NYSE: IDT

■
net2phone:
Provides businesses with AI-powered communications solutions that analyse, inform, and manage communications for enhanced productivity.
net2phone’s offerings include unified communications as a service (UCaaS), contact center as a service (CCaaS), and autonomous
agentic solutions, net2phone Coach and net2phone AI Agent. net2phone’s services are available worldwide with a focus on North
and South America;

■
IDT
Digital Payments: Provides prepaid digital offerings including mobile airtime top-up, mobile data bundles, digital gift cards,
eSIMs and other offerings directly to consumers through BOSS’ retail and digital channels. (Mobile airtime top-up, or simply
mobile top-up, enables customers to transfer airtime and bundles of airtime, messaging, and data to international and domestic mobile
accounts.) IDT Digital Payments’ B2B prepaid-as-a-service platform, Zendit, enables businesses, entrepreneurs, and developers
to offer prepaid digital offerings;

■
BOSS
Revolution: Provides international long-distance voice calling marketed primarily to immigrant communities in the United States
and Canada. BOSS Revolution is provisioned through the popular BOSS Revolution app and prepaid ‘hard cards’ sold by a nationwide
network of over 30,000 BOSS Revolution retail agents; and

■
IDT
Global: Provides wholesale international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide.
Through its IDT Express branded self-provisioning portal, IDT Global also serves small and medium businesses.

IDT
also operates other, smaller businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Our
headquarters is located at 520 Broad Street, Newark, New Jersey 07102. The main telephone number at our headquarters is (973) 438-1000
and our corporate website’s home page is www.idt.net.

SEGMENT
REPORTING

We
have four reportable business segments: (1) National Retail Solutions, or NRS; (2) Fintech; (3) net2phone; and (4) Traditional Communications.

The
NRS segment, which contributed revenue of $128.8 million in fiscal 2025 and $103.1 million in fiscal 2024 (10.5% and 8.6% of our total
revenues, respectively) comprises our NRS business.

1

The
Fintech segment, which contributed revenue of $154.6 million in fiscal 2025 and $120.7 million in fiscal 2024 (12.6% and 10.0% of our
total revenues, respectively), comprises our BOSS Money remittance business and other, significantly smaller, financial services businesses.

The
net2phone segment, which contributed revenue of $87.9 million in fiscal 2025 and $82.3 million in fiscal 2024 (7.1% and 6.8% of our total
revenues, respectively), offers AI-driven communications solutions to businesses primarily in North and South America.

The
Traditional Communications segment, which contributed revenue of $860.2 million in fiscal 2025 and $899.6 million in fiscal 2024 (69.8%
and 74.6% of our total revenues, respectively) includes IDT Digital Payments, BOSS Revolution, and IDT Global, as well as other small
businesses and offerings including early-stage business initiatives and mature businesses in harvest mode.

Financial
information by segment is presented in Note 2 to our Consolidated Financial Statements in Item 8 to Part II of this Annual Report.

We
make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments
to these reports, and all beneficial ownership reports on Forms 3, 4 and 5 filed by directors, officers and beneficial owners of more
than 10% of our equity through the investor relations page of our website (http://ir.idt.net/) as soon as reasonably practicable after
such material is electronically filed with the Securities and Exchange Commission. Our website also contains information not incorporated
into this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission.

KEY
EVENTS IN OUR HISTORY

1990
– Howard S. Jonas, our founder, launches International Discount Telephone to provide international call re-origination services.

1996
– We successfully complete an initial public offering of our common stock.

2000
– We complete the sale of a stake in our net2phone subsidiary, a pioneer in the development and commercialization of Voice over
Internet Protocol, or VoIP, technologies and services, to AT&T for approximately $1.1 billion in cash. We subsequently repurchased
net2phone from AT&T.

2001
– Our common stock is listed on the New York Stock Exchange, or NYSE.

2007
– We complete the sale of IDT Entertainment to Liberty Media for $220.0 million in cash, stock and other considerations.

2008
–We launch BOSS Revolution, a pay-as-you-go international calling service. BOSS Revolution has since become our flagship brand,
and the BOSS Revolution platform has expanded to include payment offerings.

2009
– We spin-off our CTM Media Holdings subsidiary to our stockholders. CTM Media Holdings was subsequently renamed IDW Media Holdings,
Inc.

2011
– We spin-off our Genie Energy Ltd. subsidiary to our stockholders. Genie Energy’s common stock is listed on the NYSE with
the ticker symbol “GNE”.

2013
– We spin-off our subsidiary, Straight Path Communications, Inc., or Straight Path, including its wireless spectrum holdings, to
our stockholders. Straight Path was purchased in February 2018 by Verizon Communications Inc.

–
We introduce our BOSS Revolution app for Android and iOS.

–
We launch our BOSS Money international remittance service.

2015
– net2phone launches its UCaaS offering in the United States.

2016
– We spin-off our Zedge subsidiary to our stockholders. Zedge’s stock is listed on the NYSE American with the ticker symbol
“ZDGE”.

–
We launch NRS to provide POS-based services to independent retailers in the United States.

2017
– We introduce our BOSS Money app for Android and iOS.

2

2018
– We spin-off our Rafael Holdings, Inc. subsidiary to our stockholders. Rafael Holdings’ stock is listed on the NYSE with
the ticker symbol “RFL”.

2019
– NRS launches NRS PAY, enabling retailers to accept credit cards and other forms of digital payment.

2022
– net2phone acquires Integra CCS, or Integra, a CCaaS provider operating in the Americas and Europe.

2024
– We initiate payment of a regular quarterly dividend to holders of our Common Stock.

2025
– net2phone launches net2phone AI Agent, a customizable, AI-powered offering delivering exceptional customer experiences across
sales, support and administrative tasks, and Coach, an AI-driven workforce intelligence and coaching platform.

–
NRS surpasses 37,000 active terminals operating at over 32,000 independent retailers.

–
BOSS Money handles 2.3 million remittances for customers in May, 2025.

OUR
STRATEGY

We
are a fintech and communications solutions provider with synergistic offerings focused on underserved, fragmented consumer and B2B markets.
Many of our offerings leverage one or more of our core strategic assets – assets that we have carefully built during the thirty-five
years since our inception. These assets include:

■
Our
popular BOSS consumer brands (BOSS Money and BOSS Revolution) and our leading B2B brands NRS, NRS Pay, NRS Digital Media, NRS Insights,
net2phone, IDT Global and Zendit;

■
Our
nationwide network of over 32,000 independent retailers who operate NRS’ POS-based platform and approximately 25,000 BOSS Revolution
and BOSS Money retailers who utilize our digital retailer platform;

■
Our
customer base of more than seven million people, predominantly first and second-generation immigrants within the U.S.;

■
Our
global technology infrastructure and high-capacity transaction platforms;

■
Extensive
VoIP and cloud services expertise; and

■
Our
staff of approximately 2,400 dedicated personnel working in over 30 countries on five continents including in-house technology and
product development teams.

The
development of each of our current high margin growth businesses – NRS, BOSS Money, and net2phone - has been principally organic
and financed with the cash flows generated by our mature businesses. Consequently, we have avoided debt financing and dilutive capital
raises. Today, each of these high-margin growth businesses is cash-flow positive, and in combination with our efforts to maximize the
cash generation of our lower margin, mature offerings, have enabled us to improve our consolidated bottom-line performance in recent
years, to further strengthen our balance sheet, and to return value to stockholders through purchases of our Class B common stock and
payment of a quarterly dividend. We expect that this trend will continue as the three high-margin businesses steadily become larger contributors
to our top and bottom-line results.

We
seek to accelerate and extend this rotation by developing new offerings organically and through acquisitions that leverage our balance
sheet. Broadly speaking, these efforts are focused on, but not limited to, our POS, fintech and AI businesses, and typically involve
development or application of new technologies, expansion to new markets, or both.

BUSINESS
DESCRIPTION

National
Retail Solutions

NRS
generated $128.8 million in revenues and income from operations of $27.8 million in fiscal 2025, as compared with revenues of $103.1
million and income from operations of $21.6 million in fiscal 2024.

NRS
operates a network of POS terminals at independent retailers throughout the United States and has a small but growing presence in Canada.
The NRS solutions include integrated hardware and software tools that enable these retailers to operate more efficiently and compete
more effectively against larger retail chains.

The
POS terminal’s hardware includes a cash register, barcode scanner, retailer and customer-facing hi-definition screens, a receipt
printer, and a credit card reader. NRS’ integrated, proprietary software is offered to retailers as a service and provides operational
tools including inventory management, sales tracking, price book management, and other useful features. NRS technology teams continuously
enhance the software and develop new features to better serve existing customers and facilitate expansion into additional retail market
segments.

3

The
primary market for NRS’ POS terminals is the independently owned convenience, bodega, liquor, grocery, and tobacco stores, many
of which primarily serve foreign-born communities in urban areas.

NRS
continues to increase the number of POS terminals active in its network. As of July 31, 2025, the NRS POS network included approximately
37,200 terminals, an increase from 32,100 a year earlier. We believe that our network of NRS retailers comprises the largest POS network
serving independent convenience store retailers in the U.S. by a significant margin.

NRS
markets through three channels:

■
wholesale
distributors;

■
dedicated
sales agents including exclusive agents and BOSS agents; and

■
in-house
telemarketing.

NRS
generates revenue from a portfolio of services for both retailers and third parties. The majority of revenue is generated by recurring
services including:

■
Merchant Services.
Merchant services revenue is generated by enabling retailers to accept and process payments made by credit cards, debit cards, electronic
benefits transfer and other forms of electronic payment. The NRS offering is attractive to retailers for several reasons:

■
For new customers / retailers,
NRS incentivizes retailers to also enroll in NRS payment processing by reducing the cost of the NRS POS hardware;

■
NRS’ payment processing
pricing model is straightforward and easily understood. NRS does not charge hidden fees – a frequent sore point for retailers
under contract to other providers;

■
NRS provides the payment
processing equipment at no cost to the retailer; and

■
NRS offers several credit
card processing plans that include a cash discount offering, a standard plan and customized pricing.

NRS
operates as an independent service organization (ISO), acting as an essential, retailer-facing intermediary between NRS retailers and
its payment facilitator.

At
July 31, 2025, NRS had approximately 26,500 NRS payment processing customers compared to approximately 21,300 a year earlier.

■
Display Advertising.
NRS’ offerings participate in the retail media network advertising market. Through its NRS Digital Media brand, NRS operates
a nationwide, digital retail media platform. The platform leverages the 15-inch digital consumer facing display screens on each NRS
terminal enabling advertisers to engage customers at the time of purchase. NRS Digital Media offers its large inventory of static and
video advertisements, including video accompanying third-party provisioned content, extensive reach into the predominantly urban, multicultural
consumer market served by NRS retailers. NRS Digital Media goes to market through both programmatic advertising platforms that match
buyers with sellers in real time, and, to a lesser extent, through direct channels to consumer package-good sellers and other brand
marketers, government agencies and non-profits.

■
Data and Analytics:
NRS licenses its first party retail data from merchants operating the NRS POS system to consumer-packaged goods brands, marketers,
and other third-parties under its NRS Insights brand. This data captures product sales processed through the NRS POS at the transaction
level including all scannable products identified with a universal product code (UPC) as well as items prepared or packaged in-house,
i.e., brewed coffee, bakery, and food service. The data are provisioned based on the client’s formatting and business requirements
and are typically ingested into broader sales and marketing data warehouses. NRS Insights’ data typically fill a blind spot in
overall retail sales, as the independent retailer market that NRS serves is often either under-represented through common data syndicators
or not included in their “tracked channels”. Additionally, because NRS retailers’ stores predominantly serve urban
consumers, their shoppers over-index to multicultural demographics – a view that may be diluted or unavailable through other
data providers and aggregators.

The
NRS Insights data are used by licensees both tactically and strategically. Common tactical applications of the data include sales enablement
activities such as identifying core item distribution voids and monitoring speed to shelf and adoption of new product launches. Popular
strategic applications of the data include gaining competitive intelligence, informing research and development activities, and informing
acquisition and merger strategies.

NRS
Insights also provides analytical services to third parties, leveraging its data to answer high impact business questions including,
but not limited to, advertising measurement, market-basket studies, inventory (SKU) optimization, and price elasticity.

■
Terminal-based software
services. NRS offers retailers several Software as a Service (SaaS) plans for its proprietary terminal software. These plans offer
differentiated packages of features and functionalities including advanced business operations tools, e-commerce functionalities, and
loyalty program management, many of which can be purchased separately. Additional services are offered to retailers on an a la carte
basis.

4

In
addition to these recurring sources of revenue, NRS sells its POS terminals to retailers. Discounted terminal pricing is available to
retailers who sign up for NRS Pay.

We
believe that NRS’ competitive advantages include:

■
Our purpose-built package
of hardware and software is tailored specifically to the needs of independent retailers;

■
Our established direct sales
and marketing capabilities focused on independent retailers including our relationships with the wholesale distributors who supply
these stores;

■
Our POS terminal’s
15 inch hi-definition customer-facing screen for displaying advertising and promotions provisioned via the NRS platform, and established
relationships with supply side advertising platforms;

■
Our ability to accept and
target advertising and content in multiple formats to meet the needs of a diverse variety of potential advertising inventory buyers;

■
For our data analytics business,
the scale of our network and unique reach into the urban consumer convenience store market;

■
Our focus on urban markets
with high concentrations of first- and second-generation immigrants that provides advertisers and marketers with unprecedented reach
and insight into these communities;

■
For NRS payment processing,
we are ideally positioned to supply payment processing services to retailers who purchase, or already utilize, our terminals, and appeal
to many more potential customers through simplified, transparent pricing plans with credit card terminals, no hidden fees and lower
total cost to operate than most competitors;

■
n certain states, NRS’
payment processing solution is licensed to accept governmental electronic benefit transfers that certain competitors may not be licensed
to accept;

■
Because of our large scale
compared to newcomers and smaller competitors, we can attractively price our software-as-a-service fees at levels that are generally
well below theirs;

■
Our ability to leverage new
offerings for retailers through third party providers who are attracted by our scale and the flexibility of our platform; and

■
Our experienced and proven
management team, many of whom have been with NRS since inception.

NRS’
growth strategy includes:

■
Expansion of our POS terminal
network into new retail verticals, enabled in some markets, by the development of new POS hardware formats and software functionalities;

■
Subsidize the POS hardware,
particularly for retailers who also enroll in NRS payment processing;

■
For NRS payment processing,
conversion of current NRS terminal customers, particularly as contracts with their existing credit card processors expire, and conversion
of existing NRS payment processing customers to higher margin pricing plans;

■
For NRS advertising, integrations
with new programmatic advertisers and the development of differentiated offerings that enable us to more effectively leverage the unique
strengths of our platform;

■
Develop partnerships to provide
NRS retailers with robust home delivery service options; and

■
Build out the NRS digital
wholesale supply channel to provide NRS retailers with new cost-effective supply options.

5

Competition

Currently,
nationwide POS platform service providers, including Square, Toast, Lightspeed, Clover, and NCR, primarily serve retail chains or are
focused on other retail segments, such as sit-down restaurant chains.

NRS
markets its POS platform offerings primarily to independent convenience stores, including bodegas, and other small format retailer store
owners including liquor and tobacco stores. A large majority of new NRS customers did not previously use a POS system. In the minority
of cases where potential customers are using, or are considering using, an alternative solution, we believe that NRS’ suite of
proprietary software solutions, affordable and discounted POS equipment and free credit card terminals are key drivers behind its success
versus the competition.

NRS
expects to encounter more frequent direct competition from local and/or national POS networks as it expands to new adjacent target markets.

Fintech

Fintech
is comprised of BOSS Money and other, significantly smaller, financial services businesses. Fintech revenues were $154.6 million in fiscal
2025 compared to $120.7 million in fiscal 2024. Fintech’s income from operations was $15.4 million in fiscal 2025 compared to a
loss from operations of $0.1 million in fiscal 2024. BOSS Money revenues were $139.8 million in fiscal 2025, an increase of 29.1% from
revenues of $108.3 million in fiscal 2024.

BOSS
Money enables customers in the United States to send money conveniently and affordably to third parties around the world. International
remittances are a primary economic activity for the tens of millions of first- and second-generation immigrants in the United States.
At July 31, 2025, BOSS Money provided its remittance service to 50 countries through approximately 1,800 disbursement partners and its
payout network included over 250,000 cash payout locations worldwide in addition to a growing number of bank deposits, mobile money wallets,
debit cards, and home delivery payout options.

BOSS
Money is offered directly to consumers via our digital channel — the BOSS Money app and the BOSS Revolution app. To utilize our
digital channel, customers can use their debit or credit cards or authorize ACH transfers from their bank accounts.

Our
retail channel network comprises licensed and authorized BOSS Money agents nationwide. Customers can initiate transfers through a BOSS
Money agent with cash as well as with their debit or credit cards.

We
continue to build our retail origination network by using our internal sales force to recruit new BOSS Money retailers, primarily focusing
on retailers that already provision BOSS Revolution and IDT Digital Payments services. To qualify to provide our service, BOSS Money
retailers must meet stringent financial and other regulatory qualifications. We also continue to enhance the BOSS Money retailer portal
and platform to make transaction execution more convenient for retailers, the majority of whom host multiple remittance providers.

We
continue to expand our BOSS Money customer base at rates well above the domestic remittance industry’s average by marketing our
service to the large base of customers who utilize our BOSS Revolution voice calling and IDT Digital Payments offering. We offer new
customers attractive fee and foreign exchange rate offers, through both our digital and retail channels, and through online, media and
events advertising.

BOSS
Money generates revenues from a per-transaction fee charged to the customer and from foreign exchange differentials. Our transaction
costs include commissions paid when the transaction is initiated by a retail agent, payment to the international disbursing agent, banking,
compliance and foreign currency exchange costs, and, for digital transfers, credit and debit card processing fees.

BOSS
Money’s gross margins are typically higher on remittances initiated through our digital channels compared to retail channel transactions,
as we pay retail agents transaction-based commissions on the latter.

Competition
and Competitive Strengths

The
money transfer industry is intensely competitive, with participants ranging from banks, digital remittance providers, fintech startups
and traditional remitters. Digital competitors such as Xoom (a subsidiary of PayPal), Wise, Remitly, and Sendwave along with traditional
money remitters, including Western Union, Ria, MoneyGram, Intermex and Viamericas compete in the remittance space.

6

We
continue to compete successfully in part by migrating customers of our other BOSS offerings from their current remittance providers to
BOSS Money leveraging our highly regarded BOSS brand, insights into our customers, and cross-marketing capabilities. We compete for customers
outside the BOSS ecosystem primarily based on brand reputation, low fees, and competitive foreign exchange rates. We believe that BOSS
Money’s competitive strengths include:

■
Our BOSS name is an established
and trusted brand that has served immigrant communities in the United States for well over a decade. We spend significantly on BOSS-branded
marketing to support BOSS Revolution and BOSS Money. Through the nationwide network of over 30,000 BOSS Revolution retailers, the BOSS
brand has a high-visibility storefront presence in many communities with significant immigrant populations;

■
The BOSS customer eco-system
includes the large customer bases of BOSS Revolution and IDT Digital Payments. We are able to significantly lower BOSS Money’s
customer acquisition costs, and therefore grow more efficiently, through our intensive cross-product marketing efforts within our eco-system;

■
The BOSS Money and BOSS Revolution
apps, which are used for the substantial majority of our transactions, are based on a proprietary, internally developed, scalable platform
that has earned high marks from customers for its ease of use, reliability, and customer service;

■
Our internal sales force,
which serves our 30,000 BOSS Revolution retailers;

■
Our nationwide retail channel
that enables underbanked and unbanked customers to initiate cash transactions;

■
Our comprehensive compliance
processes and procedures;

■
Our ready access to capital
leveraging IDT’s strong balance sheet including robust levels of cash and cash equivalents; and

■
Our experienced management
team.

BOSS
Money’s growth strategy includes:

■
Expansion of our international
payout network with a focus on growth in Latin America, Africa and Asia;

■
Continued migration of our
BOSS Revolution and IDT Digital Payments customers from competitors to BOSS Money;

■
Further enhancements to our
BOSS Money app, BOSS Revolution app and retailer portal;

■
Increasing the number of
BOSS Money retail agents; and

■
Addition of new features
and offerings including the deployment of a wallet to receive, hold and pay for remittances and other Boss products.

net2phone

net2phone’s
revenues were $87.9 million in fiscal 2025 compared to $82.3 million in fiscal 2024. net2phone’s income from operations was $4.9
million in fiscal 2025 compared to $1.7 million in fiscal 2024.

net2phone
enables its customers to transform their communications by leveraging its cloud platform to provide solutions that enable more intelligent,
flexible and adaptive communications. net2phone operates in the United States, Canada, Mexico, Central and South America and Spain.

net2phone’s
offerings include:

■
Unified Communications
as a Service (UCaaS): net2phone’s UCaaS service utilizes its cloud platform to provide conversational continuity across channels
from any connected device – tethered or mobile – and to measure, manage and analyze those communications for enhanced insight
and productivity. net2phone provides its UCaaS customers that convert from on-premise PBXs with advanced Internet Protocol, or IP,
desktop phones and/or with a bring-your-own-device solution accessed through its integrated web portal and through net2phone’s
mobile app. net2phone’s UCaaS service includes multi-channel communications with voice management features, unlimited domestic
and international calling to over 40 countries, robust messaging and chat tools, voicemail to email transcription, client analytics,
AI-powered functionalities including instant call summaries and transcripts, internal team chat, the net2phone Huddle video conferencing
service, and reporting and system management capabilities accessed through its online console. net2phone’s UCaaS service integrates
seamlessly with business communication platforms (such as Microsoft Teams and Slack), leading customer relationship management, or
CRM, services (such as SalesForce, Zoho and others) and text-based communications platforms. net2phone adds features, enhancements
and integrations on a regular basis leveraging its agile development philosophy.

7

■
Contact Center as a Service
(CCaaS): net2phone offers robust and integrated cloud CCaaS solutions under its uContact brand. uContact provides omnichannel contact
center solutions including workflows, forms, reports, dashboards, CRM alerts, and monitoring for inbound, outbound, or blended contact
centers. uContact also offers gamification components to improve employee efficiency and engagement. uContact is sold either as a stand-alone
offer or as a bundled solution with net2phone’s UCaaS, SIP Trunking and AI Agent offerings.

■
net2phone AI: net2phone’s
autonomous, customer-facing AI agent expertly handles both routine and complex sales, support and administrative tasks for customers
across their website, phone, and chat channels. net2phone’s AI Agent can be reached via text or voice.

■
net2phone Coach: net2phone’s
workforce intelligence and coaching platform uses real-time AI-powered insights to support employee performance. net2phone Coach resolves
the biggest drawback of remote work – a lack of supervision and coaching– with real-time employee monitoring, performance
tracking, and coaching. The platform examines multiple channels of communication, including calls, SMS, chats, emails, and video meetings.
It analyses response time, tone, sentiment, and performance trends and other tendencies to develop and deliver suggestions for improvement
and productivity gains. net2phone Coach includes an AI Assistant which can be customized to respond to unique business questions for
the business owner.

Other
net2phone differentiators include white glove customer service, integrations with third-party software and deep localization. net2phone’s
global infrastructure, locally based sales and customer support teams and native language support, enable net2phone clients to retain
the look and feel of localized customer and user experiences.

net2phone
focuses primarily on an indirect go-to-market strategy in most of its markets, utilizing extensive networks of channel partners including
Technology Solutions Brokerages (TSBs), Technology Services Distributors (TSDs), Managed Service Providers (MSPs), and Value-Added Resellers
(VARs). This channel-centric approach enables net2phone to efficiently reach its extensive target market of midsize businesses, which
rely heavily on these types of service providers to address their IT needs. net2phone’s partner channel is overseen by regional
channel sales managers employed by net2phone.

net2phone
is developing direct to end-user capabilities to market primarily its AI offerings, net2phone AI Agent and Coach, in the small and medium-sized
business market.

Both
net2phone’s channel partners and direct business customers choose its solutions because of our user-friendly offerings, availability
of in-house support agents, value proposition, and track record of reliability and stability. Channel partners value net2phone for its
extensive customization capabilities, frictionless and rapid quote generation, and competitive compensation – backed by its dedicated
channel sales team.

net2phone’s
direct marketing to channel partners and end users includes search engine marketing, search engine optimization, third-party lead generation
platforms, social media marketing, webinars, industry focused events, and other forms of demand generation.

net2phone’s
indirect marketing funnels through its network of partners, technology distributors, and affiliates and includes tradeshows and local
events, marketing development support for partners and other forms of demand generation, layered with ongoing channel sales training,
proof of concepts and demos.

net2phone
closely tracks its acquisition costs across both channels to ensure it is acquiring customers in a cost-efficient manner and consistent
with its targets for return on investment.

8

net2phone’s
growth strategy includes:

■
Further development and distribution
of net2phone AI Agent and net2phone Coach through both indirect and direct channels.

■
Refine net2phone AI agent
to offer industry vertical specific variants that integrate with popular industry-specific CRMs to handle administrative, support and
sales tasks while leveraging industry specific learnings and workflows.

■
Within its UCaaS offerings,
expand AI-powered functionalities to further leverage the large and improving capabilities of language models to drive quantifiable
improvements in customer engagement and business performance.

■
Across its offerings, net2phone
plans to introduce burstable line capacity that allows a customer to temporarily increase their bandwidth to handle short-term traffic
spikes, providing end users with the option to leverage net2phone’s robust network capabilities to temporarily exceed stipulated
line limits, thereby enabling them to effortlessly add additional capacity during periods of brief demand volatility.

■
For its UCaaS customers in
Mexico and Brazil, net2phone plans to provide integration with WhatsApp. With this integration – already available to uContact
customers, clients will be able to send and receive WhatsApp messages on the net2phone portal.

■
Premium plan tiers: net2phone
offers multiple tiered plans with differentiated functionalities and pricing for its UCaaS and CCaaS offerings. To meet the needs of
its customers and enhance revenue per customer, sales efforts will focus on upselling premium feature sets to existing customers as
well as onboarding new customers on premium plans.

■
Focus channel expansion on
MSPs and resellers: net2phone’s continuous product development makes its offerings increasingly attractive to larger, more complex
organizations that demand more advanced feature sets. As a result, net2phone is focused on expanding its partnerships with both MSPs,
who provision services to larger, more technologically demanding end users on a subscription basis, and resellers, who purchase services
directly for subsequent resale, often under their own label, and who are responsible for customer onboarding and support.

■
Expansion of CCaaS: net2phone’s
uContact branded CCaaS solution enables net2phone to expand its channel partner portfolio by adding partners that focus mainly or exclusively
on the CCaaS space. uContact also expands net2phone’s total addressable market by allowing it to target larger enterprise accounts,
business process optimization, or BPO, providers (outsourced call centers), and international contact centers, as well as enterprises
that want an integrated UCaaS and CCaaS solution. net2phone expects CCaaS-driven opportunities will continue to increase its average
user per customer considerably beyond what it experiences in the UCaaS space. In addition, uContact is expected to generate higher
revenue per customer, while commanding stickier, longer-term relationships with customers.

■
Selectively pursue acquisitions
and strategic investments: net2phone may continue to selectively pursue acquisitions and strategic investments to strengthen its platform
with new capabilities and solutions as well as to expand its position in its existing markets or to establish a presence in new markets.

Competitive
Strengths

We
believe that net2phone’s competitive strengths include:

■
Proprietary communications-as-a-service
product suite. net2phone provides a leading, proprietary cloud-based communications and collaboration platform for its customers.
Key differentiators include net2phone’s advanced feature sets, proprietary CCaaS offering, white glove customer service, integrations
with third-party software, and deep localization. Through net2phone’s platform, customers can access voice, video, chat and messaging
services, softphone and mobile applications, customizable packages, and a partner portal. The seamlessly integrated solutions on net2phone’s
platform are delivered and centrally managed through an intuitive, ‘single pane of glass’ master portal that allows channel
partners and customers to easily monitor and manage the product offering. net2phone’s CCaaS offering provides software for customized
campaign management, including inbound and outbound call management, messaging, gamification, reporting, and live monitoring. net2phone’s
CCaaS offering is tailored for call centers ranging from 20 to 1,000 agents. net2phone supports seamless product suite integrations
with leading third-party CRMs and text-based business collaboration platforms including Google Meet, Microsoft Teams, Zoho, Slack,
Zapier, and Salesforce, with new integrations added to meet demand.

■
Platform built for our
channel partners. net2phone has built its platform to both serve the needs of its customers and to empower its channel partners.
We believe that net2phone’s platform provides its partners with an effective way to market and sell its comprehensive solutions
to new customers and manage its existing customers. In addition, net2phone’s integrations with leading third-party applications
enable its partners to offer more comprehensive solutions. net2phone’s suite of solutions is delivered to the marketplace both
quickly, intuitively, and precisely. net2phone has developed a proprietary partner portal exclusively for its growing partner community.
net2phone’s channel partners can easily quote and deliver a net2phone proposal and agreement proceeding directly to onboarding.

9

■
One World, One Platform.
net2phone is deploying a single cloud-based platform to provide its unified communications service globally. This single-platform approach
enables a consistent, holistic approach to new feature deployment, service upgrades, and marketing. The platform has been deployed
in the United States, Brazil, and Mexico to date. net2phone Canada is slated to go into production early in fiscal 2026.

■
Distribution power of
net2phone’s more than 2,500 active channel partners enhanced with an emergent direct to consumer strategy. net2phone’s’
vast and growing partner network gives it tremendous leverage to grow its business customer base, increase revenue from its existing
clients and expand its footprint to adjacent geographies. net2phone’s platform is tailored to support channel partners and includes
channel incentives built into its pricing structure, technology platform, and support services. net2phone puts its channel and customer
priorities first. Channel partners are motivated to sell net2phone’s offering due to its premier, localized channel partner support
and marketing. While net2phone is primarily focused on strategically growing its channel sales, it has also been focusing on the expansion
of its direct-to-business sales.

■
Differentiated customer
support and local market presence. net2phone offers channel partners and customers white glove customer service, integrations with
third-party software, and deep localization. net2phone’s on-the-ground presence in international markets accounted for approximately
84% of its personnel at the end of fiscal 2025. Regional-based customer service and sales teams are a key differentiator and propel
net2phone’s international business.

■
Track record and focus
on innovative solutions. net2phone’s long track record of innovation includes the development of its proprietary UCaaS platform,
including the Huddle video conferencing service, as well as numerous patents around virtualized communication technologies. Recently,
net2phone’s leverage of AI include the Huddle video platform being upgraded with real-time AI summaries and reporting as well
as the launch of net2phone AI Agent and net2phone Coach.

■
Employee-friendly culture
that allows net2phone to attract and retain talent. net2phone has sought to create a workplace and culture that is entrepreneurial,
positive, employee-friendly and encourages its employees to work towards its shared goals of delivering innovative solutions to its
customers and supporting its partners. As of July 31, 2025, net2phone had approximately 540 employees worldwide, with 84% located outside
of the United States.

Competition

net2phone’s
most significant competitors in the UCaaS space include RingCentral, 8x8, Crexendo, Vonage, Dialpad and Nextiva. Some AI agent focused
(only) companies such as Lindy or Phonely are also competitors. Many of these companies offer more widely recognized brands, larger and
more developed marketing and sales forces and/or channel agent networks, and more advanced product sets and solutions customized for
specific market segments or verticals. These competitors’ offerings typically also support integration of their services with other
well-known, third-party CRM vendors as well as with various Google and Microsoft applications.

The
CCaaS market is fragmented, highly competitive and evolving rapidly in response to shifting consumer behavior, especially the rapid adoption
of AI, mobile devices and social media. This proliferation is driving change in contact center technology, as customers expect seamless
communication across any channel according to their preference and needs. net2phone competes with large legacy vendors that offer on-premises
contact center systems, such as Avaya and Cisco. These legacy telephony vendors are increasingly supplementing and replacing their traditional
contact center systems with competing cloud offerings, through a combination of acquisitions, partnerships, and in-house development.
Additionally, net2phone competes with vendors that historically provided other contact center services and technologies and expanded
to offer cloud contact center software such as NICE, Five9, and Genesys. net2phone also faces competition from many smaller contact center
service providers such as Talkdesk and Seranova, as well as vendors offering both unified communications and contact center solutions.
In addition, Amazon and Twilio have introduced solutions aimed at companies who wish to build their own contact centers with in-house
developers. CRM vendors are also increasingly offering features and functionality that were traditionally provided by contact center
service providers. CRM vendors also continue to partner with contact center service providers to provide integrated solutions and may,
in the future, acquire competitive contact center service providers.

10

Traditional
Communications

Our
Traditional Communications segment generated $860.2 million in revenues and income from operations of $66.5 million in fiscal 2025, as
compared with revenues of $899.6 million and income from operations of $56.4 million in fiscal 2024.

Traditional
Communications comprises the following businesses:

■
IDT Digital Payments, which
includes certain consumer prepaid offerings – primarily mobile top-up, which enables customers to transfer airtime and bundles
of airtime, messaging, and data to international and domestic mobile accounts, and Zendit, its cloud-based prepaid-as-a-service platform,
which enables businesses and developers to offer prepaid digital offerings globally through their apps and websites;

■
BOSS Revolution, an international
long-distance calling service marketed primarily to immigrant communities in the United States and Canada;

■
IDT Global, a wholesale provider
of international voice and SMS termination and outsourced traffic management solutions to telecoms worldwide; and

■
Other small businesses and
offerings including early-stage business initiatives and mature businesses in harvest mode.

IDT
Digital Payments

IDT
Digital Payments’ revenues were $416.3 million in fiscal 2025 compared to $407.4 million in fiscal 2024 (48.4% and 45.3% of Traditional
Communications’ revenues in fiscal 2025 and fiscal 2024, respectively). The substantial majority of IDT Digital Payments’
revenue is from sales of international mobile top-up services. IDT Digital Payments offers mobile top-up for approximately 194 different
carriers in more than 113 countries, primarily in Latin America, the Caribbean and Africa. IDT Digital Payments leverages our platform
capabilities, our distribution reach into foreign-born communities and our relationships with mobile operators around the world.

IDT
Digital Payments is sold through the BOSS platform primarily through three channels:

■
direct-to-consumer, through
the BOSS digital channel, including our BOSS Revolution and BOSS Money apps, and the BOSS Revolution website;

■
retail, through our BOSS
Revolution retail network including direct provisioning by retailers using our BOSS Revolution retailer platform, NRS terminals and
through mobile operator-branded top-up cards; and

■
enterprise and wholesale,
in which we provision international offerings for other businesses through Zendit’s cloud-based prepaid-as-a-service platform.

IDT
Digital Payments’ growth drivers include deployment of additional data-centric bundles to meet the growing demand for data from
mobile phone customers in developing countries worldwide, the introduction of digital gift cards and e-sims, cross selling to our current
BOSS Revolution and BOSS Money customers, expansion of the Zendit prepaid platform, and further expansion into the enterprise and wholesale
market as well as other regions.

Competition

IDT
Digital Payments’ major competitors include:

■
international mobile operators,
who seek to control more of their own distribution channel or create their own products that directly compete with IDT Digital Payments;
and

■
other service providers,
distributors, and wholesalers, including Western Union, Ria, Viamericas, DT One, Ding, and Recharge.com.

We
believe that IDT Digital Payments’ competitive advantages include:

■
our direct connection to
most of the Tier 1 and Tier 2 mobile carriers worldwide;

■
the strength of IDT’s
balance sheet, which allows us to compete effectively in capital intensive prepaid markets;

11

■
our extensive distribution
and retail networks that provide us with a strong presence in communities of foreign-born residents, a significant portion of which
purchase our services with cash; and

■
our strong omni channel approach,
which includes the BOSS Revolution retailer network, the BOSS digital platform, including the BOSS Money and BOSS Revolution apps and
the BOSS Revolution website, and the enterprise and wholesale channel.

BOSS
Revolution

BOSS
Revolution’s revenues were $211.2 million in fiscal 2025 compared to $263.2 million in fiscal 2024 (24.6% and 29.3% of Traditional
Communications’ revenues in fiscal 2025 and fiscal 2024, respectively).

BOSS
Revolution is a prepaid international long-distance calling service marketed primarily to foreign-born and under-banked consumers in
the United States and Canada, and a digital-only offering in Europe and Australia.

BOSS
Revolution includes our flagship ‘BOSS Revolution’ branded international long-distance prepaid calling service as well as
disposable hard cards sold under a variety of brands. In the United States, BOSS Revolution served, as of July 31, 2025, approximately
1.4 million customers per month.

BOSS
Revolution is offered through our digital channels – the BOSS Revolution app and website, and through our extensive national network
of BOSS Revolution retailers.

BOSS
Revolution allows users to place international long-distance calls at affordable rates from the BOSS Revolution app or by calling an
access number. Regardless of how the call originates, our customers must first establish and top-up a prepaid BOSS Revolution account
that is linked to their phone. Customers can open a BOSS Revolution account for free and top-up with a debit or credit card using the
BOSS Revolution app, through the BOSS Revolution website (www.bossrevolution.com) or by phone, or with cash at any BOSS Revolution retailer.
Once the account is established and a call is placed, our platform recognizes the customer’s phone through its network-provided
automatic number identification and seamlessly links each call to the corresponding BOSS Revolution account. Callers then enter their
destination phone numbers. BOSS Revolution customers’ account balances are debited at a fixed rate per minute or at a fixed amount
for calling plans to a specific country over a specified time period. In contrast to certain of our competitors, BOSS Revolution does
not charge connection, usage or breakage fees. BOSS Revolution’s per minute rates vary by the destination country, city, and whether
the call is placed to a landline or mobile phone. Rates are published on the BOSS Revolution website and within the BOSS Revolution app.

Users
of the BOSS Revolution app constitute the majority of our customers to date. At July 31, 2025, approximately 1.0 million customers per
month utilized the BOSS Revolution app.

In
the United States, we distribute our BOSS Revolution hard cards and other retail products primarily through our network of distributors
that, either directly or through sub-distributors, sell to retail locations. In addition, our internal sales force sells BOSS Revolution
and other platform products directly to retailers.

At
July 31, 2025, approximately 30,000 retailers per month utilized our digital retailer platform to provision customers, the substantial
majority of whom pay the retailer in cash. In addition, we estimate that approximately 1,700 retailers resell our disposable hard cards
without utilizing our retailer portal. BOSS Revolution retailers are typically independent retailers serving foreign-born communities
with significant unbanked or under-banked populations.

The
BOSS Revolution retailer portal can be accessed by any broadband enabled device. Through the portal, retailers can access our platform
to create accounts for new customers, add funds to existing customer balances and execute sales transactions. The platform provides us
with a direct, real-time interface with our BOSS Revolution retailers to create a cost-effective and adaptable distribution model that
allows us to target and promote services directly to distributors and retailers, to introduce and cross-sell new offerings, and to rapidly
adapt to changes in the business environment.

In
the United States, the BOSS Revolution brand is supported by national, regional, and local marketing programs that include television
and radio advertising, online advertising and grass roots marketing at community and sporting events. In addition, we work closely with
distributors and retailers on in-store promotional programs and events.

BOSS
Revolution’s retail sales have traditionally been, and continue to be, strongest in the Northeastern United States and in Florida
because of our extensive local distribution network. We continue to grow BOSS Revolution’s distributor relationships and expand
BOSS Revolution’s retail network in other areas of the United States and Canada, including the Southwest and West Coast.

12

Competition

BOSS
Revolution is subject to fierce competition. While virtually any company offering communication services is a competitor, we face particularly
strong competition from Tier 1 mobile network operators who offer flat-rate international calling plans, other PIN-less prepaid voice
offerings, prepaid calling card providers, mobile virtual network operators, and VoIP and other “over the top”, or OTT, service
providers. Outside the United States, we also compete with large state-owned or state-sanctioned telephone companies.

Many
of these companies, including AT&T, Verizon, and T-Mobile, are substantially larger and have greater financial, technical, engineering,
personnel, and marketing resources, longer operating histories, greater name recognition, and larger customer bases than we do.

In
addition to these larger competitors, we face significant competition from smaller prepaid calling providers.

From
time to time, competitors may offer rates that are substantially below ours, in an attempt to gain market share. In some instances, these
rates are below what we believe to be the cost to provide the service. This predatory pricing can adversely affect our revenues and our
gross margins.

The
continued growth of OTT calling and messaging services such as WhatsApp, Messenger, FaceTime, and others have adversely affected the
sales of BOSS Revolution and our other prepaid calling services. We expect the popularity of these IP-based services—many of which
offer free voice and/or video communications—to continue to increase, which will increase substitution for, and pricing pressure
on, our BOSS Revolution and other international prepaid calling offerings. However, free services typically require both the caller and
recipient to have a broadband connection. BOSS Revolution utilizes telephone networks to enable voice communications even when neither
party has broadband connectivity.

Many
mobile operators offer unlimited international long-distance plans that include international destinations to which customers can place
direct calls from their mobile phones without time limitation. These plans now include some of our most popular international destinations.
The growth of these “international unlimited” plans adversely affects our revenues as these operators gain subscriber market
share.

Our
ability to compete successfully against these various operators and service providers stems from several factors, including:

■
our interconnect and termination
agreements, network infrastructure, and least-cost-routing system enable us to offer low-cost, high-quality services;

■
our continued innovation
with new plans tailored to the specific needs of different corridors and finding new ways of delivering more value to consumers striving
to connect with family and friends around the globe;

■
our extensive distribution
and retail networks provide us with a strong presence in communities of foreign-born residents, a significant portion of which purchase
our services with cash;

■
our BOSS Revolution brand
is often highly visible in these communities and has a reputation for quality service and competitive, transparent pricing;

■
our continued migration of
our existing customers to our digital platform including the BOSS Revolution app; and

■
our offering of synergistic
IDT Digital Payments and BOSS Money over the BOSS Revolution platform that customers can conveniently access from their accounts.

Our
ability to maintain and/or to capture additional market share will remain dependent upon our ability to continue to provide competitively
priced services, to maintain our distribution and retail networks, to increase usage through the BOSS Revolution app, and to innovate
new products and services to fit the evolving needs of our customers.

IDT
Global

IDT
Global’s revenues were $209.6 million in fiscal 2025 compared to $201.1 million in fiscal 2024, contributing 24.4% and 22.4% of
Traditional Communications’ revenues in fiscal 2025 and fiscal 2024, respectively.

IDT
Global is one of the larger wholesale carriers of international long-distance minutes in the world.

13

IDT
Global’s telecommunications network is comprised of interconnections and commercial relationships that reach virtually every significant
global telecom operator. These relationships enable us to carry international telecommunications traffic to more than 200 countries around
the world. IDT Global’s customers include our BOSS Revolution and net2phone businesses, major and niche carriers around the globe,
mobile network operators, and other service providers such as call aggregators. For many of these customers, particularly the major carriers,
we engage in buy-sell relationships, terminating their customers’ traffic in exchange for terminating our traffic with them.

IDT
Global offers competitively priced international termination rates at several quality levels. We can offer competitively priced termination
services in part because of the large volumes of originating minutes generated by our BOSS Revolution business, our global platform powered
by proprietary software, our team of professional and experienced account managers and market makers, and our global network of interconnections
and relationships with other telecom operators. IDT Global’s services are marketed and sold through our internal account management
team and the IDT Express digital portal. IDT Express focuses on delivering wholesale voice and direct inward dialing, or DID, services
to small and medium size businesses domestically and internationally.

Traditional
Communications terminated 7.4 billion minutes in fiscal 2025, as compared to 8.0 billion minutes in fiscal 2024. IDT Global accounted
for 5.68 billion minutes and 5.70 billion minutes of the total Traditional Communications’ minutes in fiscal 2025 and fiscal 2024,
respectively.

IDT
Global has a significant number of direct connections to Tier 1 providers in North America, Latin America, Asia, Africa, Europe, and
the Middle East. Tier 1 providers are the largest recognized licensed carriers in the country. Direct connections improve the quality
of the telephone calls and reduce the cost, thereby enabling us to generate more traffic with higher margins to the associated foreign
locales. We also have direct relationships with mobile network operators, reflecting their growing share of the voice traffic market.

Termination
rates charged by Tier 1 and other providers of international long-distance traffic have been declining for many years. Nevertheless,
termination rates charged to us by individual Tier 1 carriers and mobile operators can be volatile. Termination price volatility on heavily
trafficked routes can significantly impact our minutes of use and wholesale revenues.

In
addition to offering competitive rates to our carrier customers, we emphasize our ability to offer the high-quality connections that
these providers often require. To that end, we offer higher-priced services in which we provide higher-quality connections, based upon
a set of predetermined quality of service criteria. These services meet a growing need for higher-quality connections for some of our
customers who provide services to high-value, quality-conscious retail customers. As of July 31, 2025, IDT Global, through its wholesale
carrier organization and IDT Express channel had more than 1,450 customers, including more than 280 carrier relationships globally.

IDT
Global’s revenues are generated by sales to both postpaid and prepaid customers. Postpaid customers typically include Tier 1 carriers,
mobile network operators, and our most creditworthy customers. The majority of IDT Global’s prepaid customers connect via our IDT
Express portal. IDT Express offers the convenience of a mobile self-service portal paired with dedicated account managers backed by customer
support. Prepaid customers are typically smaller telecommunication companies as well as independent call aggregators.

IDT
Global also offers outsourcing services to help fixed and mobile telephony operators enhance the profitability and value of their international
voice operations. IDT Global offers these operators customized solutions, including full outsourcing, handing all inbound and outbound
calls with or without switch management, and hybrid arrangements whereby the operator retains certain routes or customers directly. Pursuant
to these deals, IDT Global collaborates with the operators to provide a full range of international long-distance services to their respective
customers in-country and overseas.

IDT
Global is subject to intense revenue and margin pressure as communications globally continues to transition away from international voice
calling to video conferencing and other collaboration platforms, low-cost or free messaging services, free peer-to-peer voice calls available
when both parties utilize broadband connections, and flat-rate international long-distance plans offered both by the largest mobile network
operators and niche mobile virtual network operators.

14

Competition

The
wholesale carrier industry has numerous entities competing for the same customers, primarily based on price and quality of service.

IDT
Global participates in a global marketplace with:

■
interexchange carriers and
other long-distance resellers and providers, including large carriers such as T-Mobile, AT&T, and Verizon;

■
historically state-owned
or state-sanctioned telephone companies such as Telefonica, Orange SA, and KDDI;

■
on-line, spot-market trading
exchanges for voice minutes;

■
OTT internet telephony providers;

■
other VoIP providers;

■
other providers of international
long-distance services; and

■
alliances between large multinational
carriers that provide wholesale carrier services.

We
believe that IDT Global derives a competitive advantage over some participants on certain routes from several inter-related factors:

■
our BOSS Revolution business
generates originating minutes, which represents a desirable, negotiable asset that helps us win return traffic and obtain beneficial
pricing which we can offer in the wholesale marketplace;

■
the proprietary technologies
powering our IDT Global platform and, in particular, the software that drives VoIP enables us to scale up or down at a lower cost than
many of our competitors;

■
our professional, dedicated
and experienced account management team; and

■
our extensive network of
interconnects around the globe, with the ability to connect in whichever format (IP or time-division multiplexing, or TDM) is most
feasible.

Communications
and Payment Network Infrastructure and Technology Development

Our
products and services utilize a combination of proprietary software as well as technologies and services provided by third parties. We
have developed intuitive user interfaces, customer tools and transaction processing, and database and network applications that enable
our users to reliably and securely complete transactions and help our customers and partners utilize our suite of services. Our technology
infrastructure simplifies the storage and processing of large amounts of data, eases the deployment and operation of large-scale global
products and services, and automates much of the administration of large-scale clusters of computers.

Our
technology infrastructure has been designed around industry-standard architectures to reduce downtime in the event of outages or catastrophic
occurrences. We strive to continually improve our technology infrastructure to enhance the customer experience and to increase efficiency,
scalability, and security. Our platforms’ architecture enables us to connect parties regardless of whether the transaction is occurring
at a traditional physical location, online, or through a mobile device. Our platforms incorporate multiple layers of protection, both
for continuity purposes and to address cybersecurity challenges. We engage in multiple efforts to protect our software platforms against
these challenges, including regularly testing our systems to address potential vulnerabilities.

Our
product and technology organization is responsible for the design, development, testing, and delivery of new software, technologies,
and features of our products and services, as well as the continued improvement and iteration of our existing products and services.
Our technology employees are distributed globally in our Newark, Jerusalem, Guatemala, Warsaw, and Minsk offices. Our technology team
consists of our software engineering, voice engineering, quality engineering, data warehousing, ML (Machine Learning) and AI development,
data engineering, systems, NOC (Network Operations Center), and operations teams. We intend to continue to invest in our research and
development capabilities to extend our products and services.

15

Our
technology organization uses several key performance indicators to track service quality that meet or exceed industry standards for SaaS
and technology enabled services. Our technology organization maintained an aggregate service uptime of approximately 99.995% in fiscal
2025. The software defect escape ratio, a measure of quality engineering for our flagship BOSS Revolution brand, was 3% in fiscal 2025,
meaning more than 97% of product defects were detected and fixed internally before being released to our customers. Furthermore, this
high level of quality was achieved utilizing suites of proprietary tests of which the majority are fully automated by a combination of
proprietary software and technologies provided by third parties.

Our
product offerings and go-to-market strategy continue to evolve, and we expect our product offerings to continue to become available to
customers at more frequent intervals than our historical release cycles. Our Agile development methodology is characterized by a dynamic
development process with more frequent revisions to a product release’s features and functions as the software is being developed.
In addition, we have implemented a holistic portfolio management process, which has improved transparency and efficiency across the portfolio
through a recurring cadence of business reviews.

REGULATION

The
following summary of regulatory developments and legislation is intended to describe what we believe to be the most important, but not
all, current and proposed international, federal, state, and local laws, regulations, orders, and legislation that are likely to materially
affect us.

Regulation
of Telecom in the United States

Telecommunications
services are subject to extensive government regulation at both the federal and state levels in the United States. Any violations of
the regulations may subject us to enforcement actions, including interest and penalties. The Federal Communications Commission, or FCC,
has jurisdiction over all telecommunication’s common carriers to the extent they provide interstate or international communications
services, including the use of local networks to originate or terminate such services. Each state regulatory commission has jurisdiction
over the same carriers with respect to their provision of local and intrastate communications services. Local governments often indirectly
regulate aspects of our communications business by imposing zoning requirements, taxes, permit or right-of-way procedures or franchise
fees. Significant changes to the applicable laws or regulations imposed by any of these regulators could have a material adverse effect
on our business, operating results and financial condition.

Regulation
of Telecom by the Federal Communications Commission

In
1997, the FCC issued an order, referred to as the Universal Service Order, that requires all telecommunications carriers providing interstate
telecommunications services to contribute to universal service support programs administered by the FCC (known as the Universal Service
Fund). In addition, beginning in October 2006, interconnected VoIP providers, such as our subsidiary net2phone, are required to contribute
to the Universal Service Fund. These periodic contributions are currently assessed based on a percentage of each contributor’s
interstate and international end user telecommunications revenues reported to the FCC. We also contribute to several other regulatory
funds and programs, most notably Telecommunications Relay Service, or TRS, FCC Regulatory Fees, and Local Number Portability (collectively,
the Other Funds). We and most of our competitors pass through Universal Service Fund and Other Funds contributions as part of the price
of our services, either as part of the base rate or, to the extent allowed, as a separate surcharge on customer bills. Due to the manner
in which these contributions are calculated, we cannot be assured that we fully recover from our customers all of our contributions.
In addition, based on the nature of our current business, we receive certain exemptions from Universal Service Fund contributions. Changes
in our business could eliminate our ability to qualify for some or all of these exemptions. As a result, our ability to pursue certain
new business opportunities in the future may be constrained in order to maintain these exemptions, the elimination of which could materially
affect the rates we would need to charge for existing services. Changes in regulation may also have an impact on the availability of
some or all of these exemptions. If even some of these exemptions become unavailable, they could materially increase our Universal Service
Fund or Other Funds’ contributions and have a material adverse effect on the cost of our operations and, therefore, on our ability
to continue to operate profitably, and to develop and grow our business. We cannot be certain of the stability of the contribution factors
for the Other Funds. Significant increases in the contribution factor for the Other Funds in general and the TRS Fund in particular can
impact our profitability. Whether these contribution factors will be stable in the future is unknown, but it is possible that we will
be subject to significant increases.

Regulation
of Telecom by State Public Utility Commissions

Our
telecommunications services that originate and terminate within the same state, including both local and in-state long distance services
are subject to the jurisdiction of that state’s public utility commission, or PUC. The Communications Act of 1934, as amended,
generally pre-empts state statutes and regulations that prevent the provision of competitive services but permits state PUCs to regulate
the rates, terms and conditions of intrastate services, so long as such regulation is not inconsistent with the requirements of federal
law. We are certified to provide facilities-based and/or resold long-distance service in all 50 states and facilities-based and resold
local exchange service in 45 states. In addition to requiring certification, state regulatory authorities may impose tariff and filing
requirements, consumer protection measures, and obligations to contribute to the Universal Service Fund and Other Funds. Rates for intrastate
switched access services, which we both pay to local exchange companies and collect from long-distance companies for terminating in-state
toll calls, are subject to the jurisdiction of the state commissions. State commissions also have jurisdiction to approve negotiated
rates, or establish rates through arbitration, for interconnection, including rates for unbundled network elements. Changes in those
access charges or rates for unbundled network elements could have a substantial and material impact on our business.

16

Regulation
of Telecom—International

In
connection with our international operations, we have obtained licenses or are otherwise authorized to provide telecommunications services
in various foreign countries. We have obtained licenses or authorizations in Argentina, Australia, Belgium, Brazil, Canada, Chile, Denmark,
Germany, Hong Kong, Italy, Japan, Mexico, the Netherlands, Peru, Singapore, South Africa, Spain, Sweden, Switzerland, the United Kingdom,
and Uruguay. In numerous countries where we operate or plan to operate, we are subject to many local laws and regulations that, among
other things, may restrict or limit the ability of telecommunications companies to provide telecommunications services in competition
with state-owned or state-sanctioned dominant carriers.

Regulation
of Internet Telephony

The
use of the Internet and private IP networks to provide voice communications services is generally less regulated than traditional switch-based
telephony within the United States and abroad and, in many markets, is not subject to the imposition of certain taxes and fees that increase
our costs. As a result, we are able, in many markets, to offer VoIP communications services at rates that are more attractive than those
applicable to traditional telephone services. However, in the U.S. and abroad, there have been efforts by legislatures and regulators
to harmonize the regulatory structures between traditional switch-based telephony and VoIP. This could result in additional fees, charges,
taxes, and regulations on IP communications services that could materially increase our costs and may limit or eliminate our competitive
pricing advantages. Additionally, several foreign governments have adopted laws and/or regulations that could restrict or prohibit the
provision of voice communications services over the Internet or private IP networks. These efforts could likewise harm our ability to
offer VoIP communications services.

Money
Transmitter and Payment Instrument Laws and Regulations

Our
consumer payment services offerings include BOSS Money and various network branded, also called “open loop,” prepaid card
offerings. These industries are heavily regulated. Accordingly, we, and the products and services that we market in consumer payment
services, are subject to a variety of federal and state laws and regulations, including:

■
Banking laws and regulations;

■
Money transmitter and payment
instrument laws and regulations;

■
Anti-money laundering laws;

■
Privacy and data security
laws and regulations;

■
Consumer protection laws
and regulations;

■
Unclaimed property laws;
and

■
Card association and network
organization rules.

In
connection with the development of our money transmission services and the expansion of our network branded prepaid card offerings, we
have actively pursued our own money transmitter licenses. At July 31, 2025, we had received a money transmitter license in 48 of the
49 U.S. states that require such a license, as well as in Washington, D.C.

Regulation
of Other Businesses

We
operate other smaller or early-stage initiatives and operations, which may be subject to federal, state, local or foreign law and regulation.

INTELLECTUAL
PROPERTY

We
own numerous patents, trademarks, domain names and other intellectual property rights necessary to conduct our business. We actively
pursue the filing and registration of patents, domain names, trademarks, and service marks to protect our intellectual property rights
within the United States and abroad; in particular our registered trademarks and brands: IDT®, BOSS Revolution®, BOSS Money®,
net2phone® and zendit®. From time to time, we have also acquired or licensed intellectual property relating to present and future
business strategy. We believe that our technological position significantly depends on the technical experience, expertise, and creative
ability of our employees to maintain both our current businesses and pursue future business development. Our corporate policies require
all employees to assign intellectual property rights developed in the scope of, or in relation to our business to us, and to protect
all intellectual property and proprietary information and materials as confidential.

Our
global telecommunications switching and transmission infrastructure enables us to provide an array of telecommunications, internet access
and internet telephony services to our customers worldwide. We rely upon domestic and foreign patents, patent applications, and other
intellectual property rights, regarding our infrastructure and global telecommunication network for our international telecommunications
traffic and the international traffic of other telecommunications companies.

17

EMPLOYEES
AND HUMAN CAPITAL RESOURCES

Attracting
and retaining qualified personnel familiar with our businesses and who lead our different business units and functions is critical to
our success. As of September 1, 2025, we had a total of 1,925 employees, of which 1,915 were full-time employees.

Our
human capital resources’ objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating
our existing and new employees, advisors and consultants. To accomplish that, our compensation practices are designed to attract and
retain qualified and motivated personnel and align their interests with our goals and with the best interests of our stockholders. Our
compensation philosophy is to provide compensation to attract the individuals necessary for our current needs and growth initiatives
and provide them with the proper incentives to motivate those individuals to achieve our long-term plans, which includes among other
things, equity and cash incentive plans that attract, retain and reward personnel through the granting of stock-based and cash-based
compensation awards.

We
believe that talent attraction and retention are critical to our ability to achieve our strategy and that a trained, diverse and inspired
workforce is integral to delivering our objectives. Our recruiting process reaches a wide array of potential employees, and we employ
a rigorous screening process to ensure that we identify and hire quality professionals.

We
are committed to a policy of non-discriminatory treatment and respect of human rights for all current and prospective employees. We do
not permit discrimination based on an individual’s race, religion, creed, color, sex, sexual orientation, age, marital status,
disability, national origin or veteran’s status, which is illegal in many jurisdictions. We respect the human rights of all employees
and strive to treat them with dignity consistent with standards and practices recognized by the international community.