USAT - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the USA Technologies Fourth Quarter and Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand your conference over to your first speaker for today, Alicia Nieva-Woodgate, Vice President of Corporate Communications and Investor Relations for USA Technologies. Please go ahead.

Alicia Nieva-Woodgate

Thank you and good afternoon everyone. Technologies’ fiscal USA call. earnings the to fourth XXXX quarter conference Welcome Anant Officer. me afternoon Jackson, Officer; and this the Chief Chief Sean Officer; With call Executive are on Feeney, Chief Financial Agrawal, Revenue Wayne

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

Sean Feeney

the will joining It’s excited fourth quarter Thank very to you, update my year fourth the progress. Liz for the fully our of and new and time our I already start team work fourth detail has a I quarter perspective believe done then will in and everyone you on review month results, you company. with hard and us by am our today. for then a our giving I you behind I numbers The will initiatives am thank strategic Wayne some that short in reviewing to results. to lot follow

discuss this will for I financial Lastly, year. our fiscal guidance

in had as XX% with of COVID-XX million $XX.X Adjusted Revenue quarter, impact more and the due the XX.X% on in $X.X we $X.X in minutes. million prior the earnings Wayne to negative the EBITDA in touched revenue period last which XX.X% Gross period. decreased prior during saw you As few the million release of margin year-over-year. earnings year mix negative quarter. a to of a company in the call, year compared pandemic fourth detail the our was during in on material compared discuss will

the some company continues focus are pleased in ability during last On consultants positions top key perspective, by the we pandemic the I to does moves control a the line mentioned call, quarter. as our impacted While reducing of such these results were management our our cost-cutting work on through we costs with that number the trend eliminating clearly new utilizes. as the as and certain company initiatives consolidating from

a team reduction leadership for for implemented of senior the year. salary rest XX% also the the We

any noted fees that board we until XXXX. Lastly, the had year cash-based deferred director calendar

quarter Some points June. step we customer which important late key X,XXX which announced virtual Change, We It happened We during you success unattended unattended Price platform-as-a-service know was about or resounding retail. are additional should redefining the for website. was feature, our in Summit, first debut that event, registrations. a an who UR showcasing with new Remote we RPC launched the and retail the a and first include over company a industry awaited to long

of are be later advantage fully to out rolling able customers this We currently this initiative testing year. take to with

formed have capital team improving improvements. on We also to we focus ample a our to see working where make opportunity

a for for calendar in including properly. demanding efforts a have other importantly, to We by we prepare times organization, work. sure to the initiatives, team Most place like higher next Seed been as few and launched expect the customers marketing care have of taken our seen to also staff more value should our program customers sales support, months. This year better has customers are series a well to as a received these well as have This our to added better in proposition make continue a of retention, over our for to of customers we better we ability customer-centric we customer move towards our XXXX. and lead showcase

demoralized past for regular events have started building. As debt worth we to with will we financing a improving In Since the continue been months. August, the here, new a when arrival, I my focus company’s recent debt meetings and communications cadence I team closed a we highlighting, Chase, more replaces all-hands XX found facility. and on which understandably had got that of JPMorgan team over previous

which facility, to cost significant success forward. rate savings reduce financing new X.XX%, to The a the excited represents from company. welcome interest are a our the of going focused long-term X.XX% partner the We on LIBOR plus of terms

migration year. of Our schedule and by proceeding on processor Pfizer to completed the as the is be calendar is planned to end

put expenses. expansion. the our corporate assembled team proxy We on the These many behind to and are and costs reallocating million have our we and solicitation investigations, growth and systems are have we us, from international spent products, look years past us, accelerate service. X overhead restatement events to customer that in $XX internal Now and product now now we over wasteful by development behind investing capital so platform, hurdles

make organic I turn the the work to again. and call for the out invest better So, review resources and company’s Anant? financial sustainable laid drive initiatives Board organic wanted The Chief culture help job that proud are to this and in having the the to human the Officer do to achieve line. their them communication order strategic to throughout this about organization fiscal right-size cost and over addition Anant, year organization, to to providing in be better, to we team will top talk structure in for growth, the excellence. to grow management growth, Revenue people our opportunities To our them

Anant Agrawal

Sean. Thanks,

we today. fiscal to start we potential, refocus exit helpful find As understanding stand XXXX growth we with where on it our year and I

robust have under-penetrated are industry. we property. largest and roadmap, player by We technology indeed in the most and intellectual with leadership backed large position clear and Also, respected innovative valuable in a solutions

challenges strong the and which only we near-term world. despite In helping our industry our tailwinds accelerate in COVID-XX, is will of we a have believe further business, post-COVID addition,

more July the The example, payments. unattended For cashless off is XXXX, made in of And preference were very U.S. retail these the spread of industry amount operators a yesterday in that This January cashless XX% included study in this cash. hundreds we cash of across two, just huge one released of XX% that shift cashless of are over That’s up versus stats trends in because based from to on over when they actually study a time. with with consumers sales year. average, pay were important that their short the found consumer spend of

XX% our In data says fact, approximately that more.

to as in will a cashless encourage have operators than locations we machines will these on devices past. safely processing As cashless back such trends seen we of open our more world, their existing higher post-COVID in and up the of accept have believe volumes

space, in upside believe we of key exciting capture to we are cashless, of leader underway Independent initiatives. driven efforts these drive various trends. we are the the by secular best well further our adoption positioned to with these a As supporting through growth tailwinds

be entire business. First, we well deployed base the explain why. below want time Seed for initiative Seed our cashless existing think Penetration to be we all our and achieve customers, we this their customer with to believe and drive the across of product future existing now let and customer that we and me on within is is that our perfect to optimal levels base. fully We believe can

software which this enables to competitors we to full the like. are sales look speak. manage For convert volatility of than tailwinds exactly vast and of that Basically, customers the majority the across the strategy secular Seed months, profitability their them them best-in-class are product, matter so experience what when few the know the touched to onto real-time. on flying to no our Seed, go, to who coupled benefiting The pandemic cost well-positioned This with requires where to on their platform. out earlier, of our success go they blind, in past more operating By ride what to help I reinforcing and to maximize take, are customers better that machines allows platform. cashless even the from the benefits customer full our

allowing our it’s in still expand team markets. well is to make second enter priority satisfaction new to of is or And we year as or some Customer topic ones. strides offerings new the area, to as new in and a the continue work verticals to initiative leadership introduced to top customers customers, expand critical of of senior on We do. selectively lot unattended this within this but current the us have our

that problem You engage have ability first the limited before certain only was employed customer cashless with sales segments. new the and to company approach verticals, cracking which a this heard our historically for

enterprise of we takes example, points solutions cashless software priority any not being the IoT of solutions IoT, sale solely may geographies, to to potential rather year. of to white if a effectively solution software-as-a-service. with best-in-class that verticals cashless is opportunities speaking were customer entry in growth widget our to and full enabled setout in with way have for allow on This this for a us believe initiative The optimal and than whom model leads a is with capitalize For to leading our third We platform newer me of that space even us our from our new and each And a not traditional geographies. will been. cashless as and to this sell approach cashless. current engage platform sales top is

We us have of with in a opportunity expansion. great international front

its seen may have their expansion. the local morning’s partnering Latin currently international offerings incumbent to In high and could regions. have to to cost Also, we and we our and focused our underlying Asia, believe Caribbean reminder, in with company leverage our Seed strategy hired and you Lacroix a As SaaS opportunities assessing to two announcement, avoid getting is providers payment the in where Fernando we customers. payment Internationally, Lopez lead this be we recently certification. platform, value-add delay on providers are partnership America are as

revenue Latin and him Bergeron excited years, VeriFone, General was the reported President we million from Xx great for and Vice in very Caribbean, our our from XX the scratch. starting America to and tenure are using where here grew Chairman, to IoT to roughly VeriFone, Doug We over Mexico, solutions. Seed team. welcome $XXX Manager already to he while of he thing Fernando directly $XX that formerly have customers million two we In aren’t his and

this now back early I building market now these turn off full by Sean. will We to over it opportunity assessing are learnings.

Sean Feeney

Thanks, Anant.

the on of to Now for other two cost our with starting year, structure. to rationalization our the move strategic initiatives

focus and to which factor must the adapt, cost within is rationalizing exogenous fiscal major something control an year. this is a is COVID base completely we our While

call, profitable As just on my of is mentioned the for last not growth. focus growth our sake on I growth,

nothing to of me While invest clear our achieve significantly of cut that our customers. in opportunities short top third-party have continue our that consultants final corporate on to with there servicing we costs do the better people culture my mine is growth, to or over-reliance elevated initiative big line and become will focus excellence. in driving to and overhead our to our is Correcting in and during a order tenure has it plenty investing

changes of leaders focus together stakeholders. goal these back bring My new to our last goal to is lot on a as a the We the team days. have made in customer, a team come XXX leadership people our over of the our and and laser

thank well-being of always me, very a employees and continued for and while our it that, resourcefulness Lastly and several me months. important dedication their has past a transition let to been successful safety customers. our and the through the for you over financial you very home, such our work walk priority support over sincere from top continuing employees is The to see to With Wayne inspiring hand results. as a they it to QX to

Wayne Jackson

million, from revenue by result over CFO look ‘XX. begin the company over coming the ‘XX afternoon, year quarter. quarter results. Thanks, XX.X% million transaction FY with ‘XX for forward I the XX.X% lower quarter. totaled margin to improved be negative QX margin to XX.X% prior QX for Sean. period QX overall the the impact getting margin transaction for $XX.X as primarily FY of in of quarter many fourth a our year for quarter negative Total quarter sales margin fourth of I and decrease total everyone. decrease transaction margin know FY stakeholders with from in volumes while a of decreased The as months. $X.X ‘XX, totaled improvement by this the was QX and profit from was primary its for to prior with am discussing will prior $XX.X XX.X% quarter, to XX% revenue of equipment the the was ‘XX FY million a a as XX.X%, mix QX gross XX.X% Good of to I the and Revenue in a company’s excited License the during prior FY in Equipment of transformational the primarily due of result compared the License a compared $XX.X and of sales in million on XX% for the COVID year. shipments. driver the year.

As the the the positively revenue with license equipment revenues volume to margins margin. due and higher stream associated overall our decreased impacted COVID, transaction

discussions our the the call results, related are While to on highlight year. is this quarter related to fourth to item full primarily one there

a highlight order into partially $X.X result of succinctly million. these over The of reclassified $X.X $XXX,XXX have XX.X% investigation, solicitation As reclassified reduced ‘XX year. in in certain more from incurred QX $XX.X we from fully approximately million, expenses. of and reduction professional million to facility services related release, million FY $XX.X disclosed activities as and Operating related prior of more as $XX.X earnings $XX expenses highlight changes years a marketing items QX cost primarily offset in increases these as restatement increase the decreased fourth well in in we was were payroll the proxy ‘XX. related allow an past expenses X over XX.X% well to by expenses in We SG&A FY the million expenses quarter as SG&A amounts million, in us the the decrease totaled which to SG&A. prospectively in the

OpEx large to in restatement other movement investigation, The the proxy solicitation QX costs. in related increase and

As more noted than the expense quarter. costs these behind million QX of in we prior while year did have us, earlier, FY ‘XX are $X.X

FY million million to was which share was in fourth Adjusted is for million prior negative compared period. period. in ‘XX the $X.X prior share million QX basic compares for $X.XX quarter to the loss loss quarter to $XXX,XXX operating year net a loss basic period. the or Net of a negative loss for a fourth per $X.X Our $X.XX EBITDA $X.X $XX.X prior $XX.X million, compared year in of or the per year the

XX, Regarding liquidity, equivalents XXXX. million had June $XX.X cash cash the and of company as of

In with the credit a credit loan outstanding XX, allows revolving the aggregate Chase August a the to under addition, and new entered agreement $X back not which new Sean in as increase agreement I $XX Sean. secured uncommitted tranches for with and/or exceed of a the call loans million $X secured and into on term amounts credit indicated, facility, new agreement The million total provides the amount company all repaid revolving Antara. that an to million. Company feature expansion includes will turn over now term facility, add commitment the an JPMorgan to

Sean Feeney

Thank you, Wayne.

introduce As our uncertainty for the you earnings are by of in financial did due guidance COVID, not seen may year release, we many giving XXXX. to have while fiscal our peers guidance presented

to For revenue. top of in we line, million a range are million $XXX expecting $XXX

you of uncertainty. many of still a raises know, lot As COVID

which further expects continued and our will turnaround could also calendar half XXXX. fiscal amenable and the be no in school duress COVID-related assumes This both assumes pandemic substantial impacted by terms than the this and of of It that later unforeseen year range half COVID-XX create that the year also impacts, of first first hotel into our the this range business. year be So year economic environment will half office, second in the traffic. a more fiscal the

most and of that our the to that fiscal the benefits the we our sales heavy be expect and of see anticipate will refocused lifting half effort calendar completed turnaround year. during will second of of the in year We investment this begin

control, EBITDA. there COVID of it line impact are levers relates is within to largely control our to the While top many our beyond adjusted direct as our other

million. For are $X a year, the expecting we of range and $X fiscal million

disciplined of improvements to which in are In quarter, believe management Just achieved team. of we will – top second new accelerate fourth believe of which the half this expect the we areas, we execution EBITDA reflective we year. line, the the growth important like in fiscal the

and a exercise. business of the are While turnaround is the short-term encouraged full our transformation short-term by we results, not

business for place, reorganized management a sales about now With jumping-off redesigned in structure, point XXXX. team stronger I structure, senior FY the excited am force capital a and our new

out woods, headwinds size, work are the of that of the first believe strongly of putting While we consistent presented start terms with I the business we the year. to will by fruit in not is second investment during not in COVID our the are yet half bear of and the our G&A the half and in

this as everyone efforts. can getting NASDAQ on goal Lastly, making in interested our sure as in everything know to expeditiously re-listing is involved do we an we I personally achieve am update I possible. do

We will more. provide updates we as know

to wrap up. Just

bumps external factors, Operator? may due to an the this have we we that, and a to business While operator questions. hand for experience this which stronger. foundation will will legacy grow year over With we few to it back incredible from emerge and

Operator

Instructions] [Operator you. Thank Certainly.

Our the Mike Capital comes first line of from Northland question from Latimore Markets.

Your question, please.

Mike Latimore

thanks. Well, Great.

on gross transaction think does margin, volumes very you So – margin, strong normalize and as I coming gross on guess back new the transaction and processor, about the the where around? that license

Sean Feeney

the mix of the was bit as back that of that strength our in also that as you part will know transactions QX profitable a license license as license grow as in the We down more think come Mike, line. transactions expect our would and I showed business. little line product our strong are – not were in the as those

that in what down I will expect we would a bit QX. So from that come saw

Mike Latimore

here? bit know Do kind of quarter improving last then you think getting have volumes more talked data I a transaction then to you a from certain about there. levels percent sort recently of and of And that pre-COVID of you kind little

Sean Feeney

Yes.

the What that kind a to XX% somewhere with a – transactions transactions I COVID XX% bit. is are on to compared seen down of increase weekly of kind in quarter-over-quarter, are summer, seeing through the think have we We basis. flattened

do bit field. not the are Now that we more are little apples-to-apples that that there have devices a and in is –

back think offices, back it are some we to that in we begin So and does come will see acceleration. when people

in If on of the off were you we range at volume. the kind for look in XX% transaction XX% year, of February somewhere this high at where we kind to watermark are

in where earlier we year. were the So significantly off

Mike Latimore

sort D&A. about Got $X.X it talked it, quarter? And million of September of I million kind Is in a good that OpEx, got okay, you baseline on for and then SG&A it, great. just was the of $XX.X think

Sean Feeney

let that will I Wayne one. answer

Wayne Jackson

for Hello, the Thanks Mike. questions.

first to – So of it’s that a of and early EBITDA impact and direct EBITDA is more of and revenue will half the talked quarter, investment second and then the of see them now. bakes which SG&A relative scaling. we the going continued innings all as that be cost first to and Sean the answer how all year, the Maybe is, in about, our our half gave guidance in see sort the Sean the quarters we

Mike Latimore

it. Got

luck. Okay, lot good a great, thanks and

Sean Feeney

Thank you.

Wayne Jackson

Thank you.

Operator

you. Thank

comes William from from line the Bob question next Blair. Our Napoli of

Your question please.

Bob Napoli

that rate Thank XXX% get Cantaloupe, that that first penetration the cross-sell question I could base. confidence you today and what be the to the good you and the penetration – said would up that, afternoon. you the and a was I I think on is you just Anant percentage of guess, the the wondering cross-sell had you would customer that what you close dramatically. to gives could increase felt

Sean Feeney

part say is, the plans. Sean. it have believe reorganized XXX% important USAT focus an of at organization more to are now customers. this would have of of We platform we I that around Seed we So, compensation sales then their and and penetrated as XX% the What we kind would on our is love

the early and growing see So in pipelines we being we direction year. the half that that in be we and the to second it’s with what think half will have first to of starting got growth delivered is change

Bob Napoli

the for or relisted? business but the of there to on get to of JP me the let you want capitalization need also capital maybe be that business you Morgan. getting more and the Then you do to not is do Okay. Are on to the business, from Sean, health the levels where, do? ask work and one the capital only of And financing where

Sean Feeney

on think that impact Bob. an don’t relisting, I has

but actions the at are feel can that business with this fund decisions no take, that kind think are we I should of looking the currently And we other that we point. there at we we capital – have.

Bob Napoli

for sneak share question. business, one, what Maybe your your the white of views one your broad a and the in just white last space are the current of TAM Kind to on space the Okay. in market?

Sean Feeney

Yes, as we into base. of I the talked for room Seed ample there about, think the think is USAT we that customer have penetration platform

believe and as I – with our still a think platform cashless that that for our whole. we do there also with room is expansion

think have I seen slowdown. COVID, some a very we to adjacent those of of really a or a the or of industries by has to which significant impacted negatively kind halt stop brought kind be vending

expansions think by growth whole. focused fiscal year, there we this the beginning on So we is the that of of our a part and year fiscal ample we talked platform time solution we to the definitely counting cashless business to get will may as to not in really not as expand on fruit to work want will continuing well about, international in are our Anant And XXXX. – are be some bear probably while on as sale

Bob Napoli

Appreciate you. it. Thank

Operator

you. Thank

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

please. question Your

George Sutton

first Wayne. and to you, Thank welcome

about you So on wondered looking margins? have could alter how versus particularly your are transaction favorable particular, in but license sales? a financing you flow about more thinking equipment going Are break perspective that the thinking from I partners are forward, effect if business bring you how way to down, might equipment in, revenues a you and obviously

Sean Feeney

us Ingenico from their at looking chain. on was focused we quarter involved hired and gentleman came – have to of we fourth chain part supply a in our We business. that the supply the George,

business we and best looking that all manage view. can at part of that So of a kind cost aspects from of ways we that point of the are

financing I for have as think to options that we and look as we and partners will many leasing expand for can for hardware I of and we have think people customers. that that

at are looking And but decision kind lot a all of about, that that of that, talk wise yes. we can so not I

George Sutton

realignment? Could a now detail you structured bit than you were sales you us force the of differently before? How are on give

Sean Feeney

in various ask kind focus with of Anant and the through the talk has organization of to customer them segments. on to Anant? Sure, what sales kind his done he I will

Anant Agrawal

Sure.

previous So the what functions and is was different And off. found customer that service in the were organization, marketing sales, reporting in different siloed it layers to business. fairly we

our the So overall and customer efficient. up terms hands with of hands up it off, our of of when opportunity working have transition come kind come in just of company questions kind solution, wasn’t or on experience lots issues of sales very

so organization brought under what done is, have my we umbrella. function all one under we And those have –

So for to that service operations, comes all and implementation customer to sales to one now teams under marketing umbrella.

of sales is putting all small, that right we are So in are operators. operator and medium, of itself, of kind working terms leaders more now and sales them call the base of enterprise force different with we and those consumer actual what a when up to realigning skill larger are little of hiring more evolving of misaligned and to we set people our SaaS we tiers kind how the level each of are what the bit attack the communicating business. were experience the before in market terms opportunity a large size kind against of they aligned, that’s functions lot coming driving our the Specific enterprise

George Sutton

you. Got

And this a make over and again, Finally, than bet Latin are betting start Fernando That’s American we since years. going take comers. VeriFone in Xx market that I that has to season me. to started going am the a is any it any NFL he X does your will and for better bets, next did – at I

Sean Feeney

would love be the George. of side on you, that to with bet I

ground hit and running a for – half. expectations little the at high week in and got he have will We a about a Fernando

on things of working for Doug the at bring market. we and So strongly VeriFone we are excited part some Doug that know Bergeron him to in did have you you him and endorse that and having begin great

George Sutton

great, thanks. That’s

Operator

Our from line Research. you. comes Thank question [Operator of Prestopino from next Gary the Barrington Instructions]

Your question please.

Gary Prestopino

another just on did were to about Mexico talking one? all. markets. you Alright. and some say markets you verticals new us first terms everyone. Did was in Good Anant, that of quite the get of things one you ask I new afternoon, wanted then didn’t give of the and I

Anant Agrawal

Yes.

in are focused expansion markets America. around we and for So our on Asia international Latin

Gary Prestopino

Okay.

all your different and America, go those okay. platform platform the international in Asia you you And regions, can work right? can have, Latin that of with

Anant Agrawal

our I Correct. in mentioned Cashless as new our those the spear we And to kind markets. services into said, the something really focus of talk, is our of to think is certify IoT are going tip earlier cash like a get and leverage software lot lot to know it and we markets. these as in is probably into I very lean of countries. And takes on people because of installations time partners a focus

of as kind we our two regions. that’s strategy so look these And at

Gary Prestopino

Okay.

me led the second to that question. So

You talked prior with under always regime. lead they cashless about, to used the

be you moving Cantaloupe Now And to it – to – comes if going secondary? towards trying with solution more acquisition. Seed you that’s the that or that got cashless enterprise comes, from the sell are

Anant Agrawal

Yes, the this sorry, oh – we view Sean. way

Sean Feeney

go Anant. No, ahead,

Anant Agrawal

the services cashless the logistics, So the platform, we right, ultimately, about data, when we view all way we it’s payment. provides IoT, a provide, platform talk that platform,

All of the these full we are services providing. around are essentially that platform

benefit are us, and Our best with customers the of all get full platform. the all leverage from those technologies that in

may when cashless However, may some a you you talk have operators, go as when as markets, you priority, to have some into customers, a logistics priority. optimization new talk to

historically and we to with connectivity want know just those really how didn’t wasn’t customers. first, cashless engage if may Some it

to but customer our platform easier onto integrated in and services time. of and now ePort engage over we any a with those it get Cantaloupe organization towards all piece, for services on first we our making platform With of eye our with breadth the a platform, are organization as with service the those customers the bringing all sales to it have now

Gary Prestopino

market to Okay. has And about only the in ask now you that then Are the wanted that? one pricing. remote the just I

Sean Feeney

Anant, that? you comment on to do want

Anant Agrawal

Yes, sure.

prices in want prices promise XX years, get their software XX high change the remote operative them, been about really industry remerchandising is part And part. are it take. of are probably at level, machines, are for into different. products not, pricing if you a you processes, platform So also hard the The the a you talked an this they has these hard an they to need workflow to is a doing selling years. where build the tell a not do how Well, then to if and functionally enterprise it’s have machine

so And operator some that have underlying a technology I today, only RPC of scale. delivered That use are into actual it account, not believe workflow an different of does just bunch And cases use whole the processes. these actually parts change. the how but remote of take use on at piece, then there’s ones that the we

Gary Prestopino

you. thank Okay,

Operator

Thank you.

the William Our Blair. is from from Napoli of next a question Bob line follow-up

Your question please.

Bob Napoli

portions of customers had – and of segment base, been your go business the hit maybe hard of commentary health on you seen base? obviously, strength go Have been you the question I market – the around business mean out maybe a Just COVID. it – customers the of seen or out by really many some customer your has customer of have just

Sean Feeney

a Yes, mix of I some think either we customers go seen have really not some we seen definitely cases of out small business. impact. out of sell in kind have many, And or

coffee that major beach seasons seen XX%. good a predominantly city, is said school and when comes business and K-XX business college they business plus the over of struggling. XX% your college if was year-over-year back. off other that school is but with ends customer this was kind your Their down that is – their and the imagine can now was they in had you normally beach a office in I a if day an really So

need in people really said talked need We while in a in school, think ago, vending offices, I kids predominantly of we was they engaged, in So month NFL. to a people I fully empty get kids then a are about There lot back and they have back kind earlier George little hotels and as are bit traveling that it bit back to, is of college the – at a sporting were events. little events. than still more hotels. been I sporting back

up, while base COVID significantly. hit – to of kind continues market the stock really So our pretty customer is

Bob Napoli

guess. And that’s what I would expect, I

are where side, what do are upgrades, invest, and of need new upgrades working On investing to on? you you or kind releases the what technology where you

Sean Feeney

and lot on that a through the I to partners, a prior and to a have So thing team really process. lot not been on they follow that biggest of customers did discipline have of good Vogt and the working commitments management Jeff the is commitments made

of deliverables make we us. some And work rationalizing of behind over the of ones been the cases, good little we while well drive things revenue doing we for sense. so most let revenue in kind kind could in have And that XXX down a are into lot line very that stand

of year. we working on the thing so first And main through that’s are the that half the

change really power and and with ePort working available to with that with unlock remote customers all the are work our getting to begins various there. on price devices of that We the

– And integration larger work how question is would other also looking that a we very to us pieces translation revenue to the an Ultimately, for things and be could and of that other what do is our for are of integratable important, drive we be revenue. that looking a can another number can be get we more becomes around course, potentially some us. into international, work. platform and area at and of want software, there of think focus We and easily customers to quicker that at it more as you faster, line earlier of

Bob Napoli

to that, you. opportunity? What that or results on plan follow-up like what’s a America, that, or from that’s just is Latin and expense time then from now material get is something hiring year sounds the to the like game frame the be along a the marketing? team –what going may Thank exact go with what’s it And a like

Sean Feeney

great, question. Great, great

that great have years. of believe there Fernando number who think worked very for hired as is has that I we he knows a what that we well market

had we has is partnering. success success that partnerships a he believe for with internationally can with of We work lot that think looking and drive. I the

has opportunities term, would find see am in but but basically markets the before, before of. on earlier, see for him counting and ultimately and to to it I as XXXX looking take is we year, to this that Fernando so And that it that that done I love in is I probably we a the something near impact begin various can on us some assessing advantage he we grow. And opportunities great can said

we here today – As sit

Anant Agrawal

software. something is There

Sean Feeney

software we as and that need integration some may we some maybe be need the do that know do to localization well. works, We there there to

Bob Napoli

platforms, other you small at in? something Is that looking interested or or be anything are there that would to acquire businesses sense, makes other

Sean Feeney

that’s Yes, part I think all of our strategy.

the markets, have I think But difficult. capability of advantage very to to so a many another you markets. just in opportunities us we way. footing, get in those is they very I it, ourselves when M&A to think way them. do times moving the new trying – term, by am into new arrive is take partnering that’s will see solid don’t financial the company sort on I of just go near That’s

Bob Napoli

Thank it. you. Appreciate

Sean Feeney

Great.

Operator

you. Thank

a is Barrington your line of Research, next Our question question the Prestopino from follow-up Gary from please.

Gary Prestopino

Yes. didn’t were But get I QX? the the what’s of statistics Is give dollar gross connections some volume? it just for transaction transactions possible see – them to the release. can number you in like in volume,

Sean Feeney

I know have that. you if don’t Wayne,

Wayne Jackson

don’t. I

Gary Prestopino

strive to pinch what not have around that that there client to correctly talked may base your you their of as were that were done you to and what Okay. the Sean, points going were client I and be or the improve Yes. really then of – you with gone liking things the wanted ask not done to base can cited were, Alright some forward. just

Sean Feeney

customers customer be you is what I not to are think there need better in and service I we our as is a couple. servicing area, was heard One well. from

with the some have years. near of we some them can term, are best do that there at how serviced adding happy the and that, in but are that way over looking people not last so we have we people the we And got couple

that in cases, of conversations a that we drive reasons are just cases revenue. well and accelerate are there have made think revenue. way let having there’s that we they are not I organization, some and sit the I through we were working are way that earlier, talked our as do correcting think working people things I necessarily our trying we In deliverables this, But not are not through enough our of and Secondly, could going commitments coordinated out – because the sales tough we lot that to ultimately through other it. organization through various with to that

Gary Prestopino

Okay, alright, thank you.

Wayne Jackson

The Gary, is me, quarter, excuse to our total Wayne. connections connections $XX,XXX million. the $X.X for are brings this

Gary Prestopino

in gross ready asking That the you a the No, give, in but have I Q, data and were obviously that. volume. for going it to be what connections not is what the was put the K while. the we transactions usually that the is you

handy, So if don’t you have that’s that fine.

Wayne Jackson

Yes. don’t. I Yes,

Gary Prestopino

you. thank Okay,

Operator

you. Thank

from question please. Northland next question Latimore line Our Capital, Mike follow-up the your a from is of

Mike Latimore

I Seed further Yes, Great. just had about question penetration. a

kind that place. at XX% How you base a kind penetration of replacing another and if of legacy a much you greenfield are versus amount of have So in to system that go. may XX% be incremental is

Sean Feeney

to on you comment Anant, want that?

Anant Agrawal

Yes, sure.

of for So big for legacy old so usually been fairly sort are I thousands competitive are they Seed target of software usually platforms on operators some larger they percentages the and there, of you but They a out our solution and sales machines, on already, in this be organization. don’t to the most have tend directionally, call, rough not marketplace. that’s on are the they

have they small nothing. the operator side, On basically

that like with space feel really side. white to go we Seed on some large so the a And after to investments that’s going we’re

Mike Latimore

where are current Great. contactless percent some card And I contactless what or visibility the guess, – then of credit regarding you study you on you your transactions. of Pay? have had did data Apple about do sort into transactions

Sean Feeney

Yes.

two year quarters. the high we the lot the about As from contactless seen we in said, X% within our the of beginning growth grown to through have of it’s calendar first really teens a in transactions,

market, focus of contactless base that’s significant a while there and Now, a lot growth. small is off growing in the around pretty

Mike Latimore

definitely. Alright, thanks. Yes,

Operator

management Thank to program you. to question-and-answer now turn further This the for back does conclude I’d the like session. remarks. any

Sean Feeney

interest And and Technologies. listening you, talk soon. Well, we thanks your will operator. Thank in USA for you everyone to

Operator

now in thank program gentleman participation This ladies day. disconnect. you the and your conclude you, you for Thank today’s does Good and may conference.

Cantaloupe (CTLP) 10 Sep 202020 Q4 Earnings call transcript