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Equity Investments

3 Months Ended

Oct. 31, 2025

Cash and Cash Equivalents [Abstract]

Note 7—Equity Investments

Equity investments consist of the following:

Schedule of Equity Investments

	October 31, 2025		July 31, 2025
	(in thousands)
Zedge, Inc. Class B common stock, 42,282 shares at October 31, 2025 and July 31, 2025	$	107	$	170
Rafael Holdings, Inc. Class B common stock, 446,932 shares at October 31, 2025 and July 31, 2025		608		755
Other marketable equity securities		134		146
Fixed income mutual funds		4,695		4,566

Current equity investments	$	5,544	$	5,637

Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”)	$	381	$	902
Convertible preferred stock—equity method investment		—		—
Hedge funds		3,044		3,031
Other		1,225		2,725

Noncurrent equity investments	$	4,650	$	6,658

Howard Jonas, the Chairman of the Company and the Chairman of the Company’s Board of Directors is also the Vice-Chairman of the Board of Directors of Zedge, Inc. (“Zedge”) and the Chairman of the Board of Directors, Executive Chairman, Chief Executive Officer and President of Rafael Holdings, Inc. (“Rafael”).

In June 2025, pursuant to a Rafael rights offering, the Company purchased 168,122 shares of Rafael Class B common stock for an aggregate of $0.2 million.

In June 2016, upon the acquisition of Visa Europe Limited by Visa, Inc. (“Visa”), IDT Financial Services received 1,830 shares of Visa Series C Preferred among other consideration. In July 2024, in connection with Visa’s mandatory release assessment, the Company received 33 shares of Visa’s Series A Preferred. In August 2024, the 33 shares of Visa Series A Preferred were converted into 3,300 shares of Visa Class A common stock, which the Company sold for $0.9 million.

The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

	2025			2024
	Three Months Ended October 31,
	2025			2024
	(in thousands)
Balance, beginning of period	$	1,171		$	964
Adjustment for observable transactions involving a similar investment from the same issuer		(521	)		63

Balance, end of the period	$	650		$	1,027

The Company adjusted the carrying value of the shares of Visa Series C Preferred it held based on the fair value of Visa Class A common stock, including a discount for lack of current marketability, which is classified as “Adjustment for observable transactions involving a similar investment from the same issuer” in the table above. The Certificate of Designation with respect to the shares of Visa Series C Preferred restricts the transferability of the shares, there is no public market for the shares, and none is expected to develop. The shares become fully convertible into shares of Visa Class A common stock in June 2028.

Unrealized gains (losses) for all equity investments measured at fair value included the following:

	2025			2024
	Three Months Ended October 31,
	2025			2024
	(in thousands)
Net (losses) gains recognized during the period on equity investments	$	(269	)	$	378
Plus: net loss recognized during the period on equity investment sold during the period		—			2

Unrealized (losses) gains recognized during the period on equity investments still held at the reporting date	$	(269	)	$	380

The unrealized gains and losses for all equity investments measured at fair value in the table above included the following:

	2025			2024
	Three Months Ended October 31,
	2025			2024
	(in thousands)
Unrealized (losses) gains recognized during the period on equity investments:

Rafael Class B common stock	$	(147	)	$	100

Zedge Class B common stock	$	(63	)	$	(23	)
Equity securities unrealized gain loss	$	(63	)	$	(23	)

Equity Method Investment

The Company has an investment in shares of convertible preferred stock of a communications company (the equity method investee, or “EMI”). As of both October 31, 2025 and July 31, 2025, the Company’s ownership was 33.4% of the EMI’s outstanding shares on an as converted basis. The Company accounts for this investment using the equity method since the Company can exercise significant influence over the operating and financial policies of the EMI but does not have a controlling interest.

The Company determined that on the dates of the acquisitions of the EMI’s shares, there were differences between its investment in the EMI and its proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to the Company’s interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. In the accompanying condensed consolidated statements of income, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other expense, net” (see Note 17).

In the three months ended October 31, 2025, no additional shares of the EMI’s convertible preferred stock were purchased. In the three months ended October 31, 2024, each of the EMI’s shareholders, including the Company, purchased additional shares of the EMI’s convertible preferred stock.

The following table summarizes the change in the balance of the Company’s equity method investment:

	2025			2024
	Three Months Ended October 31,
	2025			2024
	(in thousands)
Balance, beginning of period	$	(397	)	$	1,338
Purchase of convertible preferred stock		—			673
Equity in the net loss of investee		(64	)		(438	)
Amortization of equity method basis difference		(343	)		(342	)

Balance, end of period	$	(804	)	$	1,231

In February 2025, the Company entered into a loan agreement with the EMI for providing the EMI with a revolving credit facility. The aggregate principal amount available under the facility is $2.0 million. The loans will incur interest at 12% per annum payable semiannually and are due and payable in February 2027. In February 2025, the Company loaned the EMI $0.5 million under the revolving credit facility. In May 2025, the Company loaned the EMI an additional $0.4 million for an aggregate of $1.9 million under the revolving credit facility.