Annual Report for Fiscal Year Ending July 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

This Annual Report 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 this Annual Report. The forward-looking statements are made as of the date of this Annual 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 Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our periodic and current reports on Forms 10-Q and 8-K.

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report.

Our Management's Discussion and Analysis of Financial Condition and Results of Operations included in this Annual Report generally discusses fiscal 2025 and fiscal 2024 items and year-to-year comparisons between fiscal 2025 and fiscal 2024. Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Annual Report can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2024.

CRITICAL ACCOUNTING ESTIMATES

Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting estimates are estimates made in accordance with U.S. GAAP that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Our critical accounting estimates include those related to goodwill impairment testing, valuation of long-lived assets, allowance for credit losses, and income taxes, sales taxes, and regulatory agency fees. See Note 1 to the Consolidated Financial Statements in Item 8 to Part II of this Annual Report for a complete discussion of our significant accounting policies.

Goodwill Impairment Testing

Under U.S. GAAP, goodwill is not amortized but is reviewed annually for impairment at a level of reporting referred to as a reporting unit. A reporting unit is an operating segment, or one level below the operating segment, depending on whether certain criteria are met.

Our annual assessment date is May 1. An interim impairment test would be required whenever events or circumstances make it more likely than not that an impairment may have occurred. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount. We would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized would not exceed the total amount of goodwill. Additionally, we consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.

We have the option to perform a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. However, we may elect to perform the quantitative goodwill impairment test even if no indications of a potential impairment exist.

The carrying amount of our goodwill by reporting unit was as follows:

(in millions) July 31		2025				2024
Retail Communications		$	11.3			$	11.2
net2phone			9.9				9.8
Fintech			3.2				3.2
IDT Digital Payments			2.1				2.1
TOTAL		$	26.5			$	26.3

For our annual goodwill impairment test as of May 1, 2025, we performed qualitative assessments for all of our reporting units that indicated that it was more likely than not that the fair values of our reporting units exceeded their respective carrying values and, therefore, did not result in an impairment.

For our annual goodwill impairment test as of May 1, 2024, we performed quantitative assessments of our Retail Communications and net2phone reporting units and qualitative assessments for our Fintech and IDT Digital Payments reporting units. Our assessments did not indicate any goodwill impairment as of May 1, 2024. For the quantitative assessments, we calculated the fair value of the reporting unit using a discounted cash flow method as a form of the income approach. The discounted cash flow method is based on the present value of projected cash flows and a terminal value. The terminal value represents the expected normalized future cash flows of the reporting unit beyond the projection period. We used a discount rate based on the weighted-average cost of capital of comparable companies by Global Industry Classification Standard code that represented our estimate of the expected return a marketplace participant would have required.

We do not believe we are currently at risk of goodwill impairment based on qualitative assessments of our reporting units for the three months ended July 31, 2025. We considered several factors in these qualitative assessments including (i) the business enterprise value of the reporting unit from the last quantitative test and the excess of the fair value over carrying value, (ii) macroeconomic conditions including changes in interest rates and discount rates, (iii) industry and market considerations including industry revenue, EBITDA margins, and multiples based on business enterprise value to revenues and to EBITDA, and (iv) the recent financial performance and budget of the reporting unit.

Calculating the fair value of a reporting unit requires significant estimates and assumptions by management. The key assumptions and judgments underlying our quantitative assessment include the discount rates and terminal growth rates used in our discounted cash flow analysis, the revenue and EBITDA projections for our reporting units, and estimates of future levels of gross and operating profits and capital expenditures. Should the estimates and assumptions regarding the fair value of the reporting units prove to be incorrect, we may be required to record impairments to goodwill in future periods.

Valuation of Long-Lived Assets

We test the recoverability of our long-lived assets whenever events or changes in circumstances indicate that the carrying value of any such asset may not be recoverable. Such events or changes in circumstances include:

§

significant actual underperformance relative to expected performance or projected future operating results;

§

significant changes in the manner or use of the asset or the strategy of our overall business;

§

significant adverse changes in the business climate in which we operate; and

§

loss of a significant contract.

There were no such events or changes in circumstances in fiscal 2025 or fiscal 2024. If we determine that events or changes in circumstances indicate the carrying value of certain long-lived assets may not be recoverable, we test for impairment based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, we will record an impairment loss based on the difference between the estimated fair value and the carrying value of the asset. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from the asset using an appropriate discount rate. Cash flow projections for specific assets and fair value estimates of assets require significant estimates and assumptions by management that have a significant level of estimation uncertainty. Should our estimates and assumptions prove to be incorrect, we may be required to record impairments in future periods and such impairments could be material.

Allowance for Credit Losses on Accounts Receivable

Our allowance for credit losses was $9.1 million and $6.4 million at July 31, 2025 and 2024, respectively, partially due to an increase in credit losses related to ads and data. The allowance as a percentage of gross trade accounts receivable increased to 17.5% at July 31, 2025 from 13.1% at July 31, 2024 because, at July 31, 2025 compared to July 31, 2024, gross trade accounts receivable increased 7.0% and the allowance increased 43.2%. The most significant increase in the trade accounts receivable balance at July 31, 2025 compared to July 31, 2024 was in NRS.

For our allowance for trade accounts receivable, we record an expense based on a forward-looking current expected credit loss model to maintain our allowance for credit losses. We consider the probability of recoverability of accounts receivable based on past experience, considering current collection trends and general economic factors, including bankruptcy rates. We also consider future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks are assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Account balances are written off against the allowance when it is determined that the receivable will not be recovered.

Our allowance for credit losses estimate is subject to change due to new developments, changes in assumptions or changes in our strategy. We continually assess the likelihood of potential amounts or ranges of recoverability and adjust our allowance accordingly; however, actual collections and write-offs of trade accounts receivables may materially differ from our estimates.

Income Taxes, Sales Taxes, and Regulatory Agency Fees

Our current and deferred income taxes and associated valuation allowance, accruals for sales taxes, and telecom regulatory agency fee accruals, are impacted by events and transactions arising in the normal course of business as well as in connection with special and non-routine items. Assessment of the appropriate amount of income taxes, sales taxes, and regulatory agency fees is dependent on several factors, including estimates of the timing and realization of deferred income tax assets, judgments about the potential results of audits and applicability of regulatory agency rules and regulations, as well as judgments and assumptions about changes in income tax, sales tax, and regulatory agency laws, rules, or regulations.

The valuation allowance on our deferred income tax assets was $14.9 million and $13.6 million at July 31, 2025 and 2024, respectively. In fiscal 2025, we decreased the valuation allowance by $3.4 million, due to profitability in the United Kingdom, offset by $4.7 million of additions in other jurisdictions. In fiscal 2024, we increased the valuation allowance by $3.0 million, which included the establishment of a valuation allowance of $3.5 million for deferred income tax assets that were not more likely than not going to be utilized prior to expiration, net of a decrease of $0.2 million due to the utilization or disposal of previously valued deferred income tax assets and a release of $0.3 million for profitability in the United Kingdom.

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.

Our 2017 FCC Form 499-A, which reported our calendar year 2016 revenue, was audited by the USAC. The USAC's final decision imposed a $2.9 million charge on us for the Federal Telecommunications Relay Service, or TRS, Fund. We have appealed the USAC's final decision to the FCC and we do not intend to remit payment for the TRS Fund fees unless and until a negative decision on our appeal has been issued. We have made certain changes to our filing policies and procedures for years that remain potentially under audit. At July 31, 2025 and 2024, our accrued expenses included $21.1 million and $25.9 million, respectively, for FCC-related regulatory fees for the year covered by the audit, as well as prior and subsequent years.

RECENTLY ISSUED ACCOUNTING STANDARD NOT YET ADOPTED

In September 2025, the FASB issued ASU 2025-06 - Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements.

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.

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 consolidated results of operations.

As of July 31, 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 NRS. On a fully diluted basis assuming all the vesting criteria related to various rights granted have been met, we would own 90.1% of the equity of net2phone 2.0 and 79.5% of the equity of NRS.

Reclassifications

From and after August 1, 2024, we reclassified certain customer funds for pending money transfers in our consolidated financial statements. In the consolidated balance sheet at July 31, 2024, $8.9 million previously included in "Settlement liabilities" was reclassified to "Customer funds deposits," and in the consolidated statements of cash flows in fiscal 2024 and fiscal 2023, cash provided by "Trade accounts payable, accrued expenses, settlement liabilities, other current liabilities, and other liabilities" of $1.6 million and $2.0 million, respectively, was reclassified to cash used in "Customer funds deposits". These amounts were reclassified to conform to the current year's presentation.

Concentration of Customers

While they may vary from quarter to quarter, our five largest customers collectively accounted for 8.9%, 10.3%, and 10.8% of our consolidated revenues in fiscal 2025, fiscal 2024, and fiscal 2023, respectively. Our customers with the five largest receivables balance collectively accounted for 20.4% and 22.7% of our consolidated gross trade accounts receivable at July 31, 2025 and 2024, respectively. This concentration of customers increases our risk associated with nonpayment by those customers. In an effort to reduce our risk, we perform ongoing credit evaluations of our significant customers, and in some cases, do not offer credit terms to customers, choosing instead to require prepayment. Historically, when we have issued credit, we have not required collateral to support trade accounts receivable from our customers. However, when necessary, we have imposed stricter credit restrictions on our customers. In some cases, this has resulted in our sharply curtailing, or ceasing completely, sales to certain customers.

Explanation of Performance Metrics

Our results of operations discussion include the following performance metrics:

	§	for NRS, active POS terminals, payment processing accounts, and recurring revenue,
	§	for net2phone, seats and subscription revenue, and
	§	for Traditional Communications, minutes of use.

NRS uses three key metrics to measure the size of its customer base, including two that are non-GAAP measures: 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. In addition to the foregoing, NRS uses recurring revenue as a performance metric, which consist of NRS' revenue in accordance with 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.

Year Ended July 31, 2025 compared to Year Ended July 31, 2024

The following table sets forth certain items in our statements of income as a percentage of our total revenues:

Year ended July 31		2025				2024				2023
REVENUES:
National Retail Solutions			10.5	%			8.6	%			6.2	%
Fintech			12.6				10.0				7.0
net2phone			7.1				6.8				5.8
Traditional Communications			69.8				74.6				81.0
TOTAL REVENUES			100.0				100.0				100.0
DIRECT COST OF REVENUES			63.8				67.6				71.2
GROSS PROFIT			36.2				32.4				28.8
OPERATING EXPENSES:
Selling, general and administrative			23.4				22.4				19.6
Technology and development			4.1				4.2				3.9
Severance			-				0.1				-
Other operating expense, net			0.5				0.3				0.4
TOTAL OPERATING EXPENSES			28.0				27.0				23.9
INCOME FROM OPERATIONS			8.2				5.4				4.9
Interest income, net			0.5				0.4				0.3
Other expense, net			(0.1	)			(0.7	)			(0.3	)
INCOME BEFORE INCOME TAXES			8.6	%			5.1	%			4.9	%

National Retail Solutions Segment

NRS, which represented 10.5%, 8.6%, and 6.2% of our total revenues in fiscal 2025, fiscal 2024, and fiscal 2023, respectively, is an operator of a nationwide POS network providing independent retailers with POS equipment, store management software, electronic payment processing, and other ancillary merchant services. NRS' POS platform also provides marketers with digital out-of-home advertising and transaction data.

(in millions)														2025 change from 2024								2024 change from 2023
Year ended July 31		2025				2024				2023				$/#				%				$/#				%
Revenues:
Recurring		$	122.6			$	96.9			$	71.4			$	25.7				26.6	%		$	25.5				35.6	%
Other			6.2				6.2				5.7				-				(1.5	)			0.5				10.5
Total revenues			128.8				103.1				77.1				25.7				24.9				26.0				33.7
Direct cost of revenues			(11.9	)			(11.6	)			(10.7	)			0.3				2.6				0.9				8.3
Gross profit			116.9				91.5				66.4				25.4				27.7				25.1				37.9
Selling, general and administrative			(78.0	)			(62.6	)			(47.0	)			15.4				24.5				15.6				33.3
Technology and development			(8.7	)			(7.1	)			(5.0	)			1.6				22.8				2.1				42.5
Other operating expense			(2.4	)			(0.2	)			-				2.2				nm				0.2				nm
Income from operations		$	27.8			$	21.6			$	14.4			$	6.2				28.3	%		$	7.2				50.2	%
Gross margin percentage			90.7	%			88.7	%			86.1	%			2.0	%							2.6	%

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(in thousands)														2025 change from 2024								2024 change from 2023
July 31		2025				2024				2023				#				%				#				%
Active POS terminals			37.2				32.1				25.7				5.1				15.8	%			6.4				25.1	%
Payment processing accounts			26.5				21.3				15.8				5.2				24.1	%			5.5				35.3	%

Revenues.Revenues increased in fiscal 2025 compared to 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 increased in fiscal 2025 compared to fiscal 2024 primarily due to the increases in the direct costs of NRS' merchant services and advertising, partially offset by a decrease in the direct costs of NRS' POS terminal sales.

Selling, General and Administrative.Selling, general and administrative expense increased in fiscal 2025 compared to fiscal 2024 primarily due to increases in sales commissions, bad debt expense, employee compensation, and marketing expense. 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 was 60.6%, 60.7%, and 61.0% in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Technology and Development.Technology and development expense increased in fiscal 2025 compared to fiscal 2024 primarily due to increases in employee compensation and depreciation and amortization expense, partially offset by a decrease in consulting expense.

Other Operating Expense.In fiscal 2025, we recorded an aggregate expense of $4.0 million related to the settlement of litigation, of which $2.4 million was included in the NRS segment and $1.6 million was included in Corporate. In fiscal 2024, NRS recorded expense of $0.2 million for the cost of capitalized internal use software and certain other assets that were no longer in use.

Fintech Segment

Fintech, which represented 12.6%, 10.0%, and 7.0% of our total revenues in fiscal 2025, fiscal 2024, and fiscal 2023, 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 ("VIE"), that processes disbursement payments, which we refer to as the Disbursement Payments VIE, (iii) IDT Financial Services Limited, or IDT Financial Services, a Gibraltar-based bank and (iv) IDT Services Limited ("IDTS"), a Malta-based electronic money institution.

(in millions)														2025 change from 2024								2024 change from 2023
Year ended July 31		2025				2024				2023				$/#				%				$/#				%
Revenues:
BOSS Money		$	139.8			$	108.3			$	76.9			$	31.5				29.1	%		$	31.4				40.8	%
Other			14.8				12.4				9.7				2.4				19.3				2.7				28.0
Total revenues			154.6				120.7				86.6				33.9				28.1				34.1				39.4
Direct cost of revenues			(63.9	)			(53.4	)			(36.6	)			10.5				19.6				16.8				45.9
Gross profit			90.7				67.3				50.0				23.4				34.8				17.3				34.6
Selling, general and administrative			(66.2	)			(59.6	)			(47.2	)			6.6				11.0				12.4				26.3
Technology and development			(9.1	)			(9.5	)			(7.2	)			(0.4	)			(4.6	)			2.3				30.6
Other operating gain, net			-				1.7				1.9				(1.7	)			(100.0	)			(0.2	)			(13.2	)
Income (loss) from operations		$	15.4			$	(0.1	)		$	(2.5	)		$	15.5				nm			$	2.4				94.9	%
Gross margin percentage			58.7	%			55.8	%			57.7	%			2.9	%							(1.9	)%

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Revenues.Revenues increased in fiscal 2025 compared to fiscal 2024 primarily because of increased transaction volume at BOSS Money, which included increases in both its digital and retail channel transactions.

Direct Cost of Revenues.Direct cost of revenues increased in fiscal 2025 compared to 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 fiscal 2025 compared to fiscal 2024 primarily due to increases in debit and credit card processing charges, employee compensation, bank fees, and marketing expenses. 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 was 42.8%, 49.4%, and 54.5% in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Technology and Development.Technology and development expense decreased in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in employee compensation expense, partially offset by increases in depreciation and amortization expense, software license and maintenance expense, and cloud services expense.

Other Operating Gain, net.In fiscal 2024, we determined that the requirements for contingent consideration payments related to the Leaf Global Fintech Corporation, or Leaf, acquisition would not be met. We recognized a gain of $1.8 million on the write-off of these contingent consideration payment obligations. In addition, in fiscal 2024, we completed a portion of the integration of the Leaf Wallet platform into the BOSS Money app, including replacing the Leaf tradename with BOSS Money. The Leaf tradename balance of $0.1 million was written off in fiscal 2024.

net2phone Segment

The net2phone segment, which represented 7.1%, 6.8%, and 5.8% of our total revenues in fiscal 2025, fiscal 2024, and fiscal 2023, respectively, is comprised of net2phone's integrated cloud communications and contact center services.

(in millions)														2025 change from 2024								2024 change from 2023
Year ended July 31		2025				2024				2023				$/#				%				$/#				%
Revenues:
Subscription		$	85.7			$	78.4			$	66.8			$	7.3				9.4	%		$	11.6				17.3	%
Other			2.2				3.9				5.6				(1.7	)			(46.0	)			(1.7	)			(28.9	)
Total revenues			87.9				82.3				72.4				5.6				6.7				9.9				13.7
Direct cost of revenues			(18.2	)			(17.2	)			(15.3	)			1.0				5.4				1.9				12.9
Gross profit			69.7				65.1				57.1				4.6				7.1				8.0				14.0
Selling, general and administrative			(52.4	)			(52.6	)			(49.7	)			(0.2	)			(0.4	)			2.9				5.8
Technology and development			(11.7	)			(10.8	)			(10.0	)			0.9				8.3				0.8				8.1
Severance			(0.1	)			(0.1	)			(0.1	)			-				5.7				-				72.1
Other operating (expense) gain, net			(0.6	)			0.1				(0.1	)			(0.7	)			nm				0.2				142.3
Income (loss) from operations		$	4.9			$	1.7			$	(2.8	)		$	3.2				194.4	%		$	4.5				161.0	%
Gross margin percentage			79.3	%			79.1	%			78.9	%			0.2	%							0.2	%

nm-not meaningful

(in thousands)														2025 change from 2024								2024 change from 2023
July 31		2025				2024				2023				#				%				#				%
Seats served			422				396				352				26				6.4	%			44				12.6	%

Revenues.net2phone's revenues increased in fiscal 2025 compared to fiscal 2024 due to the growth in subscription revenue, most significantly in the U.S. market, and from its contact center services' revenue, which reflected the increase in seats served at July 31, 2025 compared to July 31, 2024.

Direct Cost of Revenues.Direct cost of revenues increased in fiscal 2025 compared to 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 fiscal 2025 compared to fiscal 2024 primarily due to decreases in marketing, bad debt, and consulting expenses, partially offset by increases in sales commissions and depreciation and amortization expenses. As a percentage of net2phone's revenues, net2phone's selling, general and administrative expense decreased to 59.6% from 63.9% and 68.7% in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Technology and Development.Technology and development expense increased in fiscal 2025 compared to fiscal 2024 primarily due to increases in employee compensation, software license and maintenance, cloud services, and depreciation and amortization expenses.

Other Operating (Expense) Gain, net. In fiscal 2025 and fiscal 2023, we recorded expense of $0.6 million and $0.1 million, respectively, for telephone equipment used in operations that was taken out of service. In fiscal 2024, we determined that the requirement for a contingent consideration payment related to an acquisition in a prior period would not be met. We recognized a gain of $0.1 million on the write-off of this contingent consideration payment obligation.

Traditional Communications Segment

The Traditional Communications segment, which represented 69.8%, 74.6%, and 81.0% of our total revenues in fiscal 2025, fiscal 2024, and fiscal 2023, 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 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)														2025 change from 2024								2024 change from 2023
Year ended July 31		2025				2024				2023				$/#				%				$/#				%
Revenues:
IDT Digital Payments		$	416.3			$	407.4			$	417.1			$	8.9				2.2	%		$	(9.7	)			(2.3	)%
BOSS Revolution			211.2				263.2				322.1				(52.0	)			(19.8	)			(58.9	)			(18.3	)
IDT Global			209.6				201.1				230.3				8.5				4.2				(29.2	)			(12.7	)
Other			23.1				27.9				33.2				(4.8	)			(16.9	)			(5.3	)			(16.4	)
Total revenues			860.2				899.6				1,002.7				(39.4	)			(4.4	)			(103.1	)			(10.3	)
Direct cost of revenues			(691.3	)			(733.4	)			(819.0	)			(42.1	)			(5.7	)			(85.6	)			(10.5	)
Gross profit			168.9				166.2				183.7				2.7				1.6				(17.5	)			(9.5	)
Selling, general and administrative			(79.9	)			(84.9	)			(89.9	)			(5.0	)			(5.9	)			(5.0	)			(5.6	)
Technology and development			(21.5	)			(23.1	)			(25.7	)			(1.6	)			(7.0	)			(2.6	)			(10.2	)
Severance			(0.8	)			(1.6	)			(0.9	)			(0.8	)			(53.0	)			0.7				78.6
Other operating expense, net			(0.2	)			(0.2	)			(5.9	)			-				(11.6	)			(5.7	)			(96.9	)
Income from operations		$	66.5			$	56.4			$	61.3			$	10.1				17.9	%		$	(4.9	)			(7.9	)%
Gross margin percentage			19.6	%			18.5	%			18.3	%			1.1	%							0.2	%
Minutes of use:
BOSS Revolution			1,303				1,772				2,299				(469	)			(26.4	)%			(527	)			(22.9	)%
IDT Global			5,681				5,702				6,328				(21	)			(0.4	)			(626	)			(9.9	)

Revenues.Revenues from IDT Digital Payments increased in fiscal 2025 compared to 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 fiscal 2025 compared to 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 increased in fiscal 2025 compared to fiscal 2024, although IDT Global's minutes of use decreased in fiscal 2025 compared to 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 this industry-wide trend, 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 fiscal 2025 compared to 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 fiscal 2025 compared to 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 bad debt expense. As a percentage of Traditional Communications' revenue, Traditional Communications' selling, general and administrative expense was 9.3%, 9.4%, and 9.0% in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Technology and Development.Technology and development expense decreased in fiscal 2025 compared to fiscal 2024 primarily due to decreases in employee compensation, cloud services expense, and depreciation and amortization expense.

Severance Expense.Traditional Communications incurred severance expense of $0.8 million and $1.6 million in fiscal 2025 and fiscal 2024, respectively.

Other Operating Expense, net. In fiscal 2025, Traditional Communications recorded expense of $0.2 million for certain equipment that was taken out of service. In fiscal 2024, Traditional Communications recorded expenses of $0.2 million for internal use software that was taken out of service.

Corporate

(in millions)														2025 change from 2024								2024 change from 2023
Year ended July 31		2025				2024				2023				$				%				$				%
General and administrative		$	(11.1	)		$	(10.5	)		$	(9.4	)		$	0.6				6.3	%		$	1.1				12.2	%
Other operating expense, net			(3.1	)			(4.4	)			(0.3	)			(1.3	)			(28.8	)			4.1				nm
Loss from operations		$	(14.2	)		$	(14.9	)		$	(9.7	)		$	0.7				4.3	%		$	(5.2	)			(53.9	)%

nm-not meaningful

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 fiscal 2025 compared to fiscal 2024 primarily because of increases in employee compensation and legal fees. As a percentage of our consolidated revenues, Corporate general and administrative expense was 0.9%, 0.9%, and 0.8% in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Other Operating Expense, net.In fiscal 2025, we recorded an aggregate expense of $4.0 million related to the settlement of litigation, of which $1.6 million was included in Corporate and $2.4 million was included in the NRS segment.

As discussed in Note 22 to the Consolidated Financial Statements included in Item 8 to Part II of this Annual Report, we (as well as other defendants) were named in a class action on behalf of the stockholders of our former subsidiary Straight Path. We incurred legal fees of $0.5 million and $7.2 million in fiscal 2025 and fiscal 2024, respectively, related to this action. Also, we recorded offsetting gains from insurance claims for this matter of nil and $2.9 million in fiscal 2025 and fiscal 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. Oral argument is scheduled for October 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 $3.1 million and $7.4 million in fiscal 2025 and fiscal 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 an executive 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 July 31, 2025, there was $0.4 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.

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 July 31, 2025, unrecognized compensation cost related to NRS' non-vested Class B common stock was an aggregate of $1.2 million. The unrecognized compensation cost is expected to be recognized over the remaining vesting period that ends in fiscal 2027.

As of July 31, 2025, there was an aggregate of $0.5 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)														2025 change from 2024								2024 change from 2023
Year ended July 31		2025				2024				2023				$				%				$				%
Income from operations		$	100.4			$	64.7			$	60.7			$	35.7				55.1	%		$	4.0				6.6	%
Interest income, net			6.1				4.8				3.2				1.3				28.5				1.6				51.5
Other expense, net			(0.7	)			(7.6	)			(3.1	)			6.9				90.6				(4.5	)			(146.9	)
(Provision for) benefit from income taxes			(24.7	)			6.4				(16.4	)			(31.1	)			(488.7	)			22.8				138.6
Net income			81.1				68.3				44.4				12.8				18.9				23.9				53.9
Net income attributable to noncontrolling interests			(5.0	)			(3.8	)			(3.9	)			(1.2	)			(32.4	)			0.1				1.7
Net income attributable to IDT Corporation		$	76.1			$	64.5			$	40.5			$	11.6				18.1	%		$	24.0				59.2	%

Other Expense, net.Other expense, net consists of the following:

(in millions) Year ended July 31		2025				2024				2023
Foreign currency transaction gains (losses)		$	0.3			$	(3.8	)		$	3.3
Equity in net loss of investee			(2.7	)			(3.5	)			(3.1	)
Gains (losses) on investments			1.6				0.2				(2.6	)
Other			0.1				(0.5	)			(0.7	)
TOTAL		$	(0.7	)		$	(7.6	)		$	(3.1	)

We have an investment in shares of convertible preferred stock of a communications company (the equity method investee, or EMI). As of both July 31, 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) Benefit from Income Taxes.With our reacquisition of net2phone in March 2006, its losses were limited under IRC Section 382 to approximately $7 million per year. In fiscal 2024, we had an IRC Section 382 study conducted on the reacquisition and the limitation was adjusted to $9 million per year. We recorded a tax benefit related to the adjusted amount of $23.6 million in fiscal 2024. The change in income tax expense in fiscal 2025 compared to fiscal 2024, excluding the income tax benefit 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 fiscal 2025 compared to fiscal 2024 was primarily due to increases in net income attributable to the noncontrolling interests in NRS, net2phone 2.0, and the Disbursement Payments VIE, partially offset by the change in the amounts attributable to the noncontrolling interests in Sochitel.

LIQUIDITY AND CAPITAL RESOURCES

As of the date of this Annual Report, we expect our cash from operations and the balance of cash, cash equivalents, debt securities, and current equity investments that we held on July 31, 2025 will be sufficient to meet our currently anticipated working capital and capital expenditure requirements during fiscal 2026.

At July 31, 2025, we had cash, cash equivalents, debt securities, and current equity investments of $253.8 million and working capital (current assets in excess of current liabilities) of $227.3 million.

Contractual Obligations and Commitments

The following table includes our anticipated material cash requirements from contractual obligations and other commitments at July 31, 2025:

Payments due by period (in millions)		Total				Less than 1 year				1-3 years				4-5 years				After 5 years
Purchase commitments		$	14.5			$	4.2			$	8.6			$	1.7			$	-
Connectivity obligations under service agreements			1.9				1.2				0.6				0.1				-
Operating leases including short-term leases			2.6				1.3				1.0				0.3				-
TOTAL(1)		$	19.0			$	6.7			$	10.2			$	2.1			$	-

(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 $33.8 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) Year ended July 31		2025				2024				2023
Cash flows provided by (used in):
Operating activities		$	127.1			$	78.2			$	52.4
Investing activities			(20.7	)			(0.8	)			(33.4	)
Financing activities			(23.4	)			(17.2	)			(14.1	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents			3.4				(3.6	)			4.4
Increase in cash, cash equivalents, and restricted cash and cash equivalents		$	86.4			$	56.6			$	9.3

Operating Activities

Our cash flows from operations vary 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, trade accounts payable, and disbursements prefunding.

Gross trade accounts receivable increased to $52.0 million at July 31, 2025 from $48.6 million at July 31, 2024 primarily due to amounts billed in fiscal 2025 that were greater than collections during fiscal 2025, partially offset by uncollectible accounts written off.

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 $27.7 million at July 31, 2025 from $30.4 million at July 31, 2024 primarily due to a decrease in BOSS Revolution's deferred revenue balance.

Customer funds deposits liabilities increased to $114.7 million at July 31, 2025 from $91.9 million at July 31, 2024. Our restricted cash and cash equivalents included an aggregate of $115.2 million and $90.7 million at July 31, 2025 and 2024, respectively, held by IDT Financial Services and our 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 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 22 to the Consolidated Financial Statements included in Item 8 to Part II of this Annual 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 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. Oral argument is scheduled for October 2025.

Investing Activities

Our capital expenditures were $20.8 million in fiscal 2025 and $18.9 million in fiscal 2024. We currently anticipate that total capital expenditures in fiscal 2026 will be $19 million to $21 million. We expect to fund our capital expenditures with net cash provided by operating activities and cash, cash equivalents, debt securities, and current equity investments on hand.

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 fiscal 2025, we loaned the EMI an aggregate of $1.9 million under the revolving credit facility.

In fiscal 2025 and fiscal 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 $2.0 million in fiscal 2025 and fiscal 2024, respectively, to purchase additional shares.

Purchases of debt securities and equity investments were $33.5 million and $29.9 million in fiscal 2025 and fiscal 2024, respectively. Proceeds from maturities and sales of debt securities and redemptions of equity investments were $36.3 million and $50.1 million in fiscal 2025 and fiscal 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 fiscal 2025 and fiscal 2024, we paid aggregate cash dividends per share of $0.22 and $0.10, respectively, on our Class A and Class B common stock. In fiscal 2025 and fiscal 2024, we paid aggregate cash dividends of $5.6 million and $2.5 million, respectively, on our Class A and Class B common stock. In September 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 October 10, 2025 to stockholders of record as of the close of business on September 30, 2025.

We distributed cash of $0.1 million and $0.1 million in fiscal 2025 and fiscal 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 July 31, 2025 and 2024, there were no amounts outstanding under this facility. In fiscal 2025 and fiscal 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 July 31, 2025, IDT Telecom was in compliance with all the covenants.

In the first quarter of fiscal 2026 through September 29, 2025, IDT Telecom borrowed and repaid an aggregate of $12.7 million under the facility.

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 addition, in connection with the vesting of restricted shares of NRS Class B common stock on June 1, 2024, we repurchased a portion of the shares representing an aggregate of 0.17% of the outstanding shares of NRS with an aggregate fair value of $0.6 million to satisfy the grantees' tax withholding obligations in connection with the lapsing of restrictions on restricted stock.

In fiscal 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 fiscal 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 fiscal 2025, we repurchased 221,823 shares of our Class B common stock for an aggregate purchase price of $10.1 million, and in fiscal 2024, we repurchased 298,421 shares of Class B common stock for an aggregate purchase price of $9.1 million. At July 31, 2025, 4.2 million shares remained available for repurchase under the stock repurchase program.

In fiscal 2025 and fiscal 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.

In April 2025, we exchanged an aggregate of 8,589 shares of our Class B common stock with a value of $0.4 million for shares of NRS' Class B common stock that were held by employees of NRS representing an aggregate of 0.09% of NRS' outstanding shares. In June 2024, we exchanged an aggregate of 12,267 shares of our Class B common stock with a value of $0.4 million for shares of NRS' Class B common stock that were held by employees of NRS representing an aggregate of 0.09% of NRS' outstanding shares. In January 2024, we exchanged an aggregate of 192,433 shares of our Class B common stock with a value of $6.3 million for shares of NRS' Class B common stock that were held by management employees of NRS representing an aggregate of 1.25% of NRS' outstanding shares.

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.