IDT CORP Stock Compensation Disclosure

Note 20—Stock-Based Compensation

 

2024 Equity Incentive Plan

 

The 2024 Equity Incentive Plan is intended to provide incentives to officers, employees, directors, and consultants of the Company, including stock options, stock appreciation rights, DSUs, and restricted stock. At July 31, 2025, the Company had 250,000 shares of Class B common stock reserved for the grant of awards under the 2024 Equity Incentive Plan, and 23,934 shares were available for future grants. In September 2025, the Company’s Board of Director’s approved an amendment to the Company’s 2024 Equity Incentive Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 175,000 shares, subject to approval by the Company’s stockholders at its annual meeting in December 2025.

 

Stock Options

 

Option awards are generally granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Option awards generally vest on a graded basis over three years of service and have ten-year contractual terms. No option awards were granted in fiscal 2024 or fiscal 2023. The fair value of stock options granted in fiscal 2025 was estimated on the date of the grant using a Black-Scholes valuation model and the assumptions in the following table. Expected volatility is based on historical volatility of the Company’s Class B common stock and other factors. The Company uses historical data on exercise of stock options, post vesting forfeitures and other factors to estimate the expected term of the stock options. The risk free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

Schedule of Stock Options Valuation Assumptions 

Year ended July 31, 2025
ASSUMPTIONS
Average risk-free interest rate			3.49	%
Expected dividend yield			0.5	%
Expected volatility			53.2	%
Expected term			4.0 years
Weighted-average grant date fair value		$	16.58

 

A summary of stock option activity for the Company is as follows:

Schedule of Stock Option Activity 

		Number of Options (in thousands)				Weighted- Average Exercise Price				Weighted- Average Remaining Contractual Term (in years)				Aggregate Intrinsic Value (in thousands)
Outstanding at July 31, 2024			—			$	—
Granted			36				38.43
Exercised			—				—
Cancelled / Forfeited			—				—
OUTSTANDING AT JULY 31, 2025			36			$	38.43				4.2			$	741
EXERCISABLE AT JULY 31, 2025			—			$	—				0—			$	—

 

In fiscal 2025, fiscal 2024, and fiscal 2023, the Company received cash from the exercise of stock options of nil, $0.2 million, and $0.2 million, respectively, for which the Company issued nil; 12,500; and 12,500 shares, respectively, of its Class B common stock.

 

 

The total intrinsic value of options exercised during fiscal 2025, fiscal 2024, and fiscal 2023 was nil, $0.1 million, and $0.2 million, respectively. At July 31, 2025, there was $0.4 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 1.2 years.

 

Restricted Stock

 

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.

 

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

Schedule of Grants of Restricted Shares 

		Number of Non-vested Shares (in thousands)				Weighted- Average Grant- Date Fair Value
Non-vested restricted shares at July 31, 2024			31			$	21.50
Granted			5				36.13
Vested			(29	)			22.99
Forfeited			—				—
NON-VESTED RESTRICTED SHARES AT JULY 31, 2025			7				25.54

 

At July 31, 2025, there was $0.1 million of total unrecognized compensation cost related to non-vested restricted shares, which is expected to be recognized over a weighted-average period of 0.8 years. The total grant date fair value of shares vested in fiscal 2025, fiscal 2024, and fiscal 2023 was $0.7 million, $0.7 million, and $0.5 million, respectively.

 

Deferred Stock Units Equity Incentive Programs

 

The Company has an equity incentive program in the form of grants of DSUs that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. The number of shares issuable on each vesting date varies between 50% to 200% of the number of DSUs that vested on that vesting date, depending on the market price for the underlying Class B common stock on the vesting date relative to the base price approved by the Compensation Committee of the Company’s Board of Directors, which is based on the market price at the time of the grants. In fiscal 2025, fiscal 2024, and fiscal 2023, in accordance with the program and based on certain elections made by grantees, the Company issued 276,960; 55,039; and 43,278 shares, respectively, of its Class B common stock for vested DSUs. The Company estimated that the fair value of the DSUs on the date of grants was an aggregate of $0.8 million, $0.8 million, and $5.4 million in fiscal 2025, fiscal 2024, and fiscal 2023, respectively, which is being recognized on a graded vesting basis over the requisite service periods. The Company uses a risk neutral Monte Carlo simulation method in its valuation of the DSUs, which simulates the range of possible future values of the Company’s Class B common stock over the life of the DSUs.

 

A summary of the status of the Company’s grants of DSUs is presented below:

Schedule of Grants of Restricted Shares 

		Number of Non-vested DSUs (in thousands)				Weighted- Average Grant- Date Fair Value
Non-vested DSUs at July 31, 2024			148			$	28.79
Granted			19				44.58
Vested			(148	)			28.98
Forfeited			(1	)			29.22
NON-VESTED DSUs AT JULY 31, 2025			18			$	43.64

 

At July 31, 2025, there was $0.4 million of total unrecognized compensation cost related to non-vested DSUs, which is expected to be recognized over a weighted-average period of 0.9 years. The total grant date fair value of DSUs vested in fiscal 2025, fiscal 2024, and fiscal 2023 was $4.3 million, $1.1 million, and $0.9 million, respectively.

 

On September 18, 2025, the Company adopted the IDT 2025 Equity Growth Program (under its 2024 Equity Incentive Plan) in the form of grants of DSUs that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. On September 18, 2025, the Company granted 108,500 DSUs to certain of its executive officers and other employees. Subject to continued full time employment or other service to the Company, the DSUs will be eligible to vest in three substantially equal amounts on each of February 17, 2026, February 16, 2027, and February 15, 2028. The number of shares that will be issuable on each vesting date will vary between 50% to 267% of the number of DSUs that vest on that vesting date, depending on the market price for the underlying Class B common stock on the vesting date relative to the grant price of $50.90 per share (the price that was approved by the Compensation Committee of the Company’s Board of Directors). For certain executive officers of the Company, the number of shares that will be issuable on each vesting date will vary between 50% to 400% of the number of DSUs that vest on that vesting date. In addition, the grantee will have the option to elect a later vesting date no later than January 19, 2026 for the February 17, 2026 vesting date, and no later than January 18, 2027 for the February 16, 2027 vesting date. A grantee will have the option to elect a later vesting date for one-half or all of the DSUs scheduled to vest on the then upcoming vesting date and any DSUs that do not vest based on the grantee’s election will be eligible to vest on the subsequent scheduled vesting date. The Company is currently in the process of determining the estimated fair value of these grants, which will be recognized in compensation expense over the respective vesting periods.

 

 

Amended and Restated Employment Agreement with Abilio (“Bill”) Pereira

 

On December 21, 2023, the Company entered into an Amended and Restated Employment Agreement with Bill Pereira, the Company’s President and Chief Operating Officer. The agreement provides for, among other things, certain equity grants, including 23,500 DSUs that, upon vesting, represent the right to receive shares of the Company’s Class B common stock, and 50,000 shares of Class B common stock of net2phone 2.0, as well as a contingent bonus subject to the completion of certain financial milestones as set forth in the agreement. In fiscal 2024, two of these milestones were achieved, for which the Company issued to Mr. Pereira 39,155 shares of its Class B common stock in fiscal 2024 with an issue date value of $1.5 million, and 39,155 shares of its Class B common stock in fiscal 2025 with an issue date value of $1.8 million. In addition, in fiscal 2025, the Company accrued $1.0 million in connection with the achievement of an additional milestone. In fiscal 2024, the Company accrued aggregate stock-based compensation expense of $4.1 million related to these equity grants and the contingent bonus, which is included in “Selling, general and administrative expense” in the accompanying consolidated statements of income.

 

Stock Issued to an Employee

 

In fiscal 2023, the Company granted 15,000 shares of its Class B common stock to an employee. The Company recorded stock-based compensation expense and an increase in “Additional paid-in capital” of $0.4 million for this grant, which was the fair value of the shares on the grant date.

 

NRS Restricted Common Stock

 

Effective as of June 30, 2022, restricted shares of NRS’ Class B common stock representing 1.2% of its outstanding capital stock on a fully diluted basis were granted to certain NRS employees. The restrictions on the shares will lapse in three installments, the first was on June 1, 2024, and the others are June 1, 2026, and June 1, 2027. The estimated fair value of the restricted shares on the grant date was $3.3 million, which is being recognized over the vesting period. At 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.

 

In connection with the vesting of the restricted shares of NRS Class B common stock on June 1, 2024, the Company 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. The fair value per share of the NRS Class B common stock was based on a valuation of the total equity of NRS using a market approach and income approach. The Company recorded a decrease in “Noncontrolling interests” of $21,000 and a decrease in “Additional paid-in capital” of $0.6 million, and an offsetting income tax withholding liability of $0.6 million.

 

net2phone 2.0, Inc. Restricted Common Stock

 

On December 31, 2020, a compensatory arrangement with each of Howard S. Jonas and Shmuel Jonas, the Company’s Chief Executive Officer, was finalized. Howard S. Jonas and Shmuel Jonas each received 0.5 million restricted shares of net2phone 2.0’s Class B common stock, which represented an aggregate of 10% of net2phone 2.0’s issued and outstanding common stock at the time of the grant. The shares entitle each grantee to proceeds only on a sale, spin-off, initial public offering, or other monetization of net2phone 2.0 and have protection from dilution for the first $15 million invested in net2phone 2.0 following the grant. In January 2024, the restrictions lapsed on these restricted shares. In addition, in January 2024, Bill Pereira was granted 50,000 shares of net2phone 2.0 Class B common stock in connection with the agreement described above. The Company 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. The fair value per share of the net2phone 2.0 Class B common stock was based on a valuation of the business enterprise using a market approach and income approach. The Company recorded an increase in “Noncontrolling interests” of $53,000 and a decrease in “Additional paid-in capital” of $3.6 million, and an offsetting income tax withholding liability of $3.6 million.