Note 21—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, 2026, the Company had 425,000 shares of Class B common stock reserved for the grant of awards under the 2024 Equity Incentive Plan, and 162,920 shares were available for future grants. On September 22, 2026, the Company's Board of Directors approved an amendment to the plan to increase the number of shares of the Company's Class B common stock available for future grant by 75,000 shares, subject to approval by the Company's stockholders at the Annual Meeting of Stockholders scheduled for December 10, 2026.

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 2026 or fiscal 2024. 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. Expected dividends are based on the Company's dividend policy at the time of grant. 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. 

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

In fiscal 2026, fiscal 2025, and fiscal 2024, the Company received cash from the exercise of stock options of $0.2 million, nil, and $0.2 million, respectively, for which the Company issued 5,204 shares, nil, and 12,500 shares, respectively, of its Class B common stock.

The total intrinsic value of options exercised during fiscal 2026, fiscal 2025, and fiscal 2024 was $0.1 million, nil, and $0.1 million, respectively. At  July 31, 2026, there was $0.2 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 0.7 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:

At  July 31, 2026, there was $0.3 million of total unrecognized compensation cost related to non-vested restricted shares, which is expected to be recognized over a weighted-average period of 0.7 years. The total grant date fair value of shares vested in fiscal 2026, fiscal 2025, and fiscal 2024 was $0.3 million, $0.7 million, and $0.7 million, respectively.

2022 Equity Growth Program 

On November 30, 2022, the Company adopted the IDT 2022 Equity Growth Program in the form of grants of DSUs that, upon vesting, entitled the grantees to receive shares of the Company’s Class B common stock. The number of shares issuable on each vesting date varied between 50% to 200% of the number of DSUs vesting on that date, depending on the market price for the underlying Class B common stock on the vesting date relative to the base price of $25.45 per share approved by the Compensation Committee of the Company’s Board of Directors, based on the market price of the Class B common stock at the time of the grants. In fiscal 2025 and fiscal 2024, in accordance with the program and based on elections made by grantees, the Company issued 276,960 and 55,039 shares, respectively, of its Class B common stock for vested DSUs. No shares were issued under this program in fiscal 2026. The Company estimated that the fair value of the DSUs on the date of grants was $5.4 million which was recognized on a graded vesting basis over the requisite service periods. The Company used a risk-neutral Monte Carlo simulation method to value the DSUs, simulating the range of possible future values of the Company’s Class B common stock over the life of the DSUs. With the final vesting in February 2025, the 2022 Equity Growth Program has been completed, and no DSUs remain outstanding thereunder.

2025 Equity Growth Program

On September 18, 2025, the Company adopted the IDT 2025 Equity Growth Program under its 2024 Equity Incentive Plan, pursuant to which it granted 109,975 DSUs to certain executive officers, employees, and consultants. Upon vesting, the DSUs entitle grantees to receive shares of the Company's Class B common stock. The DSUs vest in three substantially equal installments on February 17, 2026, February 16, 2027, and February 15, 2028, subject to continued service. The number of shares issuable on each vesting date varies based on the market price of the Class B common stock on the vesting date relative to the grant price of $50.90 per share, ranging from 50% to 267% of the DSUs vesting on that date, and up to 400% for certain executive officers. Grantees may elect to defer vesting of some or all of their DSUs to the next scheduled vesting date. 

In February 2026, the first vesting date under the program, the Company issued 26,681 shares of its Class B common stock in respect of DSUs that vested on February 17, 2026, based on elections made by grantees. To satisfy statutory tax withholding obligations, the Company withheld 10,852 shares and remitted the equivalent cash to the applicable tax authorities, recording the withheld shares as treasury stock. The Company estimated the aggregate grant-date fair value of the DSUs at $13.3 million, which is being recognized on a graded vesting basis over the requisite service periods ending in February 2028. The Company used a risk-neutral Monte Carlo simulation method to value the DSUs, simulating the range of possible future values of the Class B common stock over the life of the DSU. 

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

At  July 31, 2026, there was $5.9 million of total unrecognized compensation cost related to non-vested DSUs, which is expected to be recognized over a weighted-average period of 0.7 years. The total grant date fair value of DSUs vested in fiscal 2026, fiscal 2025, and fiscal 2024 was $1.6 million, $4.3 million, and $1.1 million, respectively.

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 the scheduled 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.

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 lapse in three installments, the first was in June 2024, and the others were scheduled to vest in June 2026, and June 2027 (see “Exchange of NRS Restricted Common Stock for IDT DSUs” below). The estimated fair value of the restricted shares on the grant date was $3.3 million, which is recognized over the vesting period.

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.

Exchange of NRS Restricted Common Stock for IDT DSUs

On January 21, 2026, the Company exchanged unvested shares of NRS Restricted Common Stock, representing approximately 0.71% of NRS on a fully diluted basis and 0.73% on an outstanding basis, held by certain employees for an aggregate of 72,182 DSUs of the Company. The DSUs are subject to the same terms and conditions as DSUs previously issued under the Company’s 2025 Equity Growth Program and vest in three substantially equal tranches, the first of which was in February 2026, and the others of which are in February 2027, and February 2028.

The transaction was accounted for as a modification under ASC 718, Compensation — Stock Compensation. The fair value of the DSUs granted was estimated at approximately $4.2 million, resulting in incremental compensation cost of approximately $0.6 million.

net2phone 2.0, Inc. Restricted Common Stock

On December 31, 2020, the Company finalized compensatory arrangements with Howard Jonas, the Company's Chairman of the Board of Directors and Shmuel Jonas, the Company’s Chief Executive Officer, pursuant to which each received 500,000 restricted shares of net2phone 2.0’s Class B common stock, representing 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 include anti-dilution protection with respect to the first $15 million invested in net2phone 2.0 following the grant. In January 2024, the restrictions on these shares lapsed. Concurrently, Bill Pereira was granted 50,000 shares of net2phone 2.0 Class B common stock pursuant to his employment agreement described above. In connection with the lapsing of restrictions and the share grant, the Company repurchased an aggregate of 4.5% of net2phone 2.0's outstanding shares, with an aggregate fair value of $3.6 million to satisfy the grantees' tax withholding obligations. The fair value per share was determined based on a valuation of net2phone 2.0 using both a market approach and an income approach. As a result, in January 2024, the Company recorded an increase in "Noncontrolling interests" of $53,000, a decrease in "Additional paid-in capital" of $3.6 million, and a corresponding income tax withholding liability of $3.6 million.