The spin-off question
IDT first postponed a net2phone spin-off in 2022 when technology valuations fell. CFO Marcelo Fischer, addressing the question during the presentation, said net2phone has since grown past $100 million in revenue and is generating roughly $16 million in EBITDA. Still, Fischer said management wants the business to become larger before pursuing a separation, and is watching for better capital-market conditions. He also said the business benefits from IDT's capital and management support inside the existing structure.
IDT ended the quarter with $251 million in cash and no debt. The company expects to report fourth-quarter and full-year fiscal 2026 results in the last week of September.