USAT - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. And welcome to the USA Technologies Third Quarter Fiscal Year 2018 Earnings Call. Currently at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] Also as a reminder, this conference call is being recorded. to Investor call Relations like host, to now Gould, Monica for would turn over the your I USA Technologies. ahead. go Please

Monica Gould

Thank the Financial Chief call Executive everyone. Officer. morning, morning is Third Earnings and and Chairman the this Call. Steven, and Herbert, Conference on Technologies' XXXX Quarter Priyanka Welcome me With Officer Steve USA Fiscal you to good Singh, Chief

of which undue could and call, cause forward-looking from those market, contemplated the place such that as release whether of call, begin the of by today's the forward-looking differ reflect view made. not other income I believe are otherwise. not discussion business, financial morning. morning, detailed reliance facts, statements any such to a materially issued financial the statements the in certain filings from well evaluating all and but factors, financial, other of included events, and limited measures risks press the release A for, be measures non-GAAP call non-GAAP we to to, comparable useful non-GAAP could you as statements www.usatech.com. over Listeners obligation including, statements a found update measures future and result would included supplemental been that not in as the conditions. of differ can also or financial GAAP Before of which issued any USA economic like in of posted measures substitute net of such our or our to of This website, the with measures they has financial presentation are are remind to and measures, loss. Relations forward-looking with information, GAAP Steve for and call the press non-GAAP our a Investor this GAAP Details only forward-looking as reconciliation results. and date SEC to this actual statements uncertainties to in than comparable a results most nature. Steve? this measures undertakes things, historical these I’d these as is section events we operating that, These are like Actual Technologies' turn With forward-looking management's Herbert. new result financial between most earlier among results on USA certain cautioned no financial as discussion will statements, Technologies that include the directly to on materially are

Steve Herbert

and share going you quarter highlights. to quarter Monica, start Priyanka Systems. results CFO Singh, you, good in Thank some integrating of financial results. morning, detail. and a Thank everyone. for to my I guidance XXXX third year of call on I'll in provide the you am turn brief After our I'll progress updating us our our discuss and our acquisition to more by joining our overview business Cantaloupe fiscal recent then our remarks, the of over to discuss

substantially progress execution acquisition, effectively margin the within major L&T integration significant our enterprise. Cantaloupe made marketplace. to offering expanded in the last profile organization. the on combined we the our Over integrating service and our Based Since all our were functions by completed work months, the closing we've in of personnel six successful leveraging improve able into and of the we swiftly

put target that that we the we long-term to As such in revenue margin all than quarter I exceeded am six months of less place pleased the ago. during announce third

market. equipment margins margins to range of XX% XX% planning of margins in Consistent XX%, and an have inventory for platform of set and target cashless payment more. Specifically industry unattended of to the of the with enterprise requirement leading we margins logistics, retail our in for the of X% gross total compared earlier equipment third XX%, platform scalable XX%. the XX% the margins of year, achieved margin in to we long-term now L&T we L&T our quarter This gross XX% forth vision and to supports fiscal XX%, customers'

Our micro addresses kiosk Seed market the platform services QuickConnect markets through segment seed Delivery. vending and to also and our module, through coffee office

can and platform Connect our All solution sticky. of versatile be ePort these end both makes our markets on which managed

our ePort cross cashless cloud optimization scalability, and from USA the maximize into Connect sign the our Connect payment base. software driving efficiency, our base. in multiple to quarter, new rapidly are customer into the platform add their potential add based to operational performance elements for customers' In analytic we software offering. of third Key We seeing to services to we market they've with the very new key achieve analytic our continue leading factors our our customers new pleased success decision Moreover, selling made to agreements end-to-end existing platform. combined achieve ePort improve our in existing are we already adopt cloud investment continue

was previously Seed and XXX% Seed cross-sell on Office our ePort cashless of during to the in vending U.S. platform. Connect transitioned our for purchased Pro logistics entire suite the analytic quarter, quarter software operator the customer Midwest allow seed leverage seed well a with in Our platform this VMS replacing replacing will retail, optimization for In a largest solution, including a who solution. USAT's our entirely to third enterprise legacy or deliveries unattended implementation smartphone fully as This solution and markets VMS which automates market competitor's this a delivery customer a micro end-to-end had tablet. as competitor's with

Importantly, expand enabled to our opportunity some us also cross presence. opportunities of international selling our

gained recall, America acquisition. Latin footprint the may As Australia international via and small Cantaloupe we a in you

in for a additional locations with solution We payment are EMV potential X,XXX enabled approximately partner over to deliver working Australia with time. locations the an for

XXst Office, Again competitor Seed Delivery business new nearlyX, franchise of revenue a enabled that a to Seed Seed combined recap With won seed of enterprise marking consecutive Canada a quarter third EMV in increased the end-to-end briefly Pro, like growth. deployment markets. our XX% some I'd locations. also performance. canteen on including GAAP our our solution year-over-year our for year-over-year We with quarter of and services XXX Revenue platform cashless basis, with displacing across

add Given successful converting scale continuing quarter Connect customers as as the These our new to connections XXX leverage the by service. new increased non-GAAP were connections, this growth addition continue of expanded well services and we in both base improving to our on revenue and customer count to in our expenses, to we connections quarters quarter operating the Net bringing We connection total customers our XXX,XXXor over our XX,XXX our world. profitability. And the with customer XX,XXX new to NFC new XXX,XXX. mobile will maintain existing expansion ePort that connections payments our continue are during and Over States to based years. largest sixty-seven if rose coming controlled by a not now by United margin accepts the NFC and revenue total our drive footprint bringing in total of the to will the single % enabled. entity count

continues to the XXX increasing million We an be service during million at approximately quarter. by consumers utilized transactions $XXX Our value rate. for in processed over

share in annual in same XXXX, calendar a domestically us third firm a billion IoT cashless As unattended exited transaction for market in position to the momentum the Insight. This end namely our published to retail inflection at the is by expand Moreover, approximately and Berg point study connected to our of enabled number-one solutions pace $X.X we markets machines. quarter according in This run research on achieve the end an cloud-based rate market globally solidify a reflecting technology processing. vending further we're result, and seeing of April healthy in our market. the continue adoption largest

market important For in XX.X% XXXX XXXX. from example, expected to for And to is million service kiosks a our % which represents healthy for XXXX, $X by growth substantial Berg. the market US projected another continues units Moreover, globally base installed to machines food to the led vending pace. according expand According X.X by check-in us of and reach of million global an at is X.X billion self-serve the achieve XX to grow kiosks, self-serve a at to penetration beverage kiosk a opportunity kiosk. kegger the connected by payments.com, vertical kiosk company

in quarter QuickConnect which XX% markets more predominantly of market, connections on the are drove kiosk by our our As success service compared than to our in this this third of micro same year. the example an we in grew based Growth much recent last increase.

technology to unattended both our proliferate abroad. retail share and the positioned completion power of both additional expansion Ingenico here unattended of benefit Now from merchants organizations and capture announced other I'd to recent three-year through with relationship a turn strategic with our of business like to We alliance believe recently some well enter the IOT help of We highlights. verticals and our collaboration agreement. new market the are

strategy working and teams go on Our respective a opportunities. comprehensive actively training market company's each organizations sales are together now on to broad

updates executive payroll like network. security things, deduct. programs layer opportunities. among and to Ingenico's USAT's payment hardware consumer this cashless settings, ability and retail companies we with option software Connect unattended working retail combined of partnership, services unattended on With markets Ingenico cashless new vending a services. provide and payment hardware the Connect we're our the ePort Connect can value-added insight loyalty that automatic in America. other And innovative through also USAT's data of to combined payment the cashless and access of both offering expanded and engagement launch can point-of-sale to suite service. gain payment other expedite using accept loyalty Through addition ePort on ePort focus have payment. offer best-in-class to emerging services consumer near-term In with Along and this operators able solutions forms payment, solution We're via North high-priority of to also Merchants engagement,

end-to-end from cost and discussions third educating the share technology completed businesses and and country, across we offered, and decreasing increase had operating summits to while Cantaloupe the best their focused how which presented during cross-training services USAT to can peers. efficiencies, stories both very help to customers USA discuss three the about platform, discuss Lastly our were we education practices, In revenue enterprise their in customers the an both panel on new on the on them have audience Cantaloupe our addition participated we in well-attended success quarter, of and impact technology roadmap

Amazon.gov. our accelerating industry as In the is We partners are payments is disruptive also from new, unattended the consumer we new leveraging retail Apple such transactions, across to unattended including wallet options had more the as mobile as headed self-service closing, crossing driven shock growing mark. of a approaching where us We're a particularly is company that many continued into shift year experiences volume XXX,XXX momentum to with consumer perspective, just to pursue markets, and pleased the very provide rising opportunities by for our how connection tide X existing of both shopping well service. retail pleased several the the unattended and digital glimpse for payment and technologies to milestone advancements. million milestone increased trends quickly our giving business after that It's we're of trends and the a historic new strategic including demand ahead one the rise

Looking seeing the retail we're now detailed point forward, call Priyanka? adoption trends. take provide markets results. financial across we Priyanka and turn inflection cashless more to unattended a presence advantage our I'll overview to intend these expand that a technology result of to in solutions, our of as of the cloud-based to of With the

Priyanka Singh

which pleased of thanks records Cantaloupe. quarter strength at quarter grew results, in and results. execution to time Steve progress in to our with while the is our you, I'm to model evident third particularly the for Total consistency our enabled The revenue and deliver million. ongoing considerable making third $XX.X Thank joining call. financial business XX% integrating same has everyone further us

a generated in leverage our we EBITDA our an profile operating synergies. opportunity almost successfully to scale. companies cost benefited as points and executed as achieve We expansion to We've from basis anticipated also margin two increase growing adjusted also we margins integrate further significant in XXX due the

software favorably which added quarter margins software by equipment to the also %, higher At margin XX a profile. by impacted our of gross the mix L&T margins expansion acquisition XXX than also Gross revenue recurring of this lower expanded benefit our were driven margins and are revenue. margins expanding. best high % mix Cantaloupe revenue. This quarter Cantaloupe reflecting accretive points basis more our This from is by XX

recurring contracts visible customer customers. value progress. revenue control long-term with provide With stronger full we a combined generating us our diversified also tactical highly our relationships high and the margin Our We're stack offerings offering, and making creating technology more with streams.

Cantaloupe and now suite of is the force sales actively combined full products. USAT Our selling

Our of they at the technology we is this the the evident potential customers' for and us. new combined ahead testament lie a the of reaction is most recognized us. exciting that recent organization of It part that was summits believe opportunities our

Technologies' like we Now for growth continue full and to results quarter as while We would XXXX. I the briefly remainder outlook our our of third to expanding strong review had profitability. top-line drive USA the quarter another

Our total increased XX% year-over-year million. revenue $XX.X to

per non-GAAP increased license XX% total XX%. and Our a share. income transaction On revenues net to doubles increased fees $X.XX forma basis, and pro

connection last connections, We continue growing And compared count expanding our as of within our in connection added new in the year. of and the goal. one distance million up bringing count, to XX,XXX base third XXX,XXX to striking quarter same make suite customer total customer We a connection well XX% quarter to base. connections our strides our an net services diversified to as

new and quarter quarter XX% XX,XXX in in XXX the to XX,XXX, a an added last of year. also the same at customers increase of compared We total of

towards sales With were base, XX% new $X.X the large of $XX a same and quarter X% customer our by our year-over-year decreased decrease year-over-year. This the for the total connections to accounted growing revenues. year. million XX% last customers customer of to a the sale equipment which existing for fees driven was transaction XX% increased License of made gross and end accounted quarter. Equipment million strategic in

have to to enabler equipment customers. us in an stated to be As end past, we the high continues margin deliver services our helping

the of services in on sold variability In revenue quarter. in depending continue equipment to a given experience mix addition, quarter-over-quarter we

equipment sales our to no Cantaloupe's example, quarter selling equipment customer cashless the a or a telemetry lighter as required base. configuration combined third all, existing For of our we were portion at of in during were only equipment offering it up higher successful L&T while for readers equipment since units still These resulted revenue, revenues, for the these cashless future. software in only revenue lower margins margin and resulted synergistic sales additional however, incremental higher maintaining needed in driving

Another equipment the factor quarter was continued in kiosk revenue the in growth third impacting our space.

additions our compared XX% by in this which to the additions trends and As QuickConnect enabler gross grow drives newer made trend sales this Steve grown any we gross this last an same favorably in these as all without our we almost just year. have essential equipment be quarter conversion service to period to not margins in With our mentioned, continuing we additional in, the by cashless is in expect verticals evident to be margin impacted quarter. equipment

sale However, and we as in variability expect the depending past, quarter-over-quarter do whether unit margins in revenue the our or on hardware a requires not. equipment

Now turning to margin.

year. margins XX.X%, margin point XXX is gross XX% compared expansions last L&T which Our USAT's basis an standalone almost this quarter of to was

margin As just gross we I ago. set our earlier, to we which targets noted XX% of long-term have months six XX% exceeded

additional our to expand the expect margins successfully services we We L&T pipeline. to continue drive as down

XX.X% to was Our last compared year. XX.X% equipment margin

of doubled $X.X expansion for million, XXX our almost the high We in EBITDA remainder the than of control, margin EBITDA continue the the strength continued and our reflecting XXXX. digits our mid points basis full discipline regenerated cost more surrounding achievement as be impact to adjusted to of acquisition. expect scalability in as revenue around adjusted the equipment to the single business, composition our and of of well margin, synergies expense our At the

XX.X or % for Now $X.X the were of expenses quarter moving million, SG&A to third expenses. revenue.

increase an expenses year-over-year increase marketing as Cantaloupe in share. we to continue to as expenses, market due our expenses SG&A and Our as sales increase related well

trends third We similar SG&A expenses to quarter. seen to in be the quarter in the the expect fourth

by variability trends. the percentage expect will also revenue equipment We as a that revenue driven of experience SG&A

compared $X reduction XXX Based the basis realized of already points year. percentage this SG&A announced a on we quarter annualized have of However, the we cost that of $X.X second million this cost L&T actions revenue as to decrease measures. reduction quarter implemented, million have the

range. is expenses total Our a to revenue XX% the SG&A percentage decrease long-term target to as XX% of to

the on hardware be will quarter. achieved variability the within there However, depending sales

$X.XX Our $X.XX last to year. share last was per was compared million net $X.X $X.X million million per or to adjusted year. income Non-GAAP compared operating share, $X.X or income million $X

the expected a in of This resulting quarter we a rate change tax expected driven recognized M&A from $X.X by change overall expenses. our million tax in benefit

sheet. end balance the end third at last quarter, of $XX.X fiscal year. the up million at Net capital to the of from $X.X Turning working totaled million the

Our with L&T integration of cash a year. balance company's with at and the very expanding the are end third of pleased was from and of improving Cantaloupe million quarter $X.X the up the we our our end $XX.X fiscal profitability. revenues, million, our continued margins Overall, momentum enjoying successful last

existing from there and our customers growth offerings We combined expand to well ahead are with well. and on as continue to recurring streams of derive footprint connections revenue able as compelling through positions new We deeper models of scalable financial penetration customers the increases our capitalize we're to without believe opportunities us.

outlook. our to Turning

we six sales, be Now life year $XXX into $XXX our to full are to of strategy equipment fiscal we million. in expect to in integration regarding XXXX [Indiscernible] of now respect additionally our with that the range months and million the revenue

the and However, to expanding our EBITDA between L&T and million. associated million are raising revenue our performance, adjusted margins with and we $XX be $XX.X QX

believe to million. will connections the range million of to that end from X.XX our X.XX fiscal We continue XXXX total at

in fiscal turn financial any our the This you. and We the continue to XXXX Thank purchase one-time now transaction transactions back Steve. integration be Cantaloupe call also I concludes expect adjustments. to accounting net will update. accretive and expenses will of

Steve Herbert

I Priyanka move Q&A. believe will very thank much. you we to now operator

Operator

of question Blair. Bob from Napoli comes first Our Instructions] [Operator William

Your question please.

Bob Napoli

morning. and Priyanka. and job, you Thank Steve Nice good

a up same just mentioned significant Is question or last along in contract back the that that of year. to specific a their in on ramp that the agreement calendar are will segment they on together you is XXXX? unattended just guys deal that rolling out the referring they half the First Ingenico signed call week partnership,

Steve Herbert

use We referring certain but alliance. they believe to were they a fairly this didn't we're were referring to name three-year strategic us--they same

Bob Napoli

the and large or cross that numbers is Midwest over still come? And the in the that you next already Has that into Okay. sell rolled made. rolling to

Steve Herbert

I think to still that's come.

Priyanka Singh

Still to come, Bob.

Steve Herbert

some They to work do. Yes. have

to there'll and particularly believing of comment margin directly to forth be So Priyanka's continued a that's which that still numbers on L&T. the us so expansion about come points

Priyanka Singh

right. That's

Bob Napoli

that, financial just guess to about updating relates as you it you --are targets? I guys thinking are your

Priyanka Singh

guidance we as call. XXXX Definitely, Bob. that of will end question, good QX a provide the enter earnings our into fiscal That's towards we

look that long-term and in guidance of given had updating our definitely will measures at most all We meeting the already. success we've them

Bob Napoli

Great and I mean guess the saves cost integration in then just the on I Cantaloupe; quarter. had the are a current small --you amount

of I get rate cost I on saves? growth than full should and growth are see team think the the but a we on obviously think is mean So a surprise more I quarter a of and on. a story organization the run in now think the in the you is place? side one place? perspective I Do and save the the was that this next then founders energies moved expense growth complete, is we'll just the have from When that cost don't Cantaloupe. team story the -- of

Priyanka Singh

let So the expense and synergies address the team. Steve I'll address I'll

full and cost and completed see see XXXX. having will having results We into Bob, right we as towards benefit quarter's synergies been good we we full we of of will announced actions synergistic additional able amount so in beginning On to may we enter essentially exercise feel QX our XXXX, the had well that savings benefit There the you the expense of just And quartilization away. fiscal earnings the about February. the be had obviously the that the the will if were we synergies, QX game. in savings to quickly in and and able really realize see of some

Bob Napoli

it. Thank you, appreciate

Steve Herbert

to go, sorry in regarding the move joined man team. I thing his have note team Anant his see the there that we he the team, entrepreneur is But my to on Mandeep just just family well. Agarwal is fine. is And and relocated is a exceptionally this think for has of around doing -- next strong I've and one to been it's Bob his but serial he and the yes, with that are executives a he's wants to important very area founders other the a We team. probably And and while have we very world-class were which actually strong co-founder to mind

-- team with So that we'll to team. Mandeep have him forward we very forward very, a due for but all forward miss respect the strong we And shareholders. going look look leveraging

Operator

Thank you.

George of Our comes Craig-Hallum. next from question Sutton

please. question Your

George Sutton

Thank you.

and of story is think of a that if work variety able all wondered how the can to I are and the the us I'm that opportunities are for about parts things of I how key, reasons. of a talked broad but one a touch you're at you from unattended like and things give I opportunities you are with. And different mean getting looking this curious fascinating breadth perspective? of mini created the sense it tunes we've sales these attacking

Steve Herbert

-- We areas that in micro George. questions. growth the think is it for a in Amazon.gov. yes are -- thanks small we're those markets. as that significant seeing call And one of something of Yes, we the

but attended up things also retail. Of could technology. line service pick cost, we in are buying beverage, markets but dollars. thousands they know and course, go what some amazing of things able those these consumers to of got cost our It it fashion really hundreds and the of that food doesn't exactly with But and along could I you've that in of are in shifts an many on literally have want. it in we're don't it's the and retail; one be thousands something anything be micro seeing typically could we be

something to major than -- and going -- it's grow new nothing it's retailers continue consumers. those major, to cost a cost-effective goes is to what ways that more as And than expect through less ways get have find to something retail just that's to we shake-up. So to us, more

as activity there places of and in lot a seeing other well. we're So

George Sutton

the the that this quarter. if new traditional give sense you proportion vending? non to unattended look or I Could of a customers related at us the are Now XXX

Steve Herbert

to guess number I not best bio for our that give --they're vending. vending. not -- connections are related the they're QuickConnect which there Well mugs, is they're you just we could They're

they're And knows like somewhere to third micro reach a quarter it's that the probably going XX% markets. X,XXX believe numbers unattended oriented; here. So of Priyanka over kiosk increase prior we exact but consumers things new our in part trying which in in the near was business, company including an to estimate I added fashion connections I'm year. which was a

a in business addition that So overall in connections the in outside market, movement of that on we're business. of the outside closing part addition that's that of a market and XXX,XX significant in vending to in

and opportunity the -- I fan for long-term, of and very kiosk a talked fan, always traction. big I been a see market it's have it's So nice this us personally before a growth of significant type as we've to

George Sutton

particularly the I understand just if strategy partner. thinking I just going going as to than sure last sure make make forward I understand Obviously, revenues we large to comes optical thing. about Ingenico so how about want equipment could which lower an could expected Priyanka I equipment less as it's equipment want care you're a but the were forward? And in

Priyanka Singh

it us. enabler think the George, of We right like equipment skewed it's about you on half So an typically for second in the that year. just it's said

equipment to related similar Ingenico to be expect Ingenico, the but the as sales. get part fourth And way within able world. out quarter, QX do stay equipment to in and expect source we Ingenico hardware at with traction do excited expect will have we be So can it Ingenico, we start no of any to XXXX, we impact the in fiscal it a partnership look to really of able on as we that other fiscal we in internationally to sell into we hardware terms is manufacturer. And specifically be as guidance; we to our partner and stronger potentially do talking now service our that with gain cashless relatively about expect in great what in you XXXX internationally see about

that's So had to with have I we partnership the that think be far. not unique going Ingenico so

Operator

Thank you.

Gary comes Barrington Please Prestopino go Research. Our of next question from ahead.

Gary Prestopino

good activities surround looks get any can you Hi, with mentioned about morning. going there metrics that to Steve starting up. forward? pipeline then to talk Is you and pick way cross-selling like what maybe some the

Steve Herbert

one, for Well, the pipeline significant. way. Good is really that The Gary. by the I'll start easiest morning with very it

largest If sell at is with technologies' the --but cross you look USA base. opportunity existing

with on have service know anywhere a have in count penetrated. with Those today's aren't We almost million and total. X.X that X.X currently customers and between those locations XX,XXX we as customers connections fully million

So the pipeline that if call have. you the already customers can incredibly rich we it with that; pipeline is

I side an on optimistic, but most is of we're crux to trend So would expect of don't which forward, want that's the on of business, our course the side that I impact overly we be particularly would continues, seeing to but part. more not know now I the if and important expect this on have L&T -- more hardware going business the the our that's

answers question. I So hope your that

Gary Prestopino

Somewhat.

Let all phrase another way, it right. me

all Realistically, how right. those one cloud-based Cantaloupe of now, right to want uptake all opinion? software in connections potential your to are Three big Or is Half If it million quarters? you've enough connections many of the them? of got them?

Steve Herbert

smaller platform. less say enterprise when a service, small million the is we're may additional are going that --they're But pick to a four Anyone one --they're connections. that's additional say with we be that chain. it's not services They really than small food able of are percentage three, de customers two, XX selling up to would minimus moving I leverage to there simply able about think in be machines the but those farther terms up in Yes. operators. company Gary there's that's

Gary Prestopino

amount you're Priyanka same XXXX, to $X full the on cost correct. alright. I'm to of page million of sure Okay, in the then And That savings. make going here. Starting just the is realize

Priyanka Singh

That is it we some just this correct, of Gary. That is quarter correct. closed. We in that saw

will we and quarter in most XXX. the We in see annualization see it the of in current QX benefit the then fiscal will the of

Gary Prestopino

modeled SG&A of terms is that talking the of to, but are XXXX it event think terms or really a years to that of you haven't XX% In get revenues the in road? we out to I XX% can a that and couple of down expenses

Priyanka Singh

It depends good That's sales. really equipment a our really question, on Gary.

has If metric this see in down, as we of a depends revenue like look not if that you able cashless over resulted range, is term like a but go because a in basis; related percentage we've we you quarter at to as XX% think it SG&A in will It annually three should a seen period a moved. in year L&T about had five the be looks can sales quarter-over-quarter long better lesser think XX% be period SG&A about of a but that to that quarter-over-quarter that be to you range. percentage of variability because Hardware a the really some to there optics

Gary Prestopino

last be the And And then the L&T to sustainable is that margins. with margin. on forward? question my hit question L&T be just going just we last gross mark deals plus XX% of can this Have here the a assumed

Priyanka Singh

the we with The a on Yes. very the of team sales working the quarters. believe benefit to all cross done has and do expect in fantastic We see been so hard sell the sides that equation. job Gary we've of future

On side, that working at the our card very closely cost also looking wireless processing we're cost. providers, we've been our

of in sides range this continue pleased of looking just we ensure back. when months acquisition ourselves able going were within forward. this are the to very for that hit to And are we we that to this six months set all milestone on have the target be equation we we six So

Operator

you. Thank

next Capital. of Our Mike comes Latimore question from Northland

please. question Your

Mike Latimore

you the connections this business versus have do connections know you by results. or optimization? Hi, either thank. gross if net break way I but cashless Excellent can don't out

Steve Herbert

we'd the Mike that's call. at more probably one-on-one follow granular but you something can little a on. have bit on up you with right get to we with Not a fingertips now

Mike Latimore

you Cantaloupe that cash more that to consistent periodic? thanks. I talked existing Okay, kilometer a a bit then ongoing you think is little And or is opportunity kind a percent selling base, about of

Steve Herbert

majority large with thousand a not Well, significant, hundred which Cantaloupe the a few have of did it's over cashless. it's opportunity the significant connections, came

a a that's is a new other there --not opportunity million of but cross-sell there in to by much for So to services connections handful but and opportunity larger, larger them. an us, minimize opportunity the wide ability the margin sell is good cross-sell the there, a opportunity a multiple that, there's

So that cross-sell but nice to it's both ways. opportunity have

Mike Latimore

sure. way And into the Yes Cantaloupe that's past about for you the about right in tech then that? the to USA still think XX% XX% base I selling think to ARPU talked

Priyanka Singh

to think the is way That it, about right Mike.

Steve big Cantaloupe are chunk --so convert a we As indicated, cashless. connections not like of

the through impact grow. run we more have a as transaction revenue, processing don't processing do to higher from transaction continue obviously standpoint. we to ARPU get which in expect So that the they margin But the success

Mike Latimore

all kiosk And know as spending mentioned Steve with market? working I give you more last color some that a Is --is Ingenico. relationship Is can international more a guess on you're a I then them the above? but on that just is that? this the a building items. it high-priority little

Steve Herbert

vending pretty tightly. Yes. We've around arms got our

So of the and just question. what first -- first you'll all see answer

Our will start then initial out the Ingenico America in market internationally. to will in focus be countries. and They're venture North approximately with XXX

out the many So figure the sit and outside we very of and have together down choose vending on but kiosk to from a we that are opportunity. to are likely perhaps focused have near-term priorities be opportunities to we

do to maybe retailer major they're bricks-and-mortar of their right outside One get of every you North America. looking that with the retailers --as business They can imagine now. virtually in in they

pursuing that support opportunities great be be like a have and them. we'd terrific would coverage markets. with in it and brand those So that wonderful They

to both fronts. our there to strengths we're play So looking

Operator

the Herbert, for Thank Steve turn ahead. go concludes to CEO like closing you. our remarks. I back session. call Please Mr. this At to Q&A This time,

Steve Herbert

joining our much to for very Thanks today. call everyone

execution, day. of again everyone Before to we and thanks management look our enthusiasm. hard and next you at forward to particularly We're updating to investment close, your some appreciate them soon. thank the honor I'd thanks see team the attending. time. quarter. behalf integration their on sincerely partners, like looking support will each It's I our And we to combined want in on on the extend your especially conferences be my And many work of for talking work customers, two of to continued support upcoming all for you to an to for with We each progress their of forward and of hope to superior our the company employees companies. of the shareholders our

Operator

gentlemen, Thank for and you, program. ladies attending This today's concludes the conference.

may all You disconnect. Good day.

Cantaloupe (CTLP) 8 May 182018 Q3 Earnings call transcript